Credit Management in Australia - May 2018 by AICM

Volume 25, No 4 May 2018

The Publication for Credit and Financial Professionals

IN AUSTRALIA

International Business Risk

- ARE YOU PREPARED? l Handy guide to priority of registered interests on page 16 l What is the law when assisting consumers with hardship

Volume 25, Number 4 – May 2018

Message From the President

45 NSW: Elisha, Aaron and Roberta Magee with the inaugural

Victorian Overview

Colin Magee Cup.

Changing of the guard in Victoria and Tasmania By Alexandra Cain

Credit Management

Insolvency Intel announces national partnership with AICM By Andrew Spring

Engaging in international business transactions – Do you have a cross-border mindset?

By Jade Tyrrell

A simple guide to determining priority between trade creditors with caveats registered on land

Qld: Stacey Woodward, Mark Harley, Decia Guttormsen.

By Daniel Turk and Anna Darroch-Dobbie

Cyber Security

Fancy a european holiday? A pocket travel guide to the GDPR By Terry Ledlin

Comprehensive credit reporting Comprehensive credit reporting – recent developments

SA: Courtney McDonald Essential Insolvency Update speaker.

By Elsa Markula

Credit Checking Let your business take advantage of an online credit application

By Kirk Cheesman

Hardship

Tips for handling “hardship” By Roger Mendelson

51 Vic/Tas: Another sold out Victorian Golf day.

What does the law require when assisting consumers in hardship?

By Rebecca Fahey

10 Andrew Spring

12 Jade Tyrrell

20 Terry Ledlin

22 Elsa Markula

56 WA/NT: Full house at the March economic breakfast.

ISSN 2207-6549

DIRECTORS

Rebecca Fahey

Leigh Adams

36 Ian Hadwen

38 Paul Burgess

PPSA The top 10 disasters of personal property financing

By Leigh Adams

The risks of getting PPSR wrong aren’t worth it

By Ian Hadwen

Debt Collection The collections ethos

By Paul Burgess

Australian President – James Neate LICM CCE Australian VP, Finance – Gregg Odlum MICM CCE Professional Development – Rowan McClarty MICM CCE YCPA & CCE – Trevor Goodwin LICM CCE Legal Affairs – Greg Young MICM CCE Member Services – Jeff Hurst LICM CCE CHIEF EXECUTIVE OFFICER Nick 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 PUBLISHER Nick Pilavidis | Email: nick@aicm.com.au CONTRIBUTING EDITORS

Training How to identify skill gaps in your employees to ensure your training budget spend has a positive impact

List of successful students and course dates

NSW – Balveen Saini MICM Qld – Stacey Woodward MICM SA – Gail Crowder MICM WA – Lisa Marr MICM Vic/Tas – Donna Smith MICM CCE EDITOR/ADVERTISING

Around the States

New Members

45 49 50 51 56 58

Credit Marketplace

New South Wales Queensland South Australia Victoria/Tasmania Western Australia/Northern Territory

For advertising opportunities in Credit Management In Australia

Andrew Le Marchant LICM CCE Phone Direct 02 8317 5052 or Mob 0418 250 504 Email: andrew@aicm.com.au EDITING and 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, 2017.

JOIN US ON LINKEDIN

Contact: Andrew Le Marchant Ph: 1300 560 996 E: andrew@aicm.com.au

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

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From the President

James Neate LICM CCE National President

e recently wrote to all members seeking feedback about our proposal to amend the Constitution, to update it and allow greater flexibility in the appointment of National Directors. You will recall that one of the aims was to address a gender imbalance on the current Board. There has been a good level of feedback, all of which has been supportive of our proposals, that is to date at least! We continue to seek your comments as to how your organisation should be structured and run. Please provide any further email comments or suggestions. As the financial year races towards an end, and with a new Federal budget, it is also time for membership renewals to be issued by the end of May, due to be paid by 1 July 2018. Now is an ideal time for you to review if any members in your group scheme have moved or changed roles such that there are other people who would more directly benefit from membership. If there are a number of you in a business, even if spread across the nation, then there may be benefits in taking out group membership. Please contact Andrew Le Marchant at andrew@aicm. com.au or on 61 2 8317 5052 for any details about the benefits of group membership. The programme for the National Conference to be held in Melbourne 17th -19th October 2018 is coming together with strategic design so that it is the most relevant series of National speakers on offer. May we encourage people to book before the end of this financial year. We also have the new offer that people can cancel their booking without penalty if for some unknown reason the programme when issued, does not fulfil their expectations and/or wildest credit dreams! There is also an email coming to you soon which will help you explain why it is critical that your organisation be represented at the National Conference. It is necessary risk management for every serious credit professional to attend the Conference to keep updated and to learn the latest.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

The work the AICM does on behalf of members is supported by our National and Divisional partners. Recently we welcomed national insolvency firm Jirsch Sutherland as a National Partner. Jirsch Sutherland Partner Andrew Spring and AICM CEO Nick Pilavidis expand on how this partnership will benefit members on page 10 of this issue. As your voice the AICM continues to play an active role promoting and representing your interests. Recently we have engaged with ASIC as part of an insolvency liaison forum, Australian Financial Securities Authority (AFSA) as part of the Bankruptcy and PPSR stakeholder forums, the Australian Accounting Standards Board (AASB) on a consultation relating to changes to reporting requirements and the Australian Retail Consumer Authority (ARCA) on credit reporting. We continue to work with the ATO on the notification of default listings and Federal Treasury on the Bankruptcy 1 year amendments, which are expected to pass shortly. Look to the July issue of our Magazine which will cover all of those details. We have all seen comments in the current Banking Royal Commission about the need for ethical decision making and as a credit professional you can play your part and show your organisation how to do this through proper risk management strategies. There has been much media about the ATO and debt collection and the need to ensure that collection strategies take into account the consequences for individuals, not just the laws and legislation. Networking and understanding how your peers address these issues is the best way to develop and learn from others. It is an active time at work and in our professional lives so let the AICM guide you through the challenges of business life as a modern credit professional. Best wishes to all. – James Neate LICM CCE National President

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Victorian Overview

Changing of the guard in Victoria and Tasmania By Alexandra Cain*

“We are thrilled to be able to bring talented young people into the industry and encourage them to become a council member.” 6

There have been a number of changes to the Australian Institute of Credit Management’s (AICM’s) senior management team in Tasmania and Victoria. Special thanks to Jeff Hurst, director of Trade Bureaux Australia, who is stepping down as an AICM director on the expiry of his term. Spicers’ Lou Caldararo will now join the board, while Sherif Hussein will step into his shoes as president of the Tasmanian and Victorian division. Here, we profile their substantial impact on the institute, and their plans for the future.

Meet the president

Sherif Hussein

Fittingly, Interactive’s billing and credit manager, Sherif Hussein, became president of AICM’s Tasmanian and Victorian AICM councils on International Women’s Day on 8 March this year. The former AICM vice-president is excited about her elevation to the presidency, and is busy preparing for this year’s Young Credit Professional program and the upcoming showcase day on 27 July. “We encourage anyone under 30 to enter,” explains Sherif. Entrants have the opportunity to present to a panel, and the state winner will attend the AICM conference in October and compete for the coveted Young Credit Professional of the Year award.

“It’s really exciting to meet young professionals in the credit profession achieving in their role, who really understand the industry and are passionate about it. We are thrilled to be able to bring talented young people into the industry and encourage them to become a council member. So, I’m really looking forward to meeting this year’s cohort of young professionals,” she adds. Panellists have an hour to make their presentation, after which the judges explore their presentation and understanding of the credit sector. Aside from her focus on the Young Credit Professionals program, Sherif is looking forward to engaging more with other state presidents during

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Victorian Overview

the regular monthly conference call, sharing information and feeding back the insights to her fellow Victorian and Tasmanian counsellors. “At the moment we’re changing the constitution to encourage more female participation on the board, so that’s something else I’m excited about,” she says. Sherif is proud to represent Victoria and help increase knowledge about credit to members across the state, and share insights into how amended and emerging legislation have the potential to affect the sector and the people who operate it in. “My role is to share all this with our councillors, who are able to further disseminate this intelligence across the Victorian membership base,” she says. Sherif is also working on the extensive member events program this year, and she encourages all Tasmanian and Victorian members to become involved in the division. “We rely on our members to contribute to the council to make it a success. But it’s up to individual members how much they contribute. For instance, different councillor roles have different time commitments. Some portfolios require more time than others, for example we share the professional development work among a number of councillors so one person isn’t overwhelmed,” she says. Of course, with more seniority comes responsibility. As president, Sherif spends a lot of time after hours dedicated to the Victorian and Tasmanian division.

“I’m enjoying responding to members’ queries and emails, and getting to know our members even more,” she says. Sherif, who is a Certified Credit Executive (CCE), became a councillor after qualifying for the designation. “I saw it as an opportunity to represent the credit industry and mentor other industry members, I like being someone they can contact about becoming involved with the industry and helping to move it forward.” After initially sitting on the council, Sherif was appointed vicepresident in 2016. She says her experience demonstrates there are many opportunities to grow within the industry and being an active AICM member is a great way to fast track your career. Says Sherif: “It’s excellent for visibility in the industry, credibility and seniority. My manager proudly tells people I’m the president and about the work I do, and lets everyone know I’m across all the changes happening in the sector.”

Taking direction Spicers national credit manager Lou Caldararo has stepped out of the president role for Tasmania and Victoria and has become a member of AICM’s board of directors. Lou started his presidency in 2012. Lou says he is proud of the organic growth the council has enjoyed during his time as president. “We have a great united team and we’re encouraging a more diverse representation of people to be

“We hold a fantastic golf day every year, with many Victorian and Tasmanian members taking part. Networking is critically important in our field...”

Lou Caldararo involved in the institute. That’s a really strong focus,” he says. During Lou’s tenure there’s been a concerted effort to better engage members in regional areas, especially in Tasmania. “My focus has been to hold more events outside the CBD in country areas. It’s been a challenge, but we’re getting there. This is something that’s important to Sherif, too, so expect this to continue. We’re trying to reach as many of our members as we possibly can,” he explains. During Lou’s time in the president’s seat consumer credit has been a hot topic, and he has encouraged people who work in this realm to become part of the AICM. Social events have also been a hallmark of his reign. “We hold a fantastic golf day every year, with many Victorian and Tasmanian members taking part. Networking is critically important in our field. And these events help to cement relationships with members. Across our events we try to get a good balance between topical discussions and social events. We’re holding a cocktail event at a prestige car showroom, which is a bit different, and it’s these sorts of gatherings that members love,” he says.

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Victorian Overview

Like Sherif, Lou is really supportive of up-and-coming credit professionals. “Young credit professionals are the future of the industry. That’s why it’s so important to make sure we have a great group of young councillors involved.” In his new role as a director Lou will look after the membership portfolio. “My aim is to always offer new ideas and contribute to discussions, and also get out there and listen to as many members as I can so I can bring their ideas to the table for discussion. Not every idea will be pursued, but it’s about bringing new thoughts into the institute for healthy debate,” he says. While Lou acknowledges the credit sector is facing challenges such as increasing automation, he stresses there is still a bright future for credit professionals. “Automation will assist and guide credit people in their work, and help them to be able to perform simple queries and tasks. As credit professionals we have to adapt to change and explore new tools to increase efficiencies and improve company results.” As might be expected, Lou says he’ll continue to push boundaries in his new role as a director. “We are all focused on developing a great strategy to move forward together,” he says.

Remaining close to credit Trade Bureaux Australia’s director Jeff Hurst is finishing up his time as an AICM director, but he’s not moving out of credit altogether. A director since 2012, Jeff was part of the team that has laid the foundations for the AICM’s strong future. “We’re in great shape now. Membership growth has been very strong since our team became involved in the institute. We’ve worked hard to follow-up lapsed members and have used insights from this process to guide the future direction of the AICM. In the future, we’ve made sure we will always contact former members to get an understanding of their perspective,” he says. Like any member-based institution, working out the best way to engage all members is the best way to maintain numbers. “One of our strategies is to form closer links with like-minded industry bodies, or with membership bodies in areas affiliated with credit. We are also working alongside the Australian Chamber of Commerce and Industry to help improve AICM’s profile,” Jeff says. “We’re also more engaged with government bodies and we are helping to consult on new regulations and legislation,” he adds. Jeff has seen the credit sector

“One of our strategies is to form closer links with like-minded industry bodies, or with membership bodies in areas affiliated with credit. We are also working alongside the Chamber of Commerce to help improve AICM’s profile.” 8

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Jeff Hurst change and evolve during his working life. “There are far more women involved now, which is fantastic. We are certainly looking to attract more women to the board and ensuring it reflects the diversity of the membership base,” he says. While Jeff is stepping down from his directorship with AICM, he intends to remain connected to the industry. He will still maintain his role with Trade Bureaux Australia and is still a councillor for the Victorian and Tasmanian division. “We continue to educate the profession about why credit bureaux are so critically important. While there’s now much better credit information available, it’s still essential to speak to people and build relationships,” he says. AICM’s loss is the gain of the many active trade bureaux across Australia who, like AICM, value Jeff’s ongoing contribution to the credit profession.

*Alexandra Cain is a freelance finance journalist who has written for many leading Australian and international business publications.

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Credit Management

Insolvency Intel announces national partnership with AICM “Everyone you will ever meet, knows something you don’t.” – Bill Nye (the Science Guy) Sharing of knowledge is integral in the finance, credit and insolvency industries, so with this in mind Jirsch Sutherland’s Insolvency Intel has announced a new national partnership with the Australian Institute of Credit Management (AICM). The partnership aims to not only share knowledge, but also provide access to education, training and support between the two groups. Insolvency Intel for Credit Managers is a subscription only service managed by national insolvency firm Jirsch Sutherland that guides credit managers through the insolvency maze, offering them sound advice and support in every insolvency situation. The AICM is Australia’s only membership body for credit professionals, which provides solid education and training to keep them informed of ever changing industry requirements. “We created Insolvency Intel as a way for credit managers to access the strategy and support they need to navigate through insolvency scenarios,” says Jirsch Sutherland Partner Andrew Spring. “It’s obviously a very stressful time for everyone involved and the credit manager wants to gather, analyse and report on the situation to executive management as smoothly and as efficiently as possible. The Jirsch Sutherland independent experts that power Insolvency Intel help our members understand the practicalities that are so important to a creditor’s decision making.

“Working alongside the AICM is a strong alignment for our brand; they are a trusted advisor for credit professionals all over Australia and keep the industry very well informed of any changes that are taking place. “We couldn’t be happier to announce this partnership with the AICM and believe it adds real value to the service that we are offering credit managers nationally.” Insolvency Intel for Credit Managers is the first service of its type that caters specifically to credit managers. It offers on demand, practical and confidential advice on real life situations that arise for its members. “There’s a lot of wonderful synergy between Insolvency Intel and the AICM; both are aimed at sharing as much knowledge as possible with credit managers so they can navigate finance issues as successfully as possible for their business – at a base level, they are about teaching and learning new ways to handle traditional finance issues,” Spring adds. “For managers this is about increasing their staff’s skill sets so they are better equipped to handle any insolvency case that comes their way. And for sole operators, it’s about having as much knowledge to hand as possible so you don’t feel that you have to shoulder the burden alone. Whatever kind of insolvency case you and your business are facing, we can guarantee that someone else in Australia will have experienced the same challenges – this national partnership is all about

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Andrew Spring

sharing that knowledge and growing from it.” “We’re incredibly proud to enter into this partnership with Jirsch Sutherland’s Insolvency Intel,” CEO of AICM Nick Pilavidis says. “The importance of well informed and effectively educated credit professionals is critical to successful insolvency and finance solutions in this day and age. This partnership will accelerate the AICM’s mission to upskill credit professionals and achieve better outcomes during the insolvency process.” The partnership was announced recently at the NSW AICM Industry Golf Day and is effective from April 2018. Contact Andrew Spring T: 1300 547 724 E: AndrewS@jirschsutherland.com.au

Credit Management

Engaging in international business transactions – Do you have a cross-border mindset? By Jade Tyrrell* With the flourishing international trade between Australian parties and those in the Asia-Pacific region, particularly China,1 keeping abreast of the issues that may arise in international transactions could potentially save a number of headaches down the track. This article explores a basic snapshot of select issues relevant to international trade involving products. These are by no means exhaustive, but they are intended to provide a sample of typical cross-border issues for your consideration.

1. Governing law and jurisdiction clauses

Jade Tyrrell

Are you adopting a “cross-border mindset” when drafting your contracts? Are the governing law and the jurisdiction clauses included in a manner that suits your requirements? Do you understand the implications if Australian law does not apply? Courts in general discourage inappropriate “forum shopping” by parties,2 and it is ideal for the contract to include clear governing law and jurisdiction clauses to afford the parties some certainty, in an attempt to avoid unnecessary disputes about these matters. As the governing law clause typically indicates that the parties intended that the particular law is to apply to the relevant contract, the terms

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

of the governing law clause should be sufficiently clear to assist the parties and any courts that may be required to interpret the terms of the contract. The jurisdiction clause stipulates that the parties agreed to submit to the courts of a particular jurisdiction, but there is an important distinction between nonexclusive and exclusive jurisdiction clauses.3 If the choice of the parties cannot be upheld or determined, it may depend upon the application of complex conflict of law rules. There is a wealth of information available regarding the choice of law and jurisdiction clauses for any given contract in international transactions. Including well-drafted clauses in your contracts is a fundamental method of mitigating the risk of uncertainty and/or incurring unnecessary costs arguing about these matters. It is recommended that you obtain legal advice in relation to specific contracts and transactions, as advice may differ depending on your circumstances and the nature of the governing law or jurisdiction clauses sought.

Credit Management

2. The arbitration clause Does your contract include a boilerplate international arbitration clause? If arbitration is appropriate in the circumstances, a properly drafted and enforceable arbitration clause that is tailored to the circumstances can provide the parties with comfort regarding the process to be adopted to resolve their disputes.

The choice of the arbitral seat in your arbitration clause is crucial as it typically determines the law to be applied in relation to the arbitration process. The meaning of the “seat” (the legal location for the process) is therefore different to the “venue” (the physical location) of the arbitration itself notwithstanding that they may ultimately be in the same place.

Australia is a contracting state to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration (New York Convention). Australia enacted into its domestic law the provisions of the New York Convention in the International Arbitration Act 1974 (Cth) (IAA).

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

The IAA is intended to encourage parties involved in international trade and commerce to arbitrate their disputes, to facilitate the use of arbitration agreements and the recognition and enforcement of arbitral awards; and to give effect to international instruments including the New York Convention, the 1985 UNCITRAL Model Law on International Commercial Arbitration, and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, signed by Australia on 24 March 1975.4 One example of the benefits which can be derived from the IAA is found in s 7(2) of the IAA, which provides that a court has the power to order a stay of proceedings and refer the parties to arbitration if there are proceedings in another court where the issues for determination between the parties to the agreement may be settled by arbitration. There are also limited circumstances where a court may not enforce an award. Overall, Australia appears to adopt a positive approach to arbitration and the enforcement of arbitral awards, which is facilitated by the IAA.5 Again, you should always obtain legal advice in relation to specific contracts and to whether or not an arbitration clause is appropriate in the circumstances and the form it should take.

3. Know your Incoterms Have international commercial terms, known as Incoterms, become second nature for you? Those who regularly engage in international commercial transactions will be well-versed in INCOTERMS 2010, which is the most recent version of these rules of interpretation to interpret commonly used trade terms produced by the International Chamber of Commerce (ICC). Nevertheless, many Incoterms continue to be misunderstood and misapplied in practice. Accordingly, it is important to be cognisant of their impact. For example, do you know

the difference between agreeing to an EXW – Ex Works term or DAT – Delivered at Terminal? The passage of risk, the cost to the parties and the parties’ respective responsibilities are different depending on the term used in the contract, so this is an important consideration when buyers and sellers include an Incoterm in their contract. The diagram below illustrates how each of the 11 INCOTERMS 2010 operates for the buyer and the seller at particular stages of the transport journey:

4. Consider the potential cross-border application of the Australian Consumer Law If you are a consumer,6 the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL) may offer some protection, even in crossborder situations. This is also an important consideration for overseas parties selling products or services to Australian consumers, as the US-based company Valve Corporation (Valve) has recently discovered. In April 2018, the High Court of Australia dismissed an application by Valve for special leave to appeal a decision of the Full Federal Court of Australia which held that the ACL applied in respect of Australian consumers/subscribers of an online game produced by Valve. The Full Federal Court found Valve contravened certain provisions of the ACL in connection with the supply of goods to Australian customers and was liable to pay $3 million in penalties.7 The effect of the High Court’s dismissal of special leave is that the ACL applies to Valve in its transactions with Australian consumers and the Full Federal Court’s decision stands. It is also clear that the Australian Competition and Consumer Commission has an interest in pursuing companies in breach of the legislation, including those based overseas which sell to Australian consumers.8

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Food for thought These topics were canvassed in a cross-border hypothetical session at the Asia-Pacific Legal Frontiers Primerus Conference held in March 2018 in Sydney. The conference was attended by representatives of the Australian Institute of Credit Management. International trade between Australia and Asia will be a focus in the coming years. The question remains: how will you apply a crossborder mindset in transactions with an international character to best suit your needs or the needs of your client?

*Jade Tyrrell, Lawyer Carroll & O’Dea Lawyers Phone: (02) 9291 7100 Email: Jade_Tyrrell@codea.com.au www.business.codea.com.au Level 18, St James Centre, 111 Elizabeth Street, Sydney 2000

FOOTNOTES: 1 https://asia.nikkei.com/Spotlight/CoverStory/Identity-crisis-Australia-seeks-newallies-amid-US-China-rivalry. 2 See, for example: Telesto Investments Ltd v Ubs Ag [2013] NSWSC 503 at [209] – [210] per Sackar J. 3 In Ace Insurance Ltd v Moose Enterprise Pty Ltd [2009] NSW 724, Brereton J stated at [15]: “Not every submission to jurisdiction involves a promise not to sue in a foreign jurisdiction; it will do so only if it is an “exclusive jurisdiction” clause. Whether a jurisdiction clause is an exclusive jurisdiction clause is a question of construction of the particular contract, and the absence of the word “exclusive” is not determinative.” 4 International Arbitration Act 1974 (Cth), section 2D. 5 As noted by The Hon. Chief Justice Allsop of the Federal Court of Australia and the Hon. Justice Croft of the Supreme Court of Victoria in ‘Judicial Support of Arbitration’, paper presented at the APRAG Tenth Anniversary Conference on 28 March 2014; see also International Arbitration Act 1974 (Cth), s 8(1). 6 Defined in the Australian Consumer Law, section 3. 7 Valve Corporation v Australian Competition and Consumer Commission [2017] FCAFC 224. 8 https://www.accc.gov.au/media-release/ high-court-dismisses-valve%E2%80%99sspecial-leave-to-appeal-application.

Credit Management

A simple guide to determining priority between trade creditors with caveats registered on land By Daniel Turk and Anna Darroch-Dobbie* It is common practice for trade creditors to obtain security from debtors in credit application terms in the form of a charge over land provided and then proceed to have a caveat registered against the debtor’s land. An issue can arise when there are competing caveat interests over the debtor’s land and not enough money to satisfy all the claims.

Creditor’s interest in land Daniel Turk

Anna Darroch-Dobbie

An example under which an interest in land may arise is a credit agreement which contains a charging clause where a charge is created against the land owned by the debtor to secure the debtor’s indebtedness to the creditor. The following is a typical charging clause appearing in credit applications: The debtor hereby charges any real estate wherever situated it now or hereafter owns with the performance of its obligations and liabilities under the Agreement and acknowledge that the creditor may at its discretion register a caveat in respect of such charge. This clause gives the creditor a

caveatable interest in the debtor’s land and therefore a right to register a caveat.

What is the Priority of Competing Interests?  In a competition between equitable interests in land, the priority of the competing interests will usually be determined by the date that the equitable interest was created (‘first in time’)1. This is usually the date of the credit application which contained the charging clause.  The court can dispense with the first in time rule if it finds there has been an act or omission on the part of the earlier interest holder which should warrant that priority be afforded to the later interest holder2.  In determining whether the first in time rule may be dispensed with, the courts look at the whole of the conduct of the parties and surrounding circumstances3. In summary, the earlier credit application has priority unless there was some conduct by that earlier creditor which will postpone their priority.

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Priority of Registered Interests Priority (subject to any postponing conduct) There is a mortgagee and caveats registered by other creditors.

1. Mortgagee 2. Caveator with the earlier equitable interest (‘First in Time’) 3. Caveator with the later equitable interest

Is your interest the only interest registered on the property?

Yes

There is a mortgagee but no other registered interests.

Priority (subject to any postponing conduct)

There is no mortgagee, but there are caveats registered by other creditors.

Priority (subject to any postponing conduct)

1. Mortgagee 2. Your interest

1. Creditor with the earlier equitable interest 2. Creditor with the later equitable interest

Your interest has priority. For more information contact Daniel Turk at TurksLegal on (02) 8257 5727

Notes: Equitable interest: This is the date of the credit agreement/guarantee containing the “charge” or “mortgage security clause”. Postponing conduct: Priority may also be affected by postponing conduct on behalf of a creditor. This may occur where a creditor has an interest in the debtor’s property under a credit application/guarantee, but has failed to register a caveat to protect their interest, leading another creditor to continue to supply goods to the debtor on the assumption it is the only secured creditor. In that case, the court may dispense with the First in Time principle and priority may be determined by the date of registration of the caveat.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Credit Management

Effect of a caveat The purpose of a caveat is to act as a notice to parties who search the land title register, and to prevent the registration of dealings which might defeat the unregistered interest of the caveator without notice to the caveator of the proposed dealing4. Lodgement of a caveat by a holder of an interest in the property will prevent the recording of new dealings on the title of that property and could extinguish the holder’s interest, such as transferring title of the property to a third party.

Postponing conduct Postponing conduct is actions or omissions on the part of the holder of an earlier equitable interest that

operate to ‘postpone’ that holder’s interest so that the holder of the later equitable interest has priority. The courts have noted that a delay or failure in lodging a caveat may amount to postponing conduct in situations where the failure or delay by the holder of the prior equity to lodge a caveat contributed to a belief on the part of the holder of the subsequent equity that the prior equity did not exist5. An example of this may be where an earlier creditor does not register a caveat and a later creditor searches the register and based upon there being no caveat registered, proceeds to give supply to the debtor. The later creditor who did the search may seek priority over the earlier creditor.

The courts have held that postponing conduct also exists where a party withdraws a caveat causing a later interest holder to assume the earlier party no longer seeks to enforce or protect their interest6.

The Doctrine of Notice The doctrine of notice operates to protect a creditor who has acquired a legal interest in land/ property for value and without any notice of the existence of any prior equitable interests in the land/real property. In such a case and if certain requirements are met, the holder of the later legal interest will retain priority over any earlier equitable interests in the land of which it did not have notice7.

The purpose of a caveat is to act as a notice to parties who search the land title register, and to prevent the registration of dealings which might defeat the unregistered interest of the caveator without notice to the caveator of the proposed dealing

Online Credit Application and Assessment System. Make the shift from paper applications today! CLICK HERE SEE HOW CREDENTIAL WORKS

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May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Credit Management

Summary

 It must be lodged for a reasonable

FOOTNOTES:

As a general rule, where interests are recorded against the title of land in the form of caveats, their respective priorities are determined in accordance with the date of the underlying agreement giving rise to the interest where earlier in time prevails rather than the caveat date. A creditor may give up their earlier interest if there is postponing conduct by them and a later interest in land has relied on the conduct of the earlier interest. For a caveat to be valid, it must meet the following general requirements:  There must be an underlying right creating an interest in the property such as a charging clause contained within a credit agreement,

cause such as securing a charge against land, and  It must meet the registration requirements prescribed by the relevant state or territory where the land is situated. It is important to note that each state or territory may have additional requirements when caveats are registered against land requiring certain actions be undertaken in order to prevent the caveat from lapsing, such as issuing proceedings.

1 See; Rice v Rice (1854) 61 ER 646; Heid v Reliance Finance Corporation Pty (1983) 154 CLR 326.

*Daniel Turk, Partner TurksLegal T: 02 8257 5727 M: 0408 667 220 daniel.turk@turkslegal.com.au www.turkslegal.com.au *Anna Darroch-Dobbie, Lawyer TurksLegal

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

2 See; Latec Investments Ltd v Hotel Terrigal Pty Ltd (In Liq) (1965) 113 CLR 265, 276; Heid v Reliance Finance Corporation (1983). 3 See; Rice v Rice (1854). 4 See, for example: Bunnings Group Ltd v Hanson Construction Materials Pty Ltd & Anor [2017] WASC 132. 5 See; Butler and Fairclough; Heid v Reliance Finance Corp. 6 See; Perpetual Trustee Company Ltd (original plantiff ), Performance Capital Motive Mortgage Pty Ltd v Motive Finance and Leasing Pty Ltd [2010] NSWSC 429 where the Court referred to the case of Elderly Citizens Home of SA Inc v Balnaves (1998) 72 SASR 210. 7 In NSW this principle is enshrined within s 42(1) of the Real Property Act 1900 (NSW).

Cyber Security

Fancy a european holiday? A pocket travel guide to the GDPR By Terry Ledlin*

Why Europe? When we put Privacy into perspective, our modern day Privacy regime is largely driven by developments in the EU, UK and the US. A Global Regulator is not yet a reality, but many countries have introduced laws based on the automatic processing of personal data that have been developing in Europe since the late 1970’s – early 1980’s. Plus, it’s coming into summer over there.

the internet to analyse and predict personal preferences, behaviours and attitudes. You should note that the GDPR applies to all businesses, irrespective of size or the turnover amount of the business. Even if your business is not subject to the Privacy Act 1988 (Cth) (‘Privacy Act’) because the turnover is less than $3M, your business could still be caught by the GDPR.

What is my itinerary? Destination GDPR In recent times, Europe has developed the EU General Data Protection Regulation (“GDPR”) containing new data protection requirements. It aims to replace the EU’s existing national data protection rules by implementing clear, uniform data protection laws. It is intended to enhance customer trust in online services and more legal certainty for business.

Is it for me?

Terry Ledlin

The GDPR will apply to businesses operating in the EU. But it will also catch Australian business having an office in the EU, a website where EU customers can order goods and services or which enables payment in euros, or a business that tracks individuals in the EU on

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

If the GDPR applies to you, you need to: 1. Obtain an individual’s specific consent to not only collect, but to keep and use their personal data. Individuals must also be given the right to withdraw their consent as well. 2. Provide individuals with the right to receive their personal data, particularly in a format which is easy to read and transmit to others. 3. Give individuals the right to access their personal data, without delay or charge. 4. Provide individuals with the right to object to the processing of their data 5. Give individuals the right to know why their data is processed, who will share their

Cyber Security

personal data, how long their data will be kept, and how it will be processed. 6. Afford individuals the right to restrict the processing of their personal data. 7. Allow individuals the right to rectify their personal data. 8. Provide individuals the right not to be subject to automatic processing of their personal data. 9. Give individuals the right to have their data deleted. There is also a mandatory data breach notification requirement, similar to the Australian scheme introduced in February 2018 under the Privacy Act. Under the GDPR though, applicable businesses must notify the Regulator of personal data breaches within 72 hours after the breach becomes known.

When do I take off? The GDPR comes into effect from 25 May 2018.

What happens if my VISA is cancelled? A breach of the GDPR can result in a fine of up to 4% of the prior years’ annual global turnover or up to €20 million, whichever is greater. Being prepared always helps when travelling, so for more information on how to update your Privacy Policy to comply with the GDPR, contact Terry Ledlin, Special Counsel.

You should note that the GDPR applies to all businesses, irrespective of size or the turnover amount of the business.

*Terry Ledlin Special Counsel Ledlin Lawyers Email: tledlin@ledlinlawyers.com.au Direct line: (02) 8488 3383

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Comprehensive Credit Reporting

Comprehensive credit reporting (CCR) – recent developments By Elsa Markula*

Elsa Markula

Credit reporting in Australia has traditionally involved the listing of ‘negative’ information about an individual (defaults, bankruptcies, court judgements), as well as a record of credit enquiries that the credit reporting body (or ‘bureau’) has received about an application for credit made by the individual. This negative credit reporting system in Australia has been around for over 50 years. It started in 1967 with the formation of the joint venture Credit Reference Association of Australia (CRAA) by a group of retailers who provided credit and decided to pool information. This 50-year-old negative credit reporting system is well past its use by date. Negative-only credit reporting information provides few benefits for either industry or consumers. It has the effect of creating an information asymmetry, which for lenders will mean greater reliance on manual assessments and account statements to verify the veracity of the information in an individual’s credit application. In turn, this has led to higher lending costs.

A negative-only credit reporting system has also put Australia behind most developed economies, with countries including the United States, the United Kingdom, South Africa having well-developed comprehensive credit reporting (CCR) systems. Recognising this, in 2014, the Privacy Act was amended, expanding credit reporting to new ‘positive’ data sets: information about current credit accounts (including the name of the credit provider, the open and close date for the accounts, the credit limit, the type of account and the terms and conditions for the account), and repayment history for those accounts. These positive data sets are referred to as comprehensive credit reporting (CCR)1. The use of CCR enables credit providers to better understand the risks of lending to any applicant. Once the bulk of lenders utilise CCR data exchange, a credit report should provide a rich source of information to accurately assess an individual’s creditworthiness and capacity to repay additional credit. In that way, under CCR it has been demonstrated that lenders

This 50-year-old negative credit reporting system is well past its use by date.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Comprehensive Credit Reporting

can maintain current approval rates while reducing losses. CCR will also support a fairer lending system for consumers. With CCR data, a consumer is more easily able to demonstrate a good credit record, which is important for those with a prior default which stays on the system for five years. For consumers with either little or no current credit history on file, it also helps them to build or develop a credit record2. Further, under CCR, overall access to credit is improved – which is recognised as an important driver of economic growth. One of the barriers faced by new lenders is also reduced – because they don’t have any customer history the riskiest customers tend to flock

to them. If that new lender were able to access CCR data, this should mitigate or even avoid this risk. This promotes greater competition within the lending sector. Both the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have been open in their support of CCR data. In expressing this support, it has been made clear that CCR places credit providers in a better position to fulfil their obligations to lend responsibly Even with the green light given to CCR in Australia, there has been very slow uptake of CCR data. Initially, it was considered industry could move towards CCR utilising

its own set of industry rules for data exchange. The Australian Retail Credit Association developed the ‘Principles of Reciprocity and Data Exchange’ (PRDE) which were authorised by the Australian Competition and Consumer Commission (ACCC) in December 2015. These industry-developed rules sought to implement a CCR exchange utilising the principles of reciprocity (“you only get what you give”), consistency, transparency, and enforceability. While the application made to the ACCC reflected that the PRDE had the strong support of industry, following authorisation, only a small number of credit providers have signed up to begin CCR data contribution.

CCR will also support a fairer lending system for consumers. With CCR data, a consumer is more easily able to demonstrate a good credit record, which is important for those with a prior default which stays on the system for five years.

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May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Comprehensive Credit Reporting

Coinciding with these developments, in 2016 the Productivity Commission undertook an inquiry into Data Availability and Use in Australia. This inquiry highlighted the benefits of CCR data exchange, but also raised concerns with the slow embrace of CCR by the wider credit provider community. The Federal Government responded with a warning to industry that if it failed to voluntarily move toward CCR, Government would step in and mandate participation. In November 2017, not satisfied that industry had heeded its warning, the Government confirmed its intent to legislate. Draft mandatory CCR legislation was tabled in Parliament in March 2018. With this legislation likely to be enacted in May 2018, and coming into effect by 1 July 2018, Australia will finally have a functioning CCR system. At this stage, the legislation will apply only to the major four banks (Westpac, ANZ, Commonwealth Bank and National Australia Bank),

as well as the three main credit reporting bodies, being Equifax, illion and Experian. Much of the detail of the legislation will also be dealt with by regulation. At this stage, the draft regulations are yet to be released, however, based on the draft Explanatory Memorandum, it looks likely that the use of the PRDE industry rules will continue to be a key feature of mandatory CCR. In the July 2018 edition of Credit Management in Australia, we will provide an overview of the mandatory CCR legislation, how it will operate and what impact it is anticipated to have on both the consumer credit market and commercial credit markets in Australia. We will also look to the impact of possible reform in credit reporting and SME lending, noting this was another issue flagged by the Productivity Commission as part of its Data Availability and Use Inquiry.

*Elsa Markula Legal & Regulatory Affairs Manager, Australian Retail Credit Association

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Even with the green light given to CCR in Australia, there has been very slow uptake of CCR data.

FOOTNOTES: 1 It should be noted that what information is encompassed by CCR differs across the world. For instance, in the United Kingdom, CCR includes current credit account balance information, and in the United States, in addition to balance, employment information is exchanged. 2 ARCA has developed the CreditSmart website (creditsmart.org.au) to provide consumers with an unbiased and fair explanation of the credit reporting system in Australia.

Credit Checking

Let your business take advantage of an online credit application By Kirk Cheesman*

Kirk Cheesman

Online credit applications have been talked about in the credit industry for some time now and they are becoming more common among businesses. A traditional business may be wary of adapting to new technologies such as online credit applications but there are many advantages as business becomes increasingly fast-paced. Let’s take a step back to the principals of credit management and its role in business. We often misconstrue the role of the credit department, diminishing it to simply collecting money when it is due. Somewhat correct. The team is also there to support and work with the sales department as they move along their sales cycle. The credit team will determine: zz If the prospective customers are who they say they are zz If they have the capacity to pay zz Whether there is previous bad payment history zz If the directors have any adverse information against them zz and so much more… The credit team should be consulted along the way, but this component can often drag out the sales process which leads to longer sales cycles and, potentially, leaves the prospective customer looking elsewhere – no business would appreciate that!

includes an ongoing supply contract over a 24-month period. Before signing off on the contract, the sales manager ensures the potential client completes the company’s credit application. After submitting the application (including all terms and conditions, guarantees and any special requirements) the sales manager waits for the response from the credit department. Instead, however, of needing to wait for the credit department to manually check all details, request and review a credit check then process this internally, the online form has already done all this! The credit team now receives confirmation that this business is in good financial health and the sales manager completes the sale.

So, let’s imagine this scenario:

*Kirk Cheesman Managing Director – NCI 1800 654 500 Kirk.cheesman@nci.com.au

Your company’s sales manager is about to finalise a large deal that

So why use an online credit application? 1. Instantaneous data checking of the correct legal entity 2. Fewer hours spent manually processing for the credit team 3. Timely response rates for the credit and sales team 4. Electronic storage An online credit application could give your credit department the edge it needs.

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Hardship

Tips for handling “hardship” By Roger Mendelson*

Roger Mendelson

Credit Managers cannot ignore the issue of debtor hardship. Not only are there legal ramifications for failure to set up and operate an adequate hardship policy but there is also a sound business case in doing so. This article is based on the assumption that your business is legally required to operate a hardship process. The starting point is that there is no binding and accepted definition of hardship, so every process requires a degree of flexibility. You must have a detailed hardship policy and defined practices and you must ensure that the principles are followed. I recommend that the policy cover two distinct areas, namely consumer debts and business debts. In addition, there should be a clear definition between “hardship” and “extreme hardship”. “Hardship” would cover the situation where a debtor cannot pay or enter into a meaningful arrangement at present but expects to be able to in the future. Examples of this would include illness, with recovery underway or loss of job but expectation of obtaining another one shortly. “Extreme Hardship” would cover life changing events such as major

illness, major injury, loss of job with no prospect of another one. The policy would clearly need to provide for files to be flagged and taken out of the collections process. In addition to files where there has been a claim by a debtor or third party acting on its behalf of hardship, the process should also flag files where there is an obvious hardship situation, such as someone suffering a mental illness or just clearly incapable of managing their own financial affairs. Files which have been flagged should be transferred to a centralized hardship officer or, depending on the size of the business, a hardship group and should not be dealt with by any standard collections person. The hardship files should be reported upon on a weekly basis, in summary form, in order that you may pick up on trends. For example, if there is a clear increase in hardship cases as a percentage of total invoices, then this may indicate that the credit system itself is deficient, in that credit is increasingly being granted to customers who are in a weak financial position. The policy should cover off on processes for handling and dealing with third party advisers. The reality is that processing hardship claims can be expensive

... there should be a clear definition between “hardship” and “extreme hardship”.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Hardship

in terms of time spent and risk of complaints being made to consumer bodies and/or the media. Thus, the policy should preferably be focused on dealing with applications quickly and economically. For every business, there is a quantum of debt where it is simply uneconomic to pursue and these claims should simply be written off. In our experience of acting for over 56,000 clients across Australia, covering all sizes and business types, most hardship applications are genuine. Accordingly, the starting point for applications for smaller debts should be to simply accept that they are genuine, rather than wasting time to verify if they are genuine or not. There is no “one size fits all” way of classifying hardship claims, so the policy must allow for a significant degree of discretion to be given to the Hardship Officer. A good practice is for the Hardship Officer to talk to the debtor and ask a series of questions. An experienced officer will quickly pick up if the

There is no “one size fits all” way of classifying hardship claims... claim is genuine and will be focused on achieving a quick resolution. This process cannot normally be handled by email. A genuine debtor will be more than happy to talk on the phone. The end result of a hardship file is to either write the debt off very early in the piece or otherwise set up a “meaningful and sustainable payment arrangement” or an acceptable lump sum payment. The fact that a file is within the hardship bucket does not preclude you from ultimately proceeding to a collection option and using processes such as default listing a debtor and/or proceeding to legal action and legal enforcements. However, I suggest that files which do get moved back into the collection process be subject to review by a more senior manager and that further collections activity be undertaken with a high degree of caution.

It is not just the threat of action by ACCC which guides many processes but also the concern about reputational damage to the company’s brand. By ensuring that the hardship policy is in place and applied will thus not only ensure that there is no breach of the regulations but will provide a counter in the event of a threat being made to harm the reputation of the company.

*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 56,000 small to medium size businesses across Australia and operates on the basis of NO RECOVERY – NO CHARGE. www. prushka.com.au Free call 1800 641 617. The writer is also the author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival, both published by New Holland Publishers.

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Hardship

What does the law require when assisting consumers in hardship? By Rebecca Fahey*

Rebecca Fahey

Financial hardship, in a credit society such as Australia, can affect almost anyone. To protect consumers from the negative impacts of financial hardship – which can include the stresses of enforcement action and disconnection from essential services – legal protections have been incorporated into the regulatory frameworks for the consumer credit, energy, water and telecommunications sectors. Particularly since the global financial crisis, there has been significant attention paid to the problem of financial hardship, where a consumer takes on payment obligations under a contract, but becomes unable to meet them when they fall due. This use of the term ‘financial hardship’ is specific to the context of debt default and payment difficulty in Australia’s consumer credit, energy, water and telecommunications sectors. Financial hardship is therefore distinct from the separate problem of poverty, even though falling into arrears on mortgage, rent and utility payments has been used as an indicator of deprivation and financial stress in Australian and overseas

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

research on poverty and social exclusion. Financial hardship encompasses many situations, from falling behind with mortgage repayments to failing to make the minimum monthly repayment on a credit card, or being unable to pay a utility bill. Primarily, the National Consumer Protection Act 2009 (Cth) governs the law as it pertains to financial hardship (“National Credit Act”). The National Credit Act contains, at Schedule 1, the National Consumer Code (the “Code”), sections 72, 73, 74 and 75. ASIC administers the law concerning protections afforded to consumers who are in financial hardship. Since 2009, sections 72 to 75 inclusive of the Code have governed the obligations on a financial service provider when a consumer seeks to claim protections for financial hardship that they may be facing. It provides for a consumer who is indebted to a service provider to request a change to the terms of their credit contract on the grounds of hardship. Hardship assistance under any of these legal protections usually

Hardship

involves a variation to the timing of repayments due under the consumer’s contract, such as a moratorium on repayments, or a payment plan allowing the consumer to make repayments in smaller instalments over a longer period of time. Service providers may also, at their discretion, offer measures that effectively reduce the amount of the consumer’s debt, either by way of an incentivised payment plan that matches repayments made on time with money credited to the consumer’s account, or through whole or partial debt waiver. The two main reasons for financial hardship are: 1. The consumer could afford the loan when it was obtained but due to a change in circumstances has occurred post-loan; or 2. The consumer could not afford to repay the loan when it was originally obtained. If the consumer is in the second category then a dispute based on irresponsible lending and/or unjustness could be the outcome should this consumer elect to progress this matter to the ombudsman or the court for determination.

Financial hardship encompasses many situations, from falling behind with mortgage repayments to failing to make the minimum monthly repayment on a credit card, or being unable to pay a utility bill. In relation to understanding the triggers required for your businesses to understand when a hardship notice has been provided to them by a consumer the following two preconditions must be met: 1. The consumer is unable, for reasons of illness, unemployment or other reasonable cause to meet their obligations. The term reasonable cause is interpreted widely by ASIC, the CIO and FOS, and the Court. They can be such things as a general deterioration in the consumer’s financial situation, a short or long term period of imprisonment, the engagement as an independent contractor for a short period to

attempt to save small business, family/relationship breakdown or the death of close family member can give rise to an assessment of hardship (to name but a few); and 2. The consumer reasonably expects that they will be able to discharge their obligations under the contract if the contract terms are changed as proposed. It is enough for a debtor to have a reasonable and certain prospect of recommending regular instalment payments within a certain period. This is known as the Harship Test. A recent study by the Melbourne Law School at the University of Melbourne, which is the first in-depth

Claim by guarantor for hardship pertaining to a business purpose car loan – January 2017 A claim was made by a guarantor to a business purpose car loan that: 1. She had not received a notice of assignment (the debt had been purchased); 2. Her application for hardship had not been adequately considered; and 3. That her offer to pay out the car loan and retain ownership of the vehicle for $10,000 had been accepted and the credit provider was bound to honour this arrangement. The Ombudsman found that: 1. She had received a notice of assignment;

2. That her application for hardship could not be determined, as it related in part to a business purpose loan, and without approval from the liquidator of her company (the company had been placed into liquidation) the Ombudsman could not become more involved in that aspect of her dispute, due to any other affect that may have on creditors of the liquidation; and 3. That even if the offer of $10,000 have been accepted, which potentially it had not, the credit provider was entitled to withdraw that consent, as the settlement sum had not yet been paid and seek payment of the entire sum.

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Hardship

In deciding whether or not a credit contract should be varied on the grounds of hardship, the court must consider ‘the whole of the relevant circumstances’

study of the practical operations of the financial hardship laws, highlighted a tendency on the part of financial service providers to take a generic, one-size-fits-all approach to compliance with the legal hardship protections that prevents them from adequately engaging with consumers struggling with debt.

Court interpretation of hardship and obligations of financial service provider The meaning and operation of the hardship provisions under the National Credit Act and the Code has so far been the subject of fairly limited judicial consideration. The Courts have made it clear

Claim by consumer on an assigned credit card debt – January 2017 A claim for hardship consideration was made by the consumer to the Ombudsman, seeking that: 1. The service provider be ordered to accept a lump sum payment of the debt, which represented 25% of the overall debt; Background 1. The consumer had lodged a hardship notice with respect to the assigned debt in 2014, after the debt was assigned in 2015. Payment plan of $20 per month agreed with the financial service provider. In 2015 a new hardship notice is lodged and the payment plan is reduced to $10 per month. 2. In 2015, as part of new hardship notice, the consumer requests the acceptance of a lump sum offer of 25% of the debt. Determination 1. It was determined that the service provider acted reasonably and within the scope of its obligations under the Code when dealing with the consumer. 2. The service provider significantly reduced the monthly repayment – a five year repayment plan would see them recouping $72 per month on a commercial repayment basis (the Ombudsman sees this as a 3 to 5 year payment plan in most cases). 3. The service provider is not obligated to accept the 25% lump sum offer, nor does the Ombudsman view its role in this cases, in the circumstances, as being able to determine that they ought to do so.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

that the reasoning in cases decided under the equivalent provisions under the former UCCC are also applicable to proceedings brought pursuant to section 72 to 75 of the Code. A recent Court decision that came out of the Victorian Supreme Court (Westpac Banking Corporation v Tesoro [2012] VSC 182) in 2012) established the Courts interpretation of section 72 of the Code, and a “hardship test”. Even where the preconditions of the Hardship Test are met, the Court still has a wide discretion in determining the correct outcome. In deciding whether or not a credit contract should be varied on the grounds of hardship, the court must consider ‘the whole of the relevant circumstances’, give effect to the purposes and objects of the Code and ‘make a determination which meets the justice of the case’. A case arose in South Australia (Commonwealth Bank of Australia v Hocknell [2012] SASC 52) shortly after the Victorian Supreme Court decision, where a consumer had made an application for hardship pertaining to a home loan secured over an investment property. In that decision, the Judge found that the justice of the case did not require a variation to the credit contract be granted, as the loan in question was in relation to an investment property, rather than a family home, and the debtor did not require the income from that investment property to meet his living expenses. (New decision) Sometimes – but not always – the debtor’s right to give a hardship notice under section 72 may justify the exercise of the court’s discretion to set aside a default judgment, even where the debtor has not demonstrated a defence on the merits. In two New South Wales cases (Commonwealth Bank of Australia v Wales [2012] NSWSC 407 and Commonwealth Bank of Australia v Larsen [2012] NSWSC 408 (Callum J)) heard on the same day in the Supreme

Hardship

Court of New South Wales, the Judge stated that the ‘critical consideration’ enlivening the exercise of the discretion in those particular cases was the conduct of the bank – which her Honour described as ‘calculated to defeat the ameliorative objects of the hardship provisions in the National Consumer Code.’ The debtor had ‘endeavoured in good faith to engage the processes contemplated by the National Consumer Code but was defeated by the bank’s passive resistance to those processes.’ In the absence of any comparable conduct on the part of the credit provider, it is unlikely that the discretion will be enlivened. Despite these New South Wales decision, in practice claims for hardship raised in defences to actions by financial service providers before the Court seeking payment of debts due to breaches of contract, are rarely, if ever, determined in favour of the consumer. In our experience, they are also rarely, if ever, included in a defence by a consumer, although circumstances of financial hardship might exist. Impecunity and hardship are not consider to be valid defences to debt recovery proceedings. That being said, hardship notice given to a service provider, even during litigation, ought to be dealt with in accordance with the Code. In practicality, commercial resolutions can be reached, costs of litigation can be reduced, or stopped in their tracks, and time consuming and costly applications to CIO or FOS can often be avoided, if these claims for financial hardship raised during litigation by a consumer are adequately dealt with at the time. Even a baseless claim for financial hardship made during litigation, often times to delay or frustrate the court proceedings, can have a positive result, if it causes the consumer to be engaged in a process that leads to a commercial repayment plan and bring court proceedings to and end.

Claim by consumer for hardship regarding car loans – October 2017 Background 1. The consumers applied for two (2) separate car loans with a dealership. The loan was secured with the assistance of the dealership. The first loan was in October 2012 and the second in September 2013. 2. The hardship notice was given by the consumers on 4 September 2015. 3. On 7 September 2015, despite being on notice, the service provider sent a notice of demand detailing that repossession was imminent. In the background the service provider sought to determine the hardship notice, however, it was determined by the act of the demand notice being sent and its approach to the hardship determination (requesting documents within short time periods, etc) that the service provider had breached its obligations under section 72 of the Code. 4. On 17 November 2015 the vehicles were repossessed, and on 18 November 2015 the consumers lodged their complaint with the Ombudsman. Determination 1. The financial service provider was unable to provide us with information to show that it complied with its responsible lending obligations. As such, the Ombudsman drew a negative inference from the non-receipt of this information to infer that the service provider breached its responsible lending obligations. 2. After the Ombudsman completed its own serviceability assessment, it found that the consumers could not afford the loans. 3. The Ombudsman also found that the financial service provider breached the hardship provisions under the National Credit Code and breached the Code when it repossessed the consumers’ vehicle. 4. The Ombudsman recommended: a. The service provider release the consumers from the car loans; b. The service provider remove any adverse credit listings from the consumers records; c. The service provider forgive the balance owing under the car loans in the sum of $11,546.00 d. The service provider pay compensation to the consumers in the sum of $11,546.00 due to its breach of the responsible lending guidelines and $700 for non-economic loss for its breach of the hardship obligations. e. Provide the consumers with a written apology.

Recent Determinations and

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Hardship

Recommendations made by CIO and FOS in hardship related cases Disputes in relation to the application and interpretation of section 72 of the Code can arise for a variety of reasons; for example, the credit provider may not respond to the application, or may refuse to vary the contract, or may not suspend enforcement proceedings against the consumer. Usually, the first step for the consumer in these situations is to initiate the credit provider’s own internal dispute resolution process by making a complaint to their complaints officer, either over the phone or in writing, and awaiting a response. If the dispute is not resolved internally, the primary forums to which the consumer may make a complaint against the credit provider are the two independent external dispute resolution (EDR) schemes provided

by the Financial Ombudsman Service (FOS) and the Credit and Investments Ombudsman (CIO). Most Australian banks are members of FOS, while many debt purchasers, credit societies and credit unions are members of CIO. These schemes have the aim of providing an accessible avenue for the resolution of consumer disputes with a minimum of formality and technicality. While these schemes focus primarily on alternative dispute resolution methods such as negotiation and conciliation, it has been suggested that in this context, the term “alternative dispute resolution” is something of a misnomer: for consumers in financial hardship seeking to make a complaint against their credit provider, the freeof-charge service provided by an industry-funded ombudsman is usually “the only viable means of redress, not so much an alternative to the courts.”

Claim by bankrupt regarding loan over prime mover – ongoing 1. Our client granted a finance facility to a consumer for his trucking business, as a sole trader in September 2015. 2. In October 2015, the consumer lodged a debtors petition and declares himself bankrupt. 3. Due to the breach of the finance facility (in declaring himself bankrupt) our client lodges a caveat over real property owned by the consumer and repossesses prime mover later in October 2015. 4. In November 2015, the bankrupt consumer lodges a complaint with FOS. 5. In January 2016, FOS made recommendations allowing financial service provider to retain its caveat (and issue proceedings to maintain the caveat as the proceedings relate to Queensland) but refuse to allow the service provider to sell its prime mover. 6. Submissions are made by the service provider to FOS to ensure that this dispute is treated as a test case, as it intends to challenge the outcome, should it find against the service provider. 7. FOS elects to close its file, and allow the financial service provider to litigate the matter before Court regarding its entitlement to the caveat and the repossession and sale of the prime mover. Interestingly the reason not to determine had little to do with the fact that the consumer entered into a business purpose loan, and was a bankrupt at the time of his application – two reasons that ought to have limited his access to the Ombudsman.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Conclusion While the range of circumstances in which a consumer may seek a hardship variation is ostensibly wide, section 72 retains a major constraint on consumer who are likely to succeed in actually obtaining a variation. Namely, section 72(3) implies that credit providers are especially entitled to refuse a variation if the consumer does not expect to be able to resume their obligations within an undefined period of time after a variation is granted. This raises questions as to whether section 72 can be used by consumers experiencing ongoing or entrenched financial disadvantage, as opposed to episodic or short-term payment difficulties caused by an unforeseen financial shock. The exclusion of these consumers is reinforced by the structure of section 72, which requires an individual consumer to initiate the hardship process and, if refused a variation, to take legal action against their credit provider. This presupposes a customer who has a strong awareness of their rights as a consumer, and the confidence and financial resources necessary to commence litigation in the courts under section 74. In practice, of course, FOS and CIO are the primary forums for hearing complaints under section 72. Yet despite the availability of these more informal and generally no-cost dispute resolution services, the fact remains that consumers in long-term financial hardship – particularly those on low or irregular incomes, or with a long-term or chronic illness, or low levels of English literacy – are less likely to be aware, let alone successfully make use of, these provisions.

*RebeccaFahey, Partner, SLF Lawyers Ph: (03) 9600 2450 E: rfahey@slflawyers.com.au www.slflawyers.com.au SLF Lawyers have offices in Melbourne, Sydney, Brisbane and Perth

PPSA

The top 10 disasters of personal property financing By Leigh Adams*

Do you borrow or lend money with security? Or are you involved in invoice financing, floor plan financing, debtor financing, chattel mortgages or equipment leasing or rentals? If so, then read on – this article is for you! We are told that the Personal Property Securities Register (PPSR) as it applies under the Personal Property Securities Act (PPSA) is easy to operate. Is it? What can go wrong? Let’s look at the 10 top disasters we have seen over the past 6 years.

Disaster No 1

Leigh Adams

Your registration is “seriously misleading” and therefore void. Your customer’s liquidator will thank you for coming. Your assets are now in the liquidator’s hands and will be used to pay unsecured creditors. You should thank the liquidator: if you are lucky, you might get 10% back of the 100% of your assets lost to your insolvent customer. Examples of seriously misleading registrations include: a) Recording the name of the partnership giving the security as that of an individual partner rather than the firm’s name. b) Recording the collateral description simply by reference to the date of the general security agreement which created the security agreement instead of describing it by reference to the collateral classes as required by the PPSA. c) Failing to indicate that the collateral was inventory.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Disaster No 2 Forgetting to register the collateral within 20 business days after the security agreement came into force. Such a registration will not give you any priority whatever if the grantor passes into administration or liquidation within 6 months of your registration.

Disaster No 3 Failing to register Personal Money Security Interests (PMSIs) within 15 business days of the lessee or borrower getting possession (where inventory is not involved). Again, this will cause your security interest to be of no value at all, if the grantor passes into administration or liquidation within 6 months.

Disaster No 4 Omitting to register a PMSI (in relation to inventory) by the time the lessee or borrower gets possession. It’s easy to slip up on this one. Just give the money to your customer directly. They are sure to mix it with their own money and thereby ruin the money trail required to get over this hurdle. The six month rule above also applies to this scenario.

Disaster No 5 Not knowing that failure to describe the PMSI as a PMSI when registering the security interest makes it void and of no effect whatsoever. The bank with a general security agreement will take your property (or cash) and keep it. No wonder bankers are grinners.

PPSA

Disaster No 6 Not understanding that “inventory” under the PPSA does not just mean inventory as you and I understand the word. It is defined to include “goods held to be provided under a contract for services”. So the company which supplies its scaffolding to a building site as part of the process in demolishing a building, is supplying “inventory” and needs to register scaffolding as inventory collateral to which the security interest of the scaffolding supplier has attached.

Disaster No 7 Not being aware that the PPSA provides that the following circumstances cause a registration with respect to the relevant collateral to be totally ineffective. a) miss-spelling the grantor’s name (even by one letter). For example, stating “Technology” rather than “Tecnology”. b) miss-spelling the grantor’s name by getting capital letters and spaces mixed up (even where there is no “miss-spelling” per se. For example stating “motorhome” rather than “Motor Home”. c) Describing the grantor by reference to its ABN where the requirement is that it be described by its ACN. d) Failing to include a serial number for the collateral when required to do so – for example, when selling, buying, leasing or financing a motor car or boat. e) Failing to correctly transcribe the 17 digit VIN for a motor vehicle. f) Not realising that patents, plant breeders’ rights, trade marks, designs, watercraft and aircraft all have serial numbers too and the serial numbers must be used when registering such collateral on the PPSR if it is described as ‘’consumer property’.

Disaster 8 Not realising that the following registrations may be “seriously

misleading” and therefore void. It’s just that here have been no cases on the point so no-one knows yet. a) Getting the ACN of the secured party wrong. b) Misdescribing collateral. For example, you can describe “apples” as “fruit” but can you describe “fruit” as “apples”, if it is really “pears”? c) What if you describe the collateral as “steel pipes” where there are numerous types of steel pipes on the property of the grantor when an administrator is appointed? That sounds like a dog’s breakfast to us, but who knows? d) Describing a PMSI as a “non-PMSI”. e) Describing collateral as not being inventory when it is. The list goes on and on.

Disaster 9 Not realising that the registration requirements for grantor identifiers are different depending on whether the grantor is a body corporate (for example a company), a partnership, a trustee, a body politic, or an individual.

WHAT DO YOU DO IF THINGS GO WRONG? See Leigh Adams. He’ll explain that there are a number of ways forward and they can include the following: a) If you realise your registration has a defect or you have not registered in time, then we will probably recommend a remedial registration as soon as possible. However, the registration may have missed some deadlines and it may be exposed to vesting and priority risks. b) We may recommend that you apply to Court seeking an order extending the time to register (s588 FM of the Corporations Act). c) If PMSI registration is out of time, it might be appropriate to seek an extension of time under s 293 of the PPSA. d) We may also recommend that you seek priority agreements or releases with other grantees which may have registered beforehand. The PPSA is a good servant but a bad master. We can help it work for you and not get the upper hand.

Disaster 10 Failing to act on good advice when you need to. One company waited 33 days to register after they became aware of the need to. The Court disallowed their efforts because they failed to act “as soon as practicable”.

*Leigh Adams Special Counsel Owen Hodge Lawyers T: +61 2 9570 7844 F: +61 2 9570 9021 E: LWA@owenhodge.com.au www.owenhodge.com.au

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

PPSA

The risks of getting PPSR wrong aren’t worth it By Ian Hadwen*

Ian Hadwen

January 2019 marks the seventh anniversary of the Personal Property Security Register (PPSR) commencing in Australia. For many businesses, this milestone means it’s time to determine whether existing registrations need to be renewed. But registering and maintaining registrations on the PPSR is so easy to get wrong and the risks, both financial and reputational, of having incorrect PPS registrations, or worse no registrations at all, can be dire for businesses, particularly SMEs. In light of this, it’s important that businesses start to think now about how they’ll approach the renewal process when the time comes. The good news is, the beginning of the renewal process is a perfect time for businesses of all sizes to do a hygiene check on their existing customers and PPS registrations, and implement a smart, fast and simple process that will ensure their PPS registrations are renewed correctly.

The current state of play The PPSR is a national online register that allows businesses to register their interests in goods or personal property that they have sold on terms or leased to a customer. The PPSR makes it easier for businesses to protect their security interests and recover goods, or the value of goods, from customers who become insolvent. The PPSR was introduced in January 2012, so it has been in effect for nearly seven years (although the ‘grace period’ extended by the government lasted for two years until 2014). Whilst the term for each registration is different, many businesses applied a seven-year term when first registering their security interests, which means these will be up for renewal in early 2019. 2018 is therefore a crucial time for businesses to understand how to renew existing registrations and ensure that these are, in fact, renewed correctly.

The PPSR makes it easier for businesses to protect their security interests and recover goods, or the value of goods, from customers who become insolvent.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

PPSA

Why is the PPSR so important to get right? Many businesses, particularly SMEs, are still not aware of the register, the legislation behind it, or the consequences of not having registered their interest in goods if they need to recover assets from a customer who has gone bust. Equally, those who have registered their security interests incorrectly could find themselves in the same situation as a business who has not registered at all. Incredibly, PPSR reviews performed by EDX revealed that 80% of businesses are registering incorrectly1. These businesses are putting themselves at real risk, given every year in Australia more than 25,000 businesses become insolvent. Customers defaulting on their payments or becoming insolvent is a serious issue for any business, but it often adversely effects SMEs more

than larger organisations, drying up their cash flow and leaving them in danger of going bust themselves.

What can businesses do to prepare for PPSR renewals? Understanding your existing PPS registrations and customers is important, as it will help inform how you approach the PPSR renewal process. Consider these three tips: Tip #1 – Check the accuracy of your registrations. Many businesses may not realise that they have incorrect registrations that, if tested, would not hold up in court. Maximise the protection of your property by ensuring existing registrations are correct and enforceable before renewing. Tip #2 – Check the status of your creditors. Are your creditors financially viable,

or are they deemed high risk? Don’t let a customer’s insolvency impact your bottom line – check their status to avoid any expensive surprises. Tip #3 – Clean up your data. Ensure your customer database is up-to-date so that you can register your interests against the company that has hired your assets correctly. Registering on the PPSR can be complex. But with the right advice, the PPSR can protect your assets if your customer becomes insolvent.

*Ian Hadwen General Manager – Commercial Solutions T: 02 9278 7762 E: ian.hadwen@equifax.com FOOTNOTES: 1 Based on assurance reviews conducted from 2012 to 2017 by EDX

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

Debt Collection

The collections ethos By Paul Burgess*

Paul Burgess

Rule #1: Don’t collect for today, collect for tomorrow. Do we worry about what we have to collect today? Of course we do. However, let’s think about today as the result of work we did six months ago. Let’s say we have $100 to collect today. We have a name, a phone number and a legitimate reason to collect this $100. Is this phone call a collections call or is it another opportunity to connect with the debtor? When you think of the future you no longer think collections. You no longer think ‘I need to get this $100 paid. I need to get a promise, an arrangement, a part payment etc’. What this call becomes is a relationship building exercise with the debtor that allows them the freedom to pay you $100 today, and then on time for the next six months (although you can substitute any time period here). I remember working with a lady way back when I first starting collecting five year old NAB credit card debt. She had the best collections figures of anyone in the company, but she was never in competition with anyone. Many other collectors tried to reach the kind of successes she enjoyed, worked their ledgers harder, being more insistent on payment now, higher upfront good faith payments, shorter arrangements. But the harder they tried the greater the deficit. I watched this dance for some time, wondering about the differences.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

I saw this lady come to work, happily say hello to everyone, sit down, pick up a phone and collect debt that was previously deemed uncollectable. How did she do it? I asked myself that every day for weeks. On one occasion, I watched her sing “Happy Birthday” to someone on the other end of the phone, talk about their family, their situation, ask how her husband was feeling and if her eldest son made the soccer team. It was only the second time she had spoken to this debtor. The result? Payment of the account in full. Yes it took two calls, but this was a live account and at the end she received a thank you and the bank kept the customer. Thinking about it in psychological terms, what she did better than anyone else was remove the opponent and replace with a partner. She removed herself from the fight and became the support, the aid. The debtor was no longer paying a debt collector, no longer paying ‘the enemy’, but was working with a ‘friend’ to get back into terms. Working with a person as opposed to against a company. It is a vast difference in thinking. I applied my own version of this ethos, using my own strengths of course. But the result was in fact the same. I started getting noticed for my increasing successes. I was promoted several times moving from old debt to current debt. I enjoyed hitting the bonus levels (and the

Debt Collection

cash that came with it helped the celebrations as well). One of the things I employed was my ability to see at the conceptual level. That is, to read the debtor’s file and pick out pieces of information that gave me a sense of who the person was, an ability to get a picture of who I was dealing with. By the time I picked up the phone to speak to the debtor for the first time, I was already well down the road to building the relationship. I could ask directed questions, discuss topics that the debtor cares about, have a real conversation. Having that real conversation brings into play all of the skills we learn about listening and empathy.

I find it helpful to find something that makes me connect to the debtor, in a way that is real. This will comes across in the conversation and make the transition from adversary to supporter that much easier. This conversation type is not a today conversation, but building a relationship that will allow for collections in the future. Most organisations have some form of credit, from a simple collectout-of-terms-debt to a full function credit department. In all environments, it is the collections ethos that will drive success and have the added benefit of creating a longer buying customer. It takes from the cure and gives to the prevention. It balances the effort.

The collections ethos feeds into the credit function being perceived as a profit centre and not the traditional cost centre. It is this ‘after sales service’ approach that changes the playing field. This prevention as opposed to cure. It can support the notion that the credit department can be a source of competitive advantage through brand strengthening and adding value through supporting customer loyalty. Don’t collect for today, collect for tomorrow.

*Paul Burgess BBusCom CPA FIML MICM CDec Qld National Credit Manager Steelforce Australia Pty Ltd

When you think of the future you no longer think collections. You no longer think ‘I need to get this $100 paid. I need to get a promise, an arrangement, a part payment etc’.

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Training News How to identify skill gaps in your employees to ensure your training budget spend has a positive impact Workplace training is an extremely important activity for your team, especially if you feel there is a particular skill gap that this training will address. Every business has a budget preparation period and it’s during this process that managers need to plan and obtain approval for the training spend. Another factor to consider is if you have a certain time of the year where you schedule in training, you may be looking at what sorts of training sessions would be most beneficial and work best with the team. This is the perfect time to see whether you can identify any skills gaps in your team and make sure that you organise training with the Australian Institute of Credit Management to address any skills and knowledge gaps. In this article we explain a number of the best ways to determine if your employees have a gap in their knowledge, so you can arrange the most suitable training to help get these skill gaps addressed and ensure the team is working to industry best practice.

Identify the Skills: If you haven’t already, now is the perfect time to sit down and really think about the skills your team need to demonstrate best practice. This may be very different for each member of your team, depending on what their job role entails. For example team members in support roles will certainly have a different skills-set requirement to those who are customer facing. It is very important to consider each staff members specific needs, based on their role within the organisation. Make sure that you draw up a skills list that you expect each staff member to have. You may want to sit down with their direct line manager to make sure that you are gathering an accurate representation of how staff in your workplace are expected to act and how their role relates to your business processes. Taking time to document what you need from team members, will simplify the review process and highlight where there is a skill gap that requires

One way to see if the team is performing is to gather feedback from internal and external stakeholders that they interact with each day. 40

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

addressing. Gaps in knowledge could be because: zz you have just realised training is required in a certain area, zz team members not properly understanding their job role, or zz team members who have recently moved job roles and have not received all the required training. For any of these outcomes, you need to decide on the skills you require, so identifying the gaps should be relatively easy, and you can start booking the relevant AICM training immediately to address the gaps.

Ask Around: One way to see if the team is performing is to gather feedback from internal and external stakeholders that they interact with each day. This can deliver a wealth of knowledge in relation to obtaining clarity on how the team performs their regular functions on a day to day basis. If your team are in a customer facing role, it’s imperative to offer customers the ability to provide feedback on the service they receive. The output of this feedback means you can identify what the team are doing well and celebrate these wins plus any skill gaps will be highlighted and training scheduled. While obtaining this feedback may be time consuming and sometimes difficult to obtain (there is no way of making a customer provide feedback) being in receipt of the data ensures you are able to make an informed decision.

aicm Training News stages of identifying a customer problem with a payment issue, it’s important that your staff know how you expect them to undertake their role, and a practical test enables you to see where additional training would assist.

Short Written Test or Group Question and Answers:

Another way to obtain feedback can be to ask colleagues who work with and also around your team. You can do this by asking colleagues to complete anonymous 360 degrees feedback forms. A 360 degree feedback is a method and tool that provides each employee the opportunity to receive performance feedback from their managers, peers and direct reports plus customers. It also provides an opportunity for managers and individuals to understand how their effectiveness as an employee is viewed by others. This form of feedback collation is designed to evaluate an employee’s performance from all sides. Create questions in the questionnaire that apply to the sorts of skills expected of the team from which you will identify the skill gaps that require addressing. Questions are typically answered in the form of a numbered scale, so you can easily tabulate and compare those from many different sources, and identify the priorities. Finally, ask the staff directly! Some people may be very aware that there is a gap in their knowledge that is affecting their work life, and are very keen to obtain further training to address the issue. If many of

your team have similar answers, you can be sure that booking a training course around that gap is a very wise decision. This may not work for all skills required in your workplace, however, if you have a particular skill that you can easily test, it may be the best way to see how your team are performing. There are several ways in which to do this.

Role Play: If you want to see how your team are performing when interacting with customers, such as answering customer enquiries over the phone, conducting role plays may be the best way to get a general idea. While your staff may be on their best behaviour if they know they are being assessed, it will still provide you with a good indication if they are asking all the right questions, or if they know how to deal with certain problems in the correct way.

Practical Test: This is similar to a role play and is a great way to see if team members are able to carry out the tasks you expect them to undertake within the workplace. Whether it is filling in a document a certain way or the

This is an excellent method to test your team on their knowledge of your company’s procedures, on how to undertake tasks. This will allow you to quickly and clearly identify where gaps in their knowledge are evident. It could be a question on how they would deal with a new customer, or how they deal with a customer complaint, so you can identify if there are any pieces of the company procedures that they feel are unclear, or they do not understand. Now you have a better idea of where the knowledge gaps lie within your team and this gives you the structure to start discussing and booking the relevant training to ensure the team all have the required minimum skill set. Taking the time to recognise skill gaps is an excellent exercise, as it demonstrates to both the team and your manager that you are providing relevant training for your staff, and not just what you assume they need as sometimes personalities can cloud judgement. This review also helps reinforce with your team that they are valued and you are keen to equip them with the skills that will improve their output at work which will increase their job satisfaction and that you are not just providing training for the sake of training. For the best results, make sure your repeat this review exercise regularly, and if you do identify any skill gaps, you address before they become a critical issue.

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

aicm Training News Recent graduates FNS51515 Diploma of Credit Management

In-House Training

Josephine Toliniu – NSW Jackie Hutson – NSW

Brisbane City Council

Statement of Attainments Angelina Upham

NSW

FNSICGEN301B Communicate in the workplace

Anja Bonnard

BSBCUS501 Manage quality customer service

Chenoa Nichol

NSW

FNSRSK401 Implement risk management strategies

Anja Bonnard

BSBCNV506 Establish and manage a trust account

Anja Bonnard

BSBMGT502 Manage people performance

Robert Chandra

VIC

BSBCNV506 Establish and manage a trust account

Terence Costa

NSW

FNSCRD501 Respond to personal insolvency situations

July to December 2018 Face to Face Training Calendar – Melbourne, Brisbane and Sydney Melbourne:

Sydney:

19th July – Corporate Insolvency (C,D) 20th July – Dealing with Customers (E,4) 22nd & 23rd August – Manage Factoring and Invoice Discounting (E,D) 24th August – Assess credit applications (C,4) 15th October – Manage risk (C,D) 16th October – Resolve disputes (C,4) 23rd October – Credit Toolbox Series 1 – Fundamentals of Credit 8th November – Credit Toolbox Series 2 – Collect with Confidence 15th November – Establish and maintain appropriate security (C,4) 16th & 17th November – Manage Factoring and Invoice Discounting (E,D) 20th November – Credit Toolbox Series 3 – Understanding Credit Risk 4th & 5th December – Legal Compliance (C,4,D)

12th July – Corporate Insolvency (C,D) 13th July – Telephone Collection Techniques (C,4) 15th & 16th August – Manage Factoring and Invoice Discounting (E,D) 17th August – Assess credit applications (C,4) 18th September – Credit Toolbox Series 1 – Fundamentals of Credit 25th October – Manage risk (C,D) 26th October – Resolve disputes (C,4) 14th November – Credit Toolbox Series 2 – Collect with Confidence 21st November – Credit Toolbox Series 3 – Understanding Credit Risk 22nd November – Establish and maintain appropriate security (C,4) 23rd & 24th November – Manage Factoring and Invoice Discounting (E,D) 19th & 20th December – Legal Compliance (C,4,D)

Brisbane:

Table of Explanation:

5th July – Corporate Insolvency (C,D) 6th July – Telephone Collection Techniques (C,4) 8th & 9th August – Manage Factoring and Invoice Discounting (E,D) 10th August – Assess credit applications (C,4) 9th October – Manage risk (C,D) 10th October – Resolve disputes (C,4) 12th October – Credit Toolbox Series 1 – Fundamentals of Credit 8th November – Establish and maintain appropriate security (C,4) 9th & 10th November – Manage Factoring and Invoice Discounting (E,D) 13th November – Credit Toolbox Series 2 – Collect with Confidence 21st November – Credit Toolbox Series 3 – Understanding Credit Risk 11th & 12th December – Legal Compliance (C,4,D)

C = Core Unit, E = Elective Unit, D = Diploma, 4 = Certificate IV

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

To speak to AICM about these or any other learning or development, call 1300 560 996 or email andrew@aicm.com.au or debby@aicm.com.au

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Kuhlekt: Get better debtor management

Kuhlekt_AICM Ad.qxp_Layout 1 9/5/18 10:40 am

Introduction Kuhlekt, is a credit collections and dispute management system that is delivered on a scalable, SAAS platform. It is designed to suit global, national and state-wide organisations and capable of meeting the demands made by business today. Kuhlekt is the result of a collaboration between two very different but similarly minded professionals. It was designed by Ian Hindle, a consulting credit manager and developed by Paul O’Brien, an IT professional who has worked for Fortune 500 companies creating secure software. One size does not fit all when it comes to the business of debtor management, so they created an application that is both flexible, universal and importantly, affordable. Features and Benefits By using Kuhlekt, your collections activity and dispute resolutions are managed through user-defined strategic processes, workflows and regional user assignments. This ensures that the regional data assigned to your users is available to be viewed securely and will deliver results whilst taking into consideration the relationship you have with your clients. The accounts and performances of all credit, sales and operations personnel and their managers is transparent and made accountable through the dashboards, workflows and reporting. Measurement and analytics play a significant role in business and Kuhlekt provides a complete suite of advanced and refined reporting systems that can search, categorise and summarise data through the proprietary data tables. Kuhlekt can be configured with many user profiles which means access, for each, can be customised by the region’s administrator to suit the organisation. Kuhlekt can manage regions, add or delete users and change user’s security level assignments as the business changes and grows. Kuhlekt will fully manage your daily, debt provisioning and impairment so gone are the periodic, painstaking preparation of figures for accruals by the accountants – simply extract the accrual reports from Kuhlekt whenever you need them.

As dispute resolution has become more prevalent in business, Kuhlekt has developed a process that deals with the issue fluently. It is driven by real time workflows and based on a delegation-ofauthority table that ensures it reaches the right people for approval and processing. This is fully integrated within Kuhlekt so the strategy for collection either omits or highlights the disputed items in the debtor’s communications according to your preferred setup. A significant feature of Kuhlekt is its ability to operate without the need for your teams to run any other email clients – Kuhlekt manages it all. Create emails from the four debtor interaction points, all incoming emails are automatically filed to the correct account and user notified. It can assign unmatched emails to a staff member for re-allocation to an account for the collector to action. Dashboard notifications are supported with icon notifications of unread mail. Kuhlekt retains 100% of all interactions and emails, meeting both internal and external audit objectives as well as Sarbanes Oxley requirements. Ian and Paul have developed an application that delivers a secure, responsive and reliable solution for debtor management. It is billed on a tiered, monthly basis and by subscription with the top tier set at $150.00 AUD and a moderate additional cost for broader business integration users. Kuhlekt does not have a contracted term and only requires 30 days notice to exit making us fully accountable to our users. To become operational, Kuhlekt uploads your data from the ERP automatically or manually, as required. We provide complete support throughout the setup and can have it completed within a week ready for operation. There are many more features and benefits available to you by using Kuhlekt and a demonstration is the best way to see them. Kuhlekt provide a fully interactive demonstration by going to; www.kuhlekt. com and take “Try the Demo” or email Kuhlekt at; enquiries@kuhlekt.com Alternatively call Ian on +61 0412 086 125 and he will explain and show you the features onsite or via WebEx.

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credit collections + dispute resolution A management tool that drives a cohesive approach from all teams in delivering results and minimising bad debt and customer frustration.

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Contact Kuhlekt now to receive a 33% discount for the first 6 months on subscriptions.Quote AICM1 Email: enquiries@kuhlekt.com Telephone: +61 412 086 125

Unlock the potential in your credit career credit staff

Consider an AICM Qualification course If you aspire to achieve greater heights in your credit career or want to get the best from your credit staff, then a qualification course can help you achieve your targets. Offered nation wide, you can study in your own time (24/7), with support available. If you have industry experience or prior education, you may be eligible for Recognition of Prior Learning (RPL) credits to fast-track your qualification. If youâ&#x20AC;&#x2122;re an employer, you may qualify for a training grant. Talk to AICM today to discover your course options.

Diploma of Credit Management

Certificate IV in Credit Management

Certificate III in Mercantile Agents

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.

Take the first step to a better career & talk to AICM today

Call 1300 560 996 or vist aicm.com.au

New South Wales AROUND THE STATES

Attendees at the NSW Credit Symposium.

Dan Rappoport and Geoffrey McDonald in full swing at the Credit Symposium.

Elisha, Aaron and Roberta Magee with the inaugural Colin Magee Cup.

Credit Symposium

NSW Annual Golf Day

February 22 saw NSW hold another extremely professionally organised and well attended Symposium. With yet another busy period of insolvency law reforms and some very interesting case law Geoffrey “Helping the People” McDonald did another excellent job of providing a thorough overview of all things credit law! Geoff’s ability to cut through to the real issues and make the data relevant to a credit professonal’s daily work load meant that from the newly commenced team member to the seasoned veterans in the room, everything was covered, noted and most importantly understood. The timing of Geoff’s very recent and hugely successful preferential payments case was perfect and we were all treated to an in depth run through of a Supreme Court case that ended in a win for the good guys and an important take away for us all on the timing of a company’s insolvency. This year Geoff was joined by Daniel Rappoport, Senior Associate of Gavin Parsons & Associates. Geoff and Daniel tag teamed their way through everything from Ipso Facto clauses and new developments such as Safe Harbour and Privacy as well as eligible data breaches to new proposals Bankruptcy Amendment (Enterprise Incentives) Bill 2017. We all enjoyed and learned a great deal before resting the brain with some well earned networking.

AICM NSW held its Annual Golf day on Thursday the 19th of April, this was the Inaugural Colin Magee Cup which commemorated the late NSW AICM President who passed away last year. Colin was a self-described hacker and despite his questionable technique, always made a great playing partner at any golf day thanks to his love of life, the AICM, his family and of course his beloved St George Dragons who just so happen to be leading the competition this year. Colin was most certainly there in spirit on a perfect autumn day keeping the forecast showers at bay and everyone dry. Colin’s wife Roberta (aka Bert), daughter Elisha and son Aaron were there to present the Cup to the winners. This was also the first time the NSW Golf day was held at Ryde Parramatta Golf Club instead of the traditional Oatlands and our hosts did not disappoint with the course in pristine condition apart from a few mosquitoes speeding up the putting. The day went smoothly with close to 80 players turning out to compete in what was a hard-fought competition. Results for the day were: zz 1st – Kessler represented by Ryan Butcher, David Benyon, Sama Farahar and Ryan Crow zz 2nd – Matthews Folbigg represented by Jeffrey Brown, Darrin Mitchell, Phil Bamford and Trent McMillen

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

New South Wales

A fantastic turnout for the 5th Annual NSW Golf Day and the inaugural Colin Magee Cup.

ARMA team: Eddie Smith, Jonathan Kamleitner and David Jovanov.

Toyota team: David Chard, Graham Ford, Geoff Noble and Justin Cumines.

Equifax team: James O’Connell, Andrew Castledine, Zac Warby and Michael Ng.

Jirsch Sutherland: Ryan Tyson, Andrew Spring, Peter Aked and Grant Morris.

zz 3rd – Commercial Credit Services represented by Jarryd Van Poppel, Aaron Van Poppel, Dave Wells and Andrew Sutton zz Clubhead speed was won by Eddie Smith of ARMA with a speed of 267kmh. Dean Young second with 229 kmh and Ryan Butcher 3rd with 220kmh. zz Longest drive had two winners with Eddie Smith taking out

hole # 1 and John Flemming on hole 18. zz Straightest Drive was Graham Ford on hole 9. zz Drive & Pitch was Bora Dincel on hole 14. zz Nearest to the Pins went to Trent McMillet and Ian Markus This year marked the 5th year since the NSW Golf Day returned to the calendar and our naming day sponsors ARMA Recoveries and Creditorwatch have also remained for the 5 years as well.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

New South Wales AROUND THE STATES

BBW team: Ian Markus, Bora Dincel, Balveen Saini, Leon Zheng and Luis Ormazabel.

Sharp & Carter team: Nial Hoolahan, Taha Sayed, Hunter Clavan and Jackson Lindsay-Egan.

Commercial Credit Solutions team: Aaron Van Poppel, Andrew Sutton, Dave Wells and Jarryd Van Poppel.

Debt Sale Brokers Australia team: Michael Muir, Andrew Zell, David Debono and Adam Dayeian.

Co-organiser Andrew Smith of ARMA surveys the pre tee off competition.

TIMG team: James Stanworth, Bryan Kim, Chris Gavathas, Danny Jeong and Dion Slabber.

There were also many other supporting sponsors some of whom have been with us since inception over the 5 years and without them the day would not have been possible, so thank you to the following sponsors: zz ARMA zz Austral zz Commercial Credit Services

zz Creditorwatch zz Debt Sale Brokers zz Equifax zz Force Legal zz Jirsch Sutherland zz Matthews Folbigg zz Prasidium Trade Credit Insurance

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

New South Wales

Equifax team: John Flemming, Heather Patullo, Alastair Hewson and Gary Forrest.

Creditorwatch hole: Patrick Coghlan, Adam Mercurio and Thomas Arcardi.

The Australian Institute of Credit Management welcomes our Partners for 2018. National Partners

Kessler team: Ryan Crow, Samuel Farahar, David Benyon and Ryan Butcher.

Divisional Partners

Official Division Supporting Sponsors

Wise McGrath team: Kyle Gray, Joe Khaye, Craig Worsley and Dean Young.

zz TIMG zz Turks Legal zz Wise McGrath Special thanks to the organizing committee Andrew Smith ARMA, Chris Hayes ECS, Balveen Sani AICM NSW President and Patrick Coghlan Creditorwatch. There are almost 100 photos at the golf and could only include a sample in the magazine. For more photos of the teams and event please click here. 48

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

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.

Queensland AROUND THE STATES

Stacey Woodward, Mark Harley, Decia Guttormsen.

Legal and Credit Symposium Thank you to all of the AICM members, guests and distinguished speakers that joined us for the first half day Legal and Credit Symposium for 2018. We heard from distinguished speakers in law and accounting about legislative changes and developments about greater creditors’ rights to request information from liquidators, proposed phoenix law changes, new privacy laws and safe harbour and ipso facto laws. Many attendees described the event as fun, informative and thought provoking, as well as, of course, educational and relevant. The event is a great way for members to stay on top of legislative changes and developments in law, and of course, obtain 3 CCE points for the year. – Stacey Woodward, Publications

Mark Harley and Nicholas Bryce.

The Australian Institute of Credit Management welcomes our Partners for 2018. National Partners

Divisional Partners

Official Division Supporting Sponsors

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.

Ray Marshall and Mark Harley.

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

South Australia The Essential Insolvency Update The South Australian Division held an informative and wellreceived session on 12 April 2018. Courtney McDonald, a solicitor at Lynch Meyer Lawyers, provided an insight into a number of topical matters that included; zz how to protect your rights if a customer experiences an insolvency event; zz responding to preference demands and what information should and should NOT be provided zz to the liquidator; zz the interaction of the PPSA with Voluntary Administration; and zz the preference regime (including how T&Cs can critically assist). Attendees came from various businesses – both front-end and back-end credit roles. Courtney provided practical tips and traps with many take home points that can be implemented to deal with the flow on effects of insolvency. This event was well-attended and there were many discussions and ideas shared amongst all. Thank you for presenting Courtney, it was greatly appreciated. – Alice Carter

Courtney McDonald – speaker at the Essential Insolvency Update event.

Sponsor in the spotlight

Nick Cooper of Worrells The Australian Institute of Credit Management welcomes our Partners for 2018. National Partners

Divisional Partners

Official Division Supporting Sponsors

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Nick is a valued member of our council and stanch supporter of the AICM Position at employer: Partner Time with employer: Yulia Petrenko and I established Worrells in Adelaide in February 2014 Family: I am married, with an 18 month-old boy (David) and a girl (to be named) due later this month Activities outside of work: Fishing – particularly for tuna and snapper, wine-tasting, dining. All in plentiful supply on Kangaroo Island! Music taste: Both kinds – Country and Western Movies or books: Movies Dogs or cats: We have aquarium fish as our pets and our beloved pet parrot Rocky Favourite holiday destination: Tahiti – so remote and beautiful AFL or Rugby: AFL – Adelaide Crows. A disappointed supporter after last year’s grand final effort An achievement you are proud about since being with Worrells: Growing a firm from the 2 of us operating from a small apartment to 12 staff 4 years later Fun fact people may not know about you: I‘m a legal officer in the Navy Reserve. I’m sure there’s a quote from “A Few Good Men” to add?

Victoria/Tasmania AROUND THE STATES

Another sold out Victorian Golf day.

Atradius team: Bill Famelos, Enzo Amato, Leonardo Pecorella and Terry Callaghan.

Sharp & Carter team: Daniel Close, Johnny Koutrigaros, Sam Cust and Chris Belegrinos.

President’s Report

2018 Vic/Tas Annual golf day

On International Women’s day 8th March the Vic/Tas council elected me as President of the Victorian and Tasmanian division. I am honoured by the elevation from Vice President to President. Over the last two months I have been working closely with the AICM office and council on number of events. The most recent event is the Women in Credit Luncheon that will be held on the 11th May at the RACV club for Victoria and the event was a sell-out. We are looking forward to our guest speaker Linda Murray and our charity this year is Pink Hope. Victorian councillors were able to review the proposed changes to our constitution and stand proud to see that we embrace more gender diversity at the board level in the future. It was good to see that this was also shared with our members prior to finalising the changes as we value your say. Our annual Golf day was another great success at full capacity and we thank all our sponsors for the continuous drive to make this day memorable and fun. Now for a major announcement for the YCPA event this year partnering again with illion we have locked in the venue at Zagame (Ferrari Maserati). The location of this event will be extraordinary and not to be missed, therefore keep the 27th of July 2018 free. Thank you for the support of immediate past president and now director Lou Caldararo who has assisted me in transitioning into my new role and I look forward to working with Lou, the Vic/Tas division councillors and members.

Come one and come all! The AICM Vic/Tas Annual Golf Day held on Friday 23 February 2018 was another sell-out event this year. A great time of year to be sporting the fairways as the weather gods smiled upon us again providing a gorgeous sunny day for the event. As usual the Best Call Ambrose Competition which kicked off 11:00am at Southern Golf Club in Keysborough. Practice at the putting greens and some shenanigans at the practice nets ensued before members and guests indulged in a delicious Barbeque Lunch sponsored by ALM, with Steak and Sausages supplied by Centreway Steak House in Keilor, and salads prepared and served by Southern Golf Club. The course was in great condition with the greens running a fairly quick pace. A shot gun start had the players away at about 12:45pm, finishing with the usual 2-course dinner and presentation.

– Sherif Hussein Vic/Tas State President

Results Winners: Andrew Goldfinch, Lee Hall, Gavin Patrick and Peter Scott with a Handicap of 9.25 and final score of 55.75 had a pretty good day on the course. Runners Up: Rod Brown, Peter Ryan, Steven Nasssios, and Sam La with a handicap of 8.5 and a final score of 57.5. Third Place: Steve Stafford, Aaron Grigg, Oliver Hayward, and Liam Denver with a handicap of 8.125 and final score of 57.875. Fourth Place: Joe Losinno, Mick Elias, Clay Gunderson, and Roy Panoythis with a handicap of 10 and a final score of 58. Steve, Sam, Dean, and Joyce with a handicap of 10.5 and final score of 74.5. May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

Victoria/Tasmania

QBE team: Nick Jonas, Patricia Brown, Mac Hill and Steve Kay.

CreditorWatch and ARMA colleagues: Michelle Dichmann, Alex Kaiserman, Borna Boltuzic, Jason Sutherlin, James Smith, Andrew Smith, Colin Porter and Gordon Porter.

Foremans team: Emily Purcell, Daniel Sizer, Mahlee Terrell and Glenn Bushett.

ARMA team: Andrew Smith, Greg Young, James Smith and Nunzio Settinelli.

A very huge thank you also goes to our prize sponsors for winners, runners-up, NAGA, nearest the pin, hole in one, longest drive, straightest drive sponsors (in no particular order): –– –– –– –– –– –– –– –– –– –– –– –– –– –– ––

Brooke Bird ARMA PCI Partners QBE Atradius Melbourne Parkview Hotel Kemps Mercantile Turks Legal Mercantile CPA Sharp & Carter Rodwells Doncaster Volkswagen Euler RMS Rodgers Reidy

–– –– –– –– –– –– –– –– –– –– –– –– –– ––

ARL AMPAC Cor Cordis Foremans Business Services Mason Black Lawyers SLF Lawyers Equifax Australia Bingmail Equifax Australia Creditor Watch SV Partners Scotpac Austral Mercantile SPK Glass and Aluminium

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Kemps Peterson team: Oliver Haywood, Liam Denvor, Steve Stafford and Aaron Grigg.

Our other winners on the day were: zz Nearest the Pin 12th Hole: Brett Caare 92cm, zz Nearest the Pin 16th Hole Andrew Goldfinch 23cm, zz Longest Drive for Men 17th Hole: Mark Wenn, zz Longest Drive for Men 7th Hole: Joe Losinno, zz Longest Drive for Ladies 4th Hole: Joyce Gin, zz Longest Drive for Ladies 13th Hole: Chris Alclin, and zz Straightest Drive 1st Hole: Joint winners Lee Hall and Rod Nelson 0cm. Now it is time to thank our sponsors. Our members should be advised of the immense contribution our event sponsors make to not only bring this event to you at a reasonable cost, but for the participants to experience an outstanding networking opportunity in a superb environment, which results in everyone coming away with at least one prize for the day. Without these magnificent event sponsors the day would simply not be possible, least of all enjoyable.

Victoria/Tasmania

Rodgers Reidy team: Meg Sullivan, Brodie Hilet, Graeme Scott and Neil Mclean.

Creditor Watch team: Jason Sutherlin, Bez Navaro, Natalie Sherriff and Peter Kerlin.

Mercantile CPA team: Mark Spencer, Sunny Sun, Glenn Watkins and Wade Bekeski.

Therefore our most gracious thanks goes to: zz SLF Lawyers being Name Day Sponsors, zz our Dinner Sponsors Scotpac, and zz Lunch Sponsors Mills Oakley Lawyers. Special thanks also goes to those who very generously donated further to our Business Card Draw Brooke Bird, Ampac, Parkview Hotel, Kemps Petersons, Australian Paper, AMEX, Creditor Watch, Sharp and Carter, Scotch Pacific, SLF Lawyers, Turks Legal, Fuchs Oil, Randstan, Mercantile CPA, and Bingmail and to Imagebox Group for donating the printing services for the day. It was a most enjoyable day, as it generally is. Warmest thanks to all the members and guests who participated on the day, thank you for supporting the AICM by your attendance at the event. Thank again to our sponsors for your invaluable support. We cannot thank you all enough for your generosity, participation and support of the AICM. Special thanks to Lou Caldararo from (Spicers and AICM Vic/Tas President) for outdoing himself again this year and organising yet another fabulous and successful golf day. If you missed out this time and wish to attend the 2019 golf days please express your interest to Lou Caldararo via email to Lou.Caldararo@spicers.com.au as soon as possible as 2019 is almost sold out already, which is a testament to the immense popularity and success of the annual AICM Vic/Tas Golf day. We took over 100 photos at the golf and could only include a sample in the magazine. For more photos of the teams and event please click here.

AROUND THE STATES

AMPAC team: Stephen Moloney, Andrew Worrell and Mario Rukavina.

Gareth Brodie, director of White Cleland presenting at Going Paperless.

Going Paperless - Networking Event On Thursday 19 April 2018, at the offices of Sharp & Carter in the Melbourne CBD, Gareth Brodie, director of White Cleland, delivered a very interesting, engaging and relevant paper on electronic document management processes and strategies as they apply to the credit management process. Gareth lent us his knowledge and expertise from his practice in commercial litigation and dispute resolution since 2006. He clearly demonstrated the wealth of experience and knowledge he has in all aspects of debt recovery and insolvency and practices in the Federal, Supreme, County and Magistrates’ Courts and VCAT by delivering such an educational paper. May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

Victoria/Tasmania

Members and Guests at Electronic Signatures Breakfast.

Frank Gambera presents on Electronic Signatures.

Ralph Ziccarello, MahleeTyrell, Frank Gambera and Carol McTavish.

Using Electronic Signatures - Pitfalls and How to Avoid Them

Shirley Wells Huon Aquaculture Company Pty Ltd, Suzanne Lucas Horticultural & Landscape Supplies, Leigh Garth Bennetts Petroleum attend Vic Network Breakfast via Teleconference from Tasmania.

The intimate group of participants thoroughly enjoyed the session and said that it was extremely informative. Many walked away talking about how the information that Gareth delivered changed their perspective on the electronic storage of documents and that as a result of attending the seminar they would review their whole document storage policy. The seminar considered whether, and which, typical credit management documents are suitable for electronic storage, evidential considerations that typically arise in court proceedings, and best practice for your document storage processes. Thank you to Gareth for donating your time to the AICM, your presentation was well received and we appreciate your contribution. Thank you also to Sharp & Carter for sponsoring the event and providing the venue and the catering. Without great presenters donating their time and great sponsors donating their premises and facilities we could not provide these great events, and we want you to know how much we value your continued support. If you missed out and are interested in a re-run of the presentation please email our Professional Development Chair Mahlee Terrell MTerrell@foremans.com.au. – Sherif Hussein 54

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Approximately 30 members and guests attended the Vic/Tas Network Breakfast on Wednesday 7 March 2018 at the Park View Hotel on St Kilda Road, Melbourne, and we experienced our first Phone-In Attendance from our Tasmanian counterparts who attended the event via Teleconference. It was a very well attended and received event. Frank Gambera, an experienced lawyer from McMahon Fearnley Lawyers, delivered an excellent paper and discussed recent court cases that highlight electronic signature pitfalls. The presentation was engaging and informative and provided credit professionals with everything they need to know about using e-signatures, the safety measures they should put in place and the practical tips for best practice. Frank advised the many benefits of using e-signatures including enhancing contract speeds, streamlining processes and reducing costs but as automated online approvals processes is a standard service of credit operations, but with that, how important it is to understanding how e-signatures affect the validity of contracts, credit applications and personal guarantees. Whilst using an e-signature seems uncomplicated and simple, it is critical for credit professionals to understand what can go wrong. The validity of an e-signature should not be assumed without adequate confirmation. This could affect the enforceability of a contract, personal guarantees etc. Thank you Frank for donating your time for this presentation, the content was very relevant to our industry and we really appreciate your contribution. If you missed this presentation and would like it re-run later in the year please email our Professional Development Chair Mahlee Terrell at MTerrell@foremans.com.au.

Victoria/Tasmania AROUND THE STATES

SPONSOR IN THE SPOTLIGHT

Chris Belegrinos Meet Chris Belegrinos, Director with our State Sponsors Sharp & Carter. Chris has been with Sharp & Carter for 5 years. Chris isn’t married, but has a long time girlfriend who wants two kids, a boy and a girl. He loves AFL, NBA, playing golf and social poker. If he had to choose AFL or Rugby, he says he is AFL all the way! A huge Carlton fan, he has attended Chris Belegrinos every game this year, even though they are 0 from 4 with no signs of immediate improvement. Chris is also a die hard fan of the Minnesota Timberwolves in the NBA. When asked about Movies or Books, Chris says that he is a bit of a Star Wars and Lord of the Rings geek. He also loves TV Series like True Detective, The Wire and Narcos. His favour band is the Red Hot Chilli Peppers but he likes all genres of music including Rock, Hip Hop and World Music. He prefers dogs to cats. Becoming a partner at Sharp & Carter was a great personal achievement for Chris in July 2017. He is very proud to see the business grow from 7 staff to over 100 in five years A fun fact that most people don’t know about Chris is that he’s a bit ambidextrous. He plays Golf, Basketball, and throws left handed, he writes and plays pool right handed. He said he has no idea what went wrong. When you are next at an AICM event please introduce yourself to Chris and take some note of these interesting facts about Chris and hopefully you will have lots to talk about.

Sherif Hussein, Amaran Navaratnam, Donna Smith and Catrina Galanti at Amaran and Chaturika’s Wedding.

Congratulations Amaran A number of your council members were fortunate to be included in fellow councillor Amaran Navaratnam’s marriage to Chaturika on Saturday 24 March. The council wish Amaran and Chaturika many years of happiness together.

The Australian Institute of Credit Management welcomes our Partners for 2018. National Partners

INTRODUCING COUNCIL MEMBER

Mary Petreski Meet Mary Petreski, Credit Manager for the Commercial Team at Workwear Group. Mary joined the Vic/Tas council in 2017 and has been a very active member attending many of our events and assisting with organising our WINC Luncheons. Mary is a highly experienced and proficient National Credit Mary Petreski Manager, with over 15 years’ experience in the credit industry, now working for a Melbourne based company. With a business sales and marketing background, her career path changed when she took on the role of Accounts Receivable Manager in 2004. In joining the AICM Vic/Tas Committee, Mary hopes to further develop her skills and knowledge in the credit industry and to help in the development of the new and young credit professionals. Mary really enjoys being a mum, having a good laugh, cooking and reading leadership and motivational books.

Divisional Partners

Official Division Supporting Sponsors

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

Western Australia/Northern Territory

Full house at the March economic breakfast.

President’s Report

Lisa Marr with March breakfast presenter Alan Langford.

Alan Langford presenting at the March breakfast. 56

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

The year is flying along very briskly and the credit world follows. It has been more than 12 months since the WA election. The change in government has not gone unnoticed. Despite plenty of finger pointing, and the occasional backflip here and there on policy, the WA economy continues to move along. The WA Council takes this opportunity to thank Alan Langford from Bankwest for updating attendees of our Economic Update on how the state has been travelling since the election. Always informative, this year’s presentation was no different. This year saw an increase in numbers to the event, which pleased us greatly. It is a reassuring to know our event and the AICM brand remains strong. While the Economic Update was the highlight of the morning, the WA Members present joined in celebration of the elevation to Life Member of our friend and esteemed Councillor, Kevin Allen. Kevin has been part of the WA Credit Landscape for many years. His contribution to Council has been generous and for this we can never say thank you enough. This nomination, was universally applauded by Council and the AICM Board. It was a pleasure to present him with this award. As the middle of the year approaches, we look forward to meeting the youth that will take up our batons in years to come. The Young Credit Professional Award, is still very much a focus of the AICM. Nominations are open for any candidate under the age of 30 on June

Western Australia/NT AROUND THE STATES

30, 2018. Candidates do not need to be members of the AICM to apply. We welcome entrants from all industries to apply, with the view of what possibly could be the first step of an amazing journey. The closing date for all applications is 31 May 2018. We look forward to seeing as many of our Members at our next Breakfast Club. Please make sure you book your place for Carl Huxtables’ presentation on Director’s Safe Harbour. We are very excited to welcome him as a presenter to the WA Credit Community on May 16, 2018. In closing and before I forget: WA AICM has a new Facebook Page! It was mentioned briefly at the Economic Outlook. We will be posting more news, invitations and photos as they come to hand. We welcome your contributions as well. So like us at: WA-AICM Australian Institute of Credit Management. – Lisa Marr WA State President

Lisa Marr and Kevin Allen with his Life Membership.

The Australian Institute of Credit Management welcomes our Partners for 2018.

Economic update breakfast On 14 March the WA Credit Community welcomed Alan Langford, Bankwest Chief Economist, at a breakfast held at Matilda Bay restaurant. Alan delivered his annual economic update presentation which provided information on the economic performance of WA and the country over the last year and provided insights into the year ahead. It was an informative session, not only from a business perspective, but from a personal one as well.

Kevin Allen receives his Life Membership

National Partners

Divisional Partners

Kevin has been a member of the AICM since 1989 and has served on the WA Council for much of that time. Currently Kevin is chair of the sponsorship portfolio and has been instrumental in securing divisional partners for the WA division over the past few years. He has also assisted in maintaining existing relationships, both locally and nationally. In his time on council Kevin has organised numerous successful events in WA and has also been a driving force behind the establishment of the WINC events. His commitment to the AICM has contributed to the stability and success of the WA Division and he has helped to maintain the relevance of the Institute in modern times. Kevin is well known and respected throughout the credit community, not only in WA, but nationally. Kevin’s recognition as a life member is a richly deserved reward for his achievements for the Institute.

Official Division Supporting Sponsors

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

AROUND THE STATES

New Members The Institute welcomes the following credit professionals who were recently admitted to membership in March and April.

New South Wales

South Australia

Alex Sexton

Department of Human Services

Asanga Cooray

Department of Human Services

Andrew Spring

Jirsch Sutherland

Fiona Costello

Department of Human Services

Andrew Drapaniotis

Department of Human Services

Isabel Auld

Department of Human Services

Charlie Kurtonal

Findex

Teresa Lever

Department of Human Services

Christopher Maitland

Department of Human Services

Colin Jones

Department of Human Services

Hayden Brown

Department of Human Services

Henry McKenna

Jirsch Sutherland

Jade Mills Crowe

Horwath

Joshua Silvia

Department of Human Services

Karen Grant

Department of Human Services

Karen Lunn

Department of Human Services

Kathryn Trebley

epartment of Human Services

Michael Harnett

Department of Human Services

Nobin Scaria

Department of Human Services

Prabin Risal

Brother International (Aust) Pty Ltd

Queensland

Victoria/Tasmania Almamun Ashrafi

Department of Human Services

Anastasia Makrigiorgos

Equifax

Angela McCausland

Vulcan Steel Pty Ltd

Ben Te Wierik

Jirsch Sutherland

Bronwyn Wilkie

Mercedes Benz Financial Services

Catherine Baynes

Department of Human Services

Charles Stening

OC Energy

David Lawes

National Mercantile Pty Ltd

Dee Tiet Adidas

Australia Pty Ltd

Henri Le Maire

National Mercantile Pty Ltd

Jamey Basias

Equifax

Jennifer Noonan

Equifax

Angela Baston

Department of Human Services

Judy Paterson

Department of Human Services

Barbara Hennessy

Department of Human Services

Kim-Ngan Vu

Simplot Australia

Benjamin House

Department of Human Services

Natasha Kaplan

Department of Human Services

Craig Muter

Department of Human Services

Nicole Bell

Department of Human Services

Donna Abberley

Department of Human Services

Rowena Byers

Crowe Horwath (Aust) Pty Ltd

Donne Swartz

Equifax

Sashini Jayaratne

Insurance Australia Group (IAG)

Ewen MacMillan

Department of Human Services

Ginette Muller

irsch Sutherland

Greg Kotzadamis

University of Queensland

Janice Rogers

Crowe Horwath

Joanne Forster

Department of Human Services

Joel Koster

Department of Human Services

Leann Hammond

Crowe Horwath

Michael Duffell

Department of Human Services

Paulina Reyes Duval

Department of Human Services

RenÃ© Ellis

Department of Human Services

Sharna Murphy

Department of Human Services

Wendy Sherry

Department of Human Services

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

Western Australia Catherine Owens

Department of Human Services

Chantell Stansfield

Department of Human Services

Dion Barry

Department of Human Services

Jimmy Trpcevski

WA Insolvency Solutions

Liam Bellamy

Jirsch Sutherland

Sourabh Kansal

Department of Human Services

AICM Marketplace Directory of services For information, options and pricing please contact Andrew Le Marchant on +61 2 8317 5052 or E: andrew@aicm.com.au COLLECTIONS

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AICM Divisional Partner

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AICM Divisional Partner

COLLECTION SYSTEMS AICM Divisional Partner Trade Bureaux Australia

Kemps Credit Solutions

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50 Grenfell Street Adelaide 5000 Tel: 08 8418 1450 Email: gcrowder@kemps.com.au Web: www.creditsolutions.net.au/kemps Kemps Credit Solutions. A debt collection partner you can trust. Working with some of the country’s leading providers of information management and data intelligence solutions. Since 1965 Kemps Credit Solutions has set the benchmark for providing quality collection and recovery services to South Australian businesses and government.

INFORMATION

illion EDX Tel: 03 9028 8278 Email: enquiries@edxppsr.com.au Web: www.edxppsr.com.au EDX is the market leader in PPSA consultancy and registration, with over 15 years’ experience in Australia and New Zealand. We have helped hundreds of Australian businesses adjust to the PPSA by providing no-nonsense practical advice, coupled with first class PPSR registration capability and registry management. Whether you have high volumes and need a software solution or simply wish to outsource, EDX has a solution to meet your needs.

Dun & Bradstreet has changed. We are now illion. Bringing data, analytics and insights to life is at the heart of what we do, and we will continue to break new ground in the product development and innovation space. Our commercial and consumer databases enable Australian businesses and consumers to make informed decisions, based on real time data drawn from an extensive range of sources. We remain a reliable and trusted partner to a wide range of global organisations, who use our solutions for credit reporting, risk management, sales and marketing and receivables management.

AICM Divisional Partner

BRI Ferrier Adelaide

Tel: 13 23 33 Web: www.illion.com.au

AICM MARKETPLACE

Trade Bureaux Australia P/L provides secretarial and chairperson facilities for Industry Credit groups within Australia. Operating since March 1998 we are independent and cater for over 25% of the Australian Credit Bureaux market. Our members work together to strengthen their credit knowledge and reduce their company’s investment in working capital and bad debts. Contact Jeff Hurst to find out about forming or joining one of our industry groups.

INSOLVENCY

AICM National Partner

CONSULTANCY

PO Box 473, South Morang VIC 3355 Tel: 03 9303 8900 Email: tba@bigpond.net.au Web: www.tba.net.au

Level 4, 12 Pirie Street Adelaide SA 5000 GPO Box 952, Adelaide SA 5001 Tel: 08 8233 9900 Fax: 08 8211 6644 Web: www.briferrier.com.au BRI Ferrier Adelaide provides recovery, insolvency, advisory and forensic accounting services to businesses throughout South Australia and beyond. We have a wealth of in-house technical expertise as well as the support of our specialist professionals from BRI Ferrier’s unrivalled national and international network.

May 2018 • CREDIT MANAGEMENT IN AUSTRALIA

AICM Marketplace Directory of services For information, options and pricing please contact Andrew Le Marchant on +61 2 8317 5052 or E: andrew@aicm.com.au INSOLVENCY AICM Divisional Partner

INSOLVENCY

LEGAL

AICM Divisional Partner

Vincents Ferrier Hodgson Level 28, 108 St George’s Terrace Perth WA 6000 Tel: 08 9214 1444 Email: perth@fh.com.au Web: www.fh.com.au As a leading independent financial advisory and restructuring provider, Ferrier Hodgson solves complex problems with commercial solutions.

AICM Divisional Partner

Level 34 Santos Place, 32 Turbot Street Brisbane QLD 4000 Tel: 1300 VINCENTS (07) 3228 4000 Web: www.vincents.com.au We live in a world of increasing complexities; the need for true expert advice is now more evident than ever. Established for more than 25 years Vincents is an Australian firm of accounting experts and business advisers specialising in assurance and risk advisory, business advisory, corporate advisory, financial advisory, forensic services, and insolvency and reconstruction. Gain insight and take control with Vincents.

AICM Divisional Partner

Nova Legal Level 2, 50 Kings Park Road West Perth 6005 Tel: 08 9466 3177 Web: www.novalegal.com.au Nova Legal can assist with the recovery of problem debtors (large and small). Founding director Raffaele Di Renzo acts for creditors, debtors, directors, credit managers and insolvency practitioners in relation to solvency issues and dispute resolution.

AICM Divisional Partner

Results Legal FTI Consulting

Worrells

Tel: 08 9321 8533 Web: www.fticonsulting.com

Suite 1103, Level 11, 147 Pirie Street Adelaide SA 5000 Tel: 08 8214 0500 Email: adelaide@worrells.net.au Web: www.worrells.com.au

FTI Consulting is an independent global business advisory firm dedicated to helping organisations manage change, mitigate risk and resolve disputes: financial, legal, operational, political and regulatory, reputational and transactional. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle – from proactive risk management to the ability to respond rapidly to unexpected events and dynamic environments.

Worrells is dedicated to solvency management, insolvency administration and forensic investigation. Worrells have been providing high quality corporate and personal insolvency services for over 40 years. We pride ourselves on offering reliable and practical solutions to those burdened with debt. With 24 partners and over 100 staff in 26 locations across Australia we are resourced nationally but focussed locally.

Level 4, 183 North Quay Brisbane QLD 4000 Tel: 1300 757 534 Web: www.resultslegal.com.au Results Legal is a national firm with a focus on promoting and protecting the rights of trade creditors. Our clients are some of Australia’s largest trade credit companies who rely on our assistance for legal recovery, dispute resolution, preference claim defence and PPSA rights. Results Legal are the obvious first choice for companies seeking a national solution to resolve commercial disputes and pursue swift, successful and cost effective legal recovery action.

AICM Divisional Partner

LEGAL

TurksLegal Insolvency Intel Tel: 1300 265 753 Web: www.insolvencyintel.com.au Email: answers@insolvencyintel.com.au Insolvency Intel: a subscription-only provider of insolvency and turnaround services for credit managers. Backed by national firm Jirsch Sutherland, our friendly team is just a phone call or email away, providing members with practical, strategic advice about corporate and personal insolvency. Free initial consultation; networking opportunities; training and presentations; knowledge database access; regular newsletters. Register now for a free subscription.

Tel: 02 8257 5700 Web: www.turkslegal.com.au Contact: Daniel Turk

Bartier Perry Tel: 02 8281 7800 Web: www.bartier.com.au Email: info@bartier.com.au Our commercial disputes team is a market leader in debt recovery when it comes to results and costs competitiveness. We pursue debts of all sizes and guide clients through the process including enforcement of judgments obtained. As experts in PPSA law, we are called upon to assist businesses with regularising their PPSR registrations, and enforcing rights pursuant to those registrations.

CREDIT MANAGEMENT IN AUSTRALIA • May 2018

TurksLegal is a specialist commercial law firm with 33 Partners and over 160 staff across our Sydney, Melbourne and Brisbane offices. We are proud to look after the interests of trade creditor suppliers and financial institutions in: l Portfolio debt recovery using our market-leading, real-time client interface, ‘TurksFocus’ l Resolution of complex debt disputes l PPSA recovery l Defence of unfair preference claims l Supply documentation and guarantees.

AICM MARKETPLACE

AICM Marketplace Directory of services For information, options and pricing please contact Andrew Le Marchant on +61 2 8317 5052 or E: andrew@aicm.com.au RECRUITMENT

TECHNOLOGY

AICM Divisional Partner

TRADE CREDIT INSURANCE National Supporting Sponsor

Sharp & Carter Web: www.sharpandcarter.com.au For any assistance with Credit recruitment, please call Melbourne – Chris Belegrinos on 03 9616 2622 Email: cbelegrinos@sharpandcarter.com.au Sydney – Janine Coppeller on 02 8315 8804 Email: jcoppeller@sharpandcarter.com.au Sharp & Carter will tailor candidate sourcing strategies to suit your company’s needs, taking into account factors such as time frame, budget, level of role and availability of candidates in the market. We are committed to achieving a successful outcome for every assignment on which we work.

CreditSoft Solutions Tel: 1300 720 164 Email: info@creditsoft.com.au Web: www.creditsoft.com.au TICA is Australia’s largest tenancy database, with over 7 million records and 7000 members. Using TICA, commercial members can have access to a debtor’s recent and historical application and tenancy records – making it the ideal tool for skip-tracing. The TICA Assist add-on also allows members to register their debtors and receive email alerts when they apply for a rental property.

National Credit Insurance Brokers Tel: 1800 882 820 (freecall) Email: info@nci.com.au Web: www.nci.com.au National Credit Insurance Brokers (NCI) has established itself as the premier trade credit insurance broker in Australia, New Zealand and Singapore. Trade credit insurance is a highly specialised area of insurance and, with its 30 years of experience, National Credit Insurance Brokers has developed an unmatched depth of expertise in arranging the right protection at the best price for your particular trading needs.

See you at AICM’s

2018

NATIONAL CONFERENCE 17 - 19 October 2018, Melbourne Visit aicm.com.au for details and registrations

The Publication for Credit and Financial Professionals

IN AUSTRALIA

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 www.aicm.com.au