Harold and Barbara Cronin spent 45 years building their family's farming enterprise on Western Australia's south coast.

In two short years, it was gone.

The Cronins lost their farms and their home, and were left owing $4.58 million to the National Australia Bank (NAB).

It followed bank foreclosure and the sale of their farming business below the market price.

The NAB later confirmed it would not take action to recoup the outstanding debt.

"If you spent 50 years of your life building up something that you love, just to see it all broken apart, how do you get over it?" Mr Cronin said.

"No wonder people commit suicide. You feel that way plenty of times, I can tell you."

The NAB said receivership was always a last resort and it had supported the Cronins during the expansion of their business.

It said a number of factors had caused significant financial pressure for the Cronins' family business, and it wasn't the only organisation to withdraw funding.

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The Financial Ombudsman concluded the NAB was entitled to place the business under receivership.

The story of the Cronins is one of more than 6,000 submissions that have been made to the banking royal commission, which starts its fourth round of hearings in Brisbane today.

The hearings will focus on issues affecting Australians in remote and regional communities, including farming finance.

The wild west

The Cronins took up a farming block covered in mallee scrub. ( Supplied: Harold Cronin )

As an 18-year-old in 1960, Mr Cronin set off across the country from New South Wales to make his life on the fledgling farmlands of WA's south coast.

"[It was] the wild west," recalls Mr Cronin, now 76 years old.

He took up a farming block in West River. Low mallee scrub covered the plot. There was no drinking water or electricity.

A narrow bush track connected West River to the town of Ravensthorpe, 20 kilometres away.

"We had to go to town and cart water out to cook with. It was a hard battle. We lived in a tent for a while," Mr Cronin said.

He earned money as a sheep shearer in Esperance and by 1967 he had raised enough money to make a real go of farming.

Harold and Barbara Cronin relocated to West River, WA, in the 1960s. ( Supplied: Harold Cronin )

Building the family enterprise

Mr Cronin married Barbara and together they built the family home at West River.

Over the next 40 years, the Cronins became established as one of the region's farming families, growing lupins, peas, canola, barley and wheat and breeding award-winning sheep.

They were among the first to trial no-till farming and built a relationship in agricultural research and development with the University of Western Australia.

Mr and Mrs Cronin expanded their enterprise by purchasing neighbouring blocks, and brought their son and daughter-in-law into the business.

By 2010, the Cronins owned six farms under the company name Chambejo Farms, with finance provided by the NAB.

Mr Cronin said none of it came easily.

"There was drought, there were floods, there were fires.

"We had the normal traumas of farming but we achieved what we set out to do."

Harold and Barbara Cronin with their award-winning sheep ( Supplied: Harold Cronin )

Rot sets in

As they worked to turn two blocks purchased in 2009 into profitable farms, Mr and Mrs Cronin prepared to hand full management of Chambejo Farms to their son.

It was a troubled transition made all the more challenging by two bad seasons.

"In 2011, we got flooded out. Then the next year was the driest since 1940," Mr Cronin said.

"We had no chance of recouping that grain because it just wasn't there to get. It was one of the worst years we've had."

Mr Cronin approached his local NAB branch and increased the overdraft on his account by 8 per cent to see through the poor seasons.

By expanding the business and taking on more land in 2009, the Cronins had assumed more debt.

But farming is a cyclical industry, and Mr Cronin described his financial position in 2012 as "nothing unusual".

"That's the way it's been ever since we've been here," he said.

"There are good years and bad years. Usually after a couple of bad years, there's a good year straight after it."

But in August 2012, Mr Cronin received a phone call from the local NAB branch manager who advised that a red flag had been placed on his account.

By January 2013, before the harvest was complete, a cheque issued to the NAB by the Cronins was dishonoured, triggering a default.

Mr Cronin didn't realise it at the time, but it was the beginning of the end of his farming life in West River.

"It was a bad year, that's all it boiled down to. But that's when the rot set in."

The Cronins grew lupins, peas, canola, barley and wheat. ( Supplied: Harold Cronin )

NAB steps in

When the default occurred, Mr and Mrs Cronin were cut off from all finances, with their credit cards and accounts frozen.

"Other years when it has been a hard time, we've battled our way through. But this time, I could feel it was different," Mrs Cronin said.

"Normally the bank will come and they will talk things through with you, but not this time. We realised then that things were not going to be the same as other years."

In May 2013, the Cronins had their fears confirmed by the NAB.

A representative advised that insolvency firm Ferrier Hodgson had been appointed by the bank as receiver managers of Chambejo Farms and its assets.

"When we walked into the office, we were told, 'You are in receivership as of yesterday'. That was it. We were just dumbfounded," Mr Cronin said.

Mr Cronin estimated his debt to the bank was $5.1 million.

The Chambejo Group was then managed by Ferrier Hodgson with the primary objective of selling or leasing the farms to repay the Cronins' loan to the NAB.

In a statement, NAB said the Cronins were allowed to continue living on the farm during the sale process, and provided with additional funds to assist with general living expenses and critical utility payments.

"They charged us rent to start with … then they gave us a living allowance of around $80 a week just so we could live," Mr Cronin said.

Harold and Barbara Cronin after the sale of their farm business. ( ABC Great Southern: Aaron Fernandes )

Lenders and borrowers

The NAB says the Cronins' company was under extreme financial pressure and receivership is always a last resort. ( ABC News: Nic MacBean, file photo )

The NAB has explained its decision to take control of the Chambejo farms.

"During the years 2001 and 2009, the Cronins expanded their agribusiness with the purchase of land and machinery. We supported the family through the expansion," said NAB Agribusiness general manager Kahn Horne.

A combination of factors, including volatility in production, seasonal conditions, fluctuating commodity prices, operating costs and changing personal circumstances, caused significant financial pressure on the business and its debt obligations.

"[Chambejo Farms] was under extreme financial pressure," Mr Horne said.

"There were significant creditors, some of which had issued default notices … there was no funding in place for the current season."

Mr Horne said the appointment of receivers in May 2013 was based on financial default. A term loan had expired, and the overdraft was also overdrawn.

"We understand the impact the receivership and subsequent sale of farming properties has had on the Cronin family," he said.

"Our objective is always to see a customer's situation improve and receivership is always entered into as a last resort."

Receivership

While Ferrier Hodgson's primary task was to recoup money for the bank, the costs of their services were added to the Cronins' debt.

Ferrier Hodgson's management of the Cronins' farms lasted nearly two and a half years and during the period of receivership, $1.45 million was added to the Cronins' debt.

"I didn't like the feeling of knowing that they were going to sell us up. It didn't seem right," Mrs Cronin said.

"You really get a feeling that you're a criminal."

Ferrier Hodgson declined to respond to questions submitted by the ABC, and referred the matter to the NAB.

The eventual breakdown of expenses added to the Cronins' debt included about $704,000 in receivers and managers' remuneration; $110,000 in legal fees and $297,000 for chemicals to manage weeds.

In reviewing the case, the Financial Ombudsman Service determined that the NAB was contractually entitled to appoint the receivers and it was reasonable to do so.

No winners, only losers

After four months of paying rent to live in their family home, Mr and Mrs Cronin drove out of West River for the last time.

On 11 November 2015, Mr Cronin received a letter from the NAB providing information related to the sale of Chambejo Farms.

It confirmed that all six properties had been sold by the end of April 2015 for a total of $5.65 million.

In the letter to Mr Cronin, the NAB confirmed that by the completion of receivership and sale of all property, the residual debt owing was $4.58 million.

"The end result was we had nothing left, and we owed them $4.5 million," Mr Cronin said.

The NAB advised it did not intend to take any further action to recoup the money. The debt would effectively be written off.

The NAB did not take action to recoup the money owed by the Cronins and instead wrote off the debt. ( Supplied: Harold Cronin )

Mr Cronin maintained that at the time of sale, the Chambejo Farms and its assets were worth more than the debt owed to the NAB.

A valuation performed in 2013 on behalf of Ferrier Hodgson put the market price of all six properties at $8.42 million.

After the sale of two farms for $1.35 million, a second valuation in 2014 valued the remaining four farms at $4.84 million.

In a letter to Mr Cronin on 15 December 2015, Ferrier Hodgson said:

We are satisfied that the comprehensive sale process undertaken by us in connection with the sale of the properties achieved [the] best price reasonably obtainable having regards to the circumstances existing when the properties were sold.

But Mr Cronin questioned why the family business was sold to make a loss of $4.58 million for the NAB.

"They [receivers] ended up spending all this money for nothing, and made sure we couldn't survive, and we didn't," Mr Cronin said.

"Why? So the bank can make a loss of $4.5 million? It doesn't make sense."

Relationships between farmers and the banks

Julian Krieg, chairman of the Rural Financial Counselling Service (RFCS) of Western Australia, has seen many families face circumstances similar to those of Mr and Mrs Cronin in 2013, who were searching in the margins to make repayments to the bank.

But Mr Krieg said the responsibility for a borrower's default laid with the lender in few cases.

"The bank enters a contract with you for a good reason. They want to make money out of lending you money," he said.

"You had a contract with the bank to pay certain things on certain dates. If you can't achieve that, you need to talk to the bank."

The Rural Financial Counselling Service of WA expects the royal commission will hear similar stories to that of the Cronins. ( Supplied: Harold Cronin )

Mr Krieg said one of the key reasons that relationships between banks and farmers deteriorated was the borrowers' failure to address financial hardship quickly.

"Organisations like RFCS can't take over your case, but they can certainly help you put together plans that you can take to the bank and quite often they're accepted," Mr Krieg said.

"But like a lot of people, farmers don't like to face up to the issue until its gets really serious.

"There are too many stories of farmers ignoring warnings and letters from their bank … throwing the letter of default in the bottom drawer, refusing to answer phone calls.

"We need to actually face up to the fact that there are issues on both sides of this argument."

Mr Krieg said he anticipated stories similar to that of the Cronins would be heard at the royal commission, but stressed the need for cooperation to ensure more farmers did not leave the industry.

"I think there have been cases where banks have acted too hastily, and have not fully understood the farmer's situation or the seasonal variations that happen to farmers," Mr Krieg said.

But he said the best way to ensure a profitable farming industry was for farmers to maintain trust in the financial sector.

"If farmers act more quickly and have a plan about how they're going to deal with their issues, we find that banks will support the farmer [through] to another season or to sell their property in a dignified way rather than a repossessing situation.