Slater & Gordon is investigating launching a class action on behalf of aggrieved borrowers and mortgagors of Bankwest and the Commonwealth Bank of Australia.
The claims stem from Bankwest’s perceived behaviour following its 2008 takeover by the CBA, with many small property developers alleging their debts were unfairly called in.
Last month, National senator John Williams launched a senate inquiry into the relationship between banks, receivers and valuers, which is likely to touch on some of the claims in relation to Bankwest.
Slater & Gordon commercial and project litigation lawyer Van Moulis told SmartCompany the law firm was conducting its due diligence with litigation funder, IMF Australia.
“There is momentum building up now, for instance in the form of the senate inquiry which has been announced along with the involvement of IMF,” says Moulis.
“Our due diligence in relation to the class action is continuing and IMF does its own due diligence, it has lawyers on staff.”
“We are looking at whether some of those people with Bankwest loans were hard done by when Bankwest re-valued their securities and called up their loans in the period after CBA took control of Bankwest.”
“So far we have selected 120 people [for the class action] but we have also had a lot of telephone enquiries both before and after the recent Four Corners program.”
“The types of cases we are looking at are primarily commercial developments and involve property developers and small to medium-sized business owners.”
“We expect the senate inquiry will get underway in two to three months and it is hoped the enquiry will uncover more facts which will be relevant and useful for the class action.”
Moulis says it is difficult to say when the class action is likely to commence but he would like to have seen some of the results of the senate inquiry first, which is expected in the next two to three months.
“I am not just focused on the litigation,” says Moulis, emphasising the possibility of a pre-trial settlement.
“These days we have pre-trial protocols in the Federal Court where parties have to take genuine steps to resolve grievances outside court, so I would be interested in talking to the CBA and I would like a copy of the purchase agreement between the CBA and Bankwest as I believe there is a part which is quite relevant.”
“I am not interested in pursuing a case that has no merit so if they can show me the agreement an aspect of the class action may even be resolved.”
James Middleweek, investment manager at IMF, says the litigation funder had been approached to consider funding the class action and was currently investigating the merits of the claims.
“At the end of the day cases like this need funding and they are expensive, it is unlikely that a class action would proceed if it was not funded by a litigation funder,” says Middleweek.
A spokesperson for Bankwest told SmartCompany the bank strongly denies the allegations.
“Due to the global financial crisis and the broader economic environment property values and property development in general suffered between 2008 and 2011 and Bankwest assisted many customers through this period and continues to do so,” says the spokesperson.
”Bankwest has acted fairly with all its customers since its acquisition by the CBA and honoured all of the existing contractual and credit commitments with customers.”
“The bank does not gain anything financially when receivers are appointed so the suggestion that Bankwest forced customers into receivership is absurd.”
“When our customers do sometimes face financial difficulties, our overriding priority is to work closely with them on an individual basis to try and assist them wherever possible.”
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
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