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- [00:05]
A
It should have been a time of celebration for a Sydney woman who had bought a new home for herself and her daughter. But as settlement loomed, her application for a mortgage unraveled in shocking fashion. And it was all over. $44.11. I'm Samantha Salinger Morris, and you're listening to the Morning Edition. From the Age and the Sydney Morning Herald. Today, Kishore Napier Raman on what led a judge to demand that the head of one of the big four banks be hauled before a court this week. Now, Kishore, can we just start by going back to the beginning of this saga? Can you just tell us when Fiona Vinal first realized that she had an issue with her credit rating?
- [00:55]
B
Well, it actually goes back to last year when Fiona got the quite welcome news that because of an interest rate cut, her mortgage repayments were going to go down. And then she went and paid at the reduced rate. But she paid at the reduced rate a month too early, based on a kind of ambiguously worded email from the bank. And you know how we always get something saying starts after July 10th. After July 10th actually meant August. So she paid the new rate a month too soon. And so she was therefore $44.11 down on her mortgage repayments. Fiona had a mortgage with St George, which has obviously been owned by Westpac since 2008. She then goes to buy a new home later in December. And when she goes to settle that, she finds that she cannot get a new mortgage for the new home because she is $44.11 in debt. She asks the bank to fix this problem. The bank says no. So, so Fiona lawyers up and goes to the New South Wales Supreme Court, where she seeks to get that order overturned, get the adverse credit rating that's made against her name to the reporting agency overturned, and also to sue the bank for damages for misleading and deceptive conduct.
- [02:02]
A
Okay, now we're going to get into how the bank comes into this and how they responded. But first off, this sounds like a tiny amount of money. We're talking about $44.11 that she was owing. So how did this then lead to her not being able to purchase this next home?
- [02:19]
B
Yeah, it is a tiny amount of money, and it's not the kind of amount of money that's going to do very much damage to westpac's bottom line. But it is an amount of money that is significant enough that under federal laws, the banks have to basically inform credit rating agencies that someone's had a shortfall. Right. They're bound to do that. But there's also a kind of way around that where if the bank thinks that that sort of error of payment has come through, kind of a mistake or something like that, they do have a bit of leeway to fix it. In this case, the bank had not fixed it, even though she'd requested that they fix it. And that meant that she basically had a lower credit score against her name. And that basically stopped her borrowing more money to buy a new home for her and her daughter later on.
- [03:03]
A
Okay, so tell us what happens next. So she commences legal proceedings against the bank. Then what happens?
- [03:09]
B
Well, it's a little bit complicated here. So she commences legal proceedings and then in January, this is listed for a hearing before a judge in the New South Wales Supreme Court. Westpac actually don't show up to that first hearing because the complaint or the legal complaint hadn't gone high enough into their system. She then calls WESTPAC multiple times asking them to show up. The judge's chambers call westpac asking them to show up, but WESTPAC do not show up. So the judge basically says, well, you know what, you're going to get your order, and orders the bank to remove the adverse credit rating information that is against her name. Subsequently, this gets listed for another hearing about a week or two later with a different judge. This time WESTPAC does come in. And then this is when they, in the words of Justice David Hammerschlag, are prepared to defend the indefensible, which is that they're going to fight over the $44.11, they're not going to remove the adverse credit information that's against her name and they're willing to basically go to legal war over it.
- [04:10]
A
Okay, so this is where things I guess, really ramp up because it seems like the New South Wales Supreme Court judge, Justice David Hammershl, at this point, it seems like he's got just a gut full of the bank stubbornness in, like you say, refusing to remove Fiona's adverse credit notice. So he goes straight to the top. Right. You know, St. George is owned by Westpac and the judge actually demanded that the WESTPAC chief executive front up to court right over this 40 odd dollars.
- [04:37]
B
Sometimes you see when you follow court cases, there's just a point where judges get fed up. They can get up fed up with the lawyers, they can get fed up with the parties for taking too long for doing this and that judges are notoriously a cranky, but you know, when they get cranky against the party like this, it's always, I suppose, interesting reading. And in this case. Justice Hammerschlag has really just had it with westpac's conduct in this case. He demands that the CEO, Anthony Miller, show up on Monday. This is at a hearing on Friday, and he notes that it's an unusual step, but he's like, you know what? You got to do it. Show up on Monday. Of course, over the weekend, he receives emails. His chambers receive emails from Westpac's lawyers saying that they have subsequently decided to file, follow the initial order and take away the adverse credit information against Fiona Vinnell's name. So His Honour then decides that it's not worth the Westpac CEO showing up to court on Monday and decides to not drag him into the mix. But he is clearly not happy with the conduct of the bank and how they've treated this lady. After the break, the consequences on the plaintiff, on Fiona, of her having an adverse credit rating are big. Like the consequence was that she couldn't buy a new home. And on the other hand, there's no meaningful consequence faced by Westpac.
- [06:03]
C
Jack Hardale was helping his daughter Emily lift an awkward dresser up a staircase when he slipped and fell backwards. A week later, Emily asked him how he was doing.
- [06:11]
B
I'm good.
- [06:13]
C
Truth was, he wasn't good. Jack needed help. Then the darndest thing happened. Emily called Pacific Source, My health plan. Jack learned that Pacific Source provides members with support beyond health care. In Jack's case, we got him in touch with the local food bank.
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B
You guys do that?
- [06:30]
C
Yes, we do, Jack. Pacific Source health plan.
- [06:33]
A
So tell us, because you've watched the court proceedings, so how did the judge actually respond to the bank's backflip on Fiona's credit rating? And what ultimately was the result for Fiona?
- [06:45]
B
Well, look, it was a good result for her. And what's going to happen next is this matter is now going to be transferred into the district Court, which is going to determine things like any damages that Westpac might be liable to pay to her. They haven't determined that yet. He also made an order that Westpac has to pay her legal cost, which we don't know what that is going to be, but I'm going to guess it's going to be a little more than $44.11, just knowing the. The going rate for barristers in Sydney at the moment. Then also, the judge also has a more kind of, shall we say, editorial commentary about the bank. He accuses it of lacking in basic commercial morality. He notes that, you know, that it's a minimal sort of amount of money that is her shot full $44.11, as we've said, and that there is a substantially unequal bargaining position between the parties, one of them being one of the big four banks, a big financial behemoth, and the other just being a regular everyday mum. He notes that, you know, the consequences on the plaintiff, on Fiona, of her having an adverse credit rating are very big. Like the consequen was that she couldn't buy a new home. And on the other hand, there's no meaningful consequence faced by Westpac on behalf of itself and by sort of not recording that detail. So Westpac doesn't really have any issue if she doesn't pay her sort of mortgage on time. She obviously made up that payment the next month. She was pretty prompt to do that. It also doesn't face any issue if it notifies the credit rating agency that it has to make that change. But for her, the consequences are quite major. So His Honour, helpfully, I suppose, from her sake, goes into all this further detail as to why he is so cranky about westpac's conduct in the case and why he is, yeah, unhappy with how she's been treated.
- [08:23]
A
And I've got to ask you your opinion on what this really quite unfortunate saga for Fiona, I guess, tells us about big bank morality more broadly, you know, and how helpful or non helpful they are in actually helping everyday people to buy a home. Because we know that this is such a difficult space for anybody who's saving to buy a place to begin with, let alone to sort of experience one of these hurdles. I mean, do you think this is happening more broadly?
- [08:50]
B
Oh, it's absolutely such a difficult situation because, you know, this started because she had copped an interest rate reduction. So that's usually good news for people out there, right, battling with the hellhole that is housing in Australia. And that was actually good news. And it turned out to be some, like, lengthy saga that's led to her going to court. Look, I think everyone who's ever dealt with a big institution, be it a financial institution, be it like, you know, an insurance company or anything like that, has just felt the frustration of sometimes just trying to speak to a human being or trying to deal with something that's just gone awry. It's just one of the most powerless situations you can ever feel ever been. It's this incredible, incredibly frustrating situation. I feel like anyone who's been in that situation has been like, you know what, I would love to go to court and get a judge or someone like that to just back me up here, because what happened feels wrong. So, look, yeah, I mean, I think a lot of people can probably relate to the situation more broadly. Most disputes like this do get resolved early. In fact, in this case, it is kind of interesting that this was not just quietly resolved normally without having to go to court. It's probably unfortunate for everyone involved that it did come to this. It's bad PR for the bank because you've got a judge coming up and lashing them and accusing them of commercial immorality or whatever he used. And then it's bad for this woman because she's had to go to court. I mean, even if her legal fees get paid, it's an onerous and cumbersome process. So really, I mean, yeah, everyone feels the frustration of dealing with these big institutions and. But sometimes, I guess things like this slip through the crack and for want of a better term, they just, yeah, they slip through the cracks and this is how they end up.
- [10:32]
A
It does raise questions that doesn't it? Does it make you wonder, like, it makes me wonder what sort of directives, I guess, the staff at the various big banks are being given in terms of how they should treat short payments or, you know, when there's small amount missing and, you know, when someone sort of addresses it and goes, hey, actually there's a mistake here. Does it make you wonder, like, I'm wondering, are they given a directive from on high? And this is, of course, just conjecture. Oh, just do everything you can to make people, you know, not be able to fulfill this mortgage or whatever it is.
- [11:02]
B
Yeah, sure. I mean, I, I don't know what westpac's internal sort of processes for dealing with this, for escalation is, but I will say, like, you know, increasingly a lot of these things are getting either outsourced or automated and obviously with the rise of AI, more and more of these things are going to be automated and sort of taken away from kind of real humans. And so there is kind of a line in this judgment. I'm not quite doing, doing it justice here, where Justice Hammerschlag points out that, you know, to, like a machine, a debt like this would be significant and would be something that has to be recorded. And obviously under the legislation, legislation, the bank does have to record that, but kind of, to a human, you can see that that's probably just like a little bit illogical and something that can be easily dealt with. And I wonder that, you know, with the rise of AI, with more of these kinds of functions and escalation points being sort of turned over to sort of chatbots or AI concierges and that kind of thing, whether that's going to actually make the process more efficient and better for customers. In some cases it might do that, but in other cases, whether it might lead to more situations like this where you've got something where the institution has probably just like literally missed the human element a little bit.
- [12:08]
A
And Kishore, just to wrap up, I have to ask what happened with Fiona because we know at the very beginning you said she'd bought this new home for herself and her daughter in western Sydney and she was unable to settle on the property because mortgage brokers, you know, had said that her credit rating made new lending impossible. Do we know if she has successfully bought a home?
- [12:28]
B
I don't know, to be honest. As far as I know, she's not settled on that property. We do know that, you know, this case is going to continue in the district court, I believe, unless it also settles. But you know, as far as we know, she did have a victory in court this week. So that's a good outcome for her.
- [12:45]
A
Well, thank you so much, Kishore, for your time.
- [12:48]
B
My pleasure.
- [12:57]
A
In other news today, Nationals Senator Matt Canavan has rebuked Pauline Hanson for suggesting in an interview with SK News that there are no good Muslims as the coalition tries to walk the line between wooing back one nation voters and celebrating Australia's multiculturalism. Hanson conflated Muslims with radical Islam, adding that those that adhere to Islam, quote, hate Westerners. The incoming president of the Royal Australasian College of Physicians has cast doubt on its long term survival due to concerns over a $40 million IT overhaul, a dysfunctional board and an external investigation into bullying allegations against the outgoing president. And Australia, the United States, Japan and the Philippines should establish a formal NATO style defense alliance to counter China's growing military power in Asia, according to Ellie Ratner, who served as assistant secretary of defense for Indo Pacific Security affairs under former American President Joe Biden. Read these headlines and more on sydneymorningherald.com and theage.com Today's episode was produced by Josh Towers. Our executive producer is Tammy Mills and our podcasts are overseen by Lisa Muxworthy and Tom McKendrick. If you like our show, follow the MORNING EDITION and leave a review for us on Apple or Spotify. Thanks for listening.
- [14:24]
B
It.