We will all pay for this

Whether Westpac wins or loses this case, all Australians will pay for this.  One way or another.  The only certain winners will be the lawyers.

NinFax is reporting that:

Westpac is facing the first class action against a major bank in the wake of the Hayne royal commission into financial misconduct, with plaintiff firm Maurice Blackburn taking on the bank over responsible lending.

Maurice Blackburn on Thursday said it had filed the lawsuit in the Federal Court, and the lead claimants in the case would be Queensland couple Ian and Michelle Tate, who borrowed $1.8 million from the bank across five properties between 2008 and 2016.

So what is this case about?  Well, according to Our ABC:

A Queensland couple is considering legal action against Westpac, arguing the bank failed to lend responsibly and that it ultimately cost them their family home.

Ian and Michelle Tate were planning for their future when they took out three loans for four investment properties in 2008, 2013 and 2014.

Those evil negative gearers and property speculators.  Let’s tax them into oblivion.

Apparently you see, the Tates borrowed $1.6 million using the properties and their primary home as security against the loan.  But the Tates:

discovered their loan applications grossly underestimated their monthly household expenses and that the interest-only periods were set to expire.

Mr Tate said:

I guess the brokers got their money, the banks were happy, they’ve got what they want, and at the end of the day here we are renting.

At the time, it seemed pretty easy [to get the loans]. They were just sort of handing money out.

The banks got what they wanted.  The brokers got what they wanted.  What did the Tate’s get?  THE MONEY THEY ASKED FOR.

What else did the Tates say?

Westpac never asked any detailed questions about their expenses.

This is another way of saying that Westpac believed what the Tates said and attested to by signing their loans.

Fair dinkum.  How underhanded can a bank be when they trust and believe what their customers tell them.  Off with their heads.

If the Tates win this case, Westpac will have to cough up.  And how will it do that?  It will either have to pass it on to other Westpac customers or reduce its payments to shareholders and the ATO.  Or both.  No free lunches in this world.

If the Tates lose his case, perhaps their solicitors advise them to sue the Queensland government for economic mismanagement that contributed to the decline in Queensland property prices?  Will they be able to sue for stamp duties paid?  Oh and Westpac will have to pass on the costs of defending the case through the above recovery pathway.

This case also presents an interesting proposition for the banks.  If their borrowers under estimate their expenses, get a loan and blow up and then ask for their money back when they blow up, should then the banks be able to ask for supplementary interest from borrowers who under estimate their expenses, get a loan and make a motza from their property speculation?

TAFKAS is sure that the architects of the brilliant regulatory schemes that operate in Australia will be able to work this one out.

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33 Responses to We will all pay for this

  1. Bruce of Newcastle

    Ironic that the left’s favourite class-action vultures are taking on the left’s most PC big bank.

  2. Percy Popinjay

    The gall of those imbeciles seeking the damages, not to mention the gall of MB in taking on the case.

    Unfriggingbelievable. As Steyn has noted before, “personal responsibility is for chumps”.

  3. TAKFAS doesn’t realise that in this period of Royal omissions and imaginary emissions, the concepts of accountability and responsibility are simply historical traditions that have been left behind in the swift dart to the Left.
    Such notions are artifacts of the ancient classical Liberal philosophy, which in no way shape or form related to the modern liberal attitudes.
    Rather than the individual being paramount, today’s liberals have no sins, and everything that happens is the fault of someone else.

  4. All banks and other lenders should now instigate a ‘Tate Rule’: Investigate each loan applicant’s ability to service a loan down to how much they throw away in their rubbish (wasting stuff may affect the ability to service a loan) and then only authorize a loan amount based the outcomes (with a risk factor included).

    I wouldn’t blame lenders one bit if they became very wary about who got a loan and for how much if this law suit got off the ground.

  5. Empire 5:5

    Politicians, CEOs and union hacks get rewarded bigly for lying.

    Why wouldn’t a mortgagee try it on?

  6. NB

    Presumably the Tates were left with the capital they started with, plus/minus any increase/decrease in the value of the homes, minus costs. It’d be interesting to know what the exact figures are.

  7. Robbo

    Any sensible person would assume that the Tate’s had a responsibility to disclose every relevant detail to the bank when they applied for their loan. That responsibility, according to the Tate’s lawyers, was actually not theirs, it was the banks. So now we see a couple of people who failed to reveal all their relevant details on the loan application, and which they (apparently) happily signed, now declaring themselves to be the victims of the greedy bank because their plans for a secure happy future went pear shaped due to a downturn in the economy. If the Tate’s win this case it will be a travesty of justice.

  8. philby

    I cannot make my mind up as to whether the borrowers are completely stupid or in fact they are very smart, either way the case should be thrown out of court.

  9. Dr Fred Lenin

    Now the maggots are going to stuff the banking industry like they are doing to the power,horticultural ,agricultural ,mining and other industries. A Question comrades where are you going to get the money to enrich yourselves without the taxes they pay ? How are you going to light your luxury house and use your computer when its a still cloudy day , how are you going to go out to fine restuarants at night when there are no street lights and no lights in the resusrant ? These maggots havent got a bloody clue .
    Great plan isnt it we live in the third world un industrial dark while our coal a ]nd gas provide cheap power and industry to other countries , we will benefit a bit as their citizens come as tiurists to see how their grandparents lived eighty years ago,Australians the Trailer Trash of Asia ,come and see the oadt in the present .

  10. thefrollickingmole

    Its worth remembering they would have sailed along fine picking up capital gains if the government hadnt decided interest only loans were the spawn of satan.

    Suddenly whats manageable becomes ruinable.

    Thanks daddy government….

  11. EvilElvis

    Ironic that the left’s favourite class-action vultures are taking on the left’s most PC big bank.

    Yep. The Tates are retards but Westpac deserves as much shit as can be heaped on them, but lawyers are scum. Such a moral dilemma to pick a winner…

  12. Chris M

    So the bank sues them for admitting they knowingly lodging a fraudulent application.

    And if they used a broker why isn’t that broker taking the rap?

  13. Russell

    Ambulance-chasing work must be getting harder to find. This is just MB using their-ABC for free-advertising using the usual Pix-People techniques. No intention to win this one.
    Did they say $1.6M? How many normal people ask for that sort of loan in Qld? You could buy 6 or 7 houses in Gladstone with that money. They aren’t average home owners – they are property speculators. Westpac lawyers should ask for some discovery to determine if they’ve have done a Tafe business course or an online Real-estate course over the previous few years. Could short-circuit lots of the bank’s lawyer costs.

  14. Pyrmonter

    The (taxpayer funded) legal activists who have rolled this out call it ‘predatory lending’. The question is, who is the predator?

    (And – while the activists have pressed for it, it costs a good deal to comply with – that’s why Westpac automated this exercise. Those costs, and the uncertainty of the requirments, are an excellent barrier to the entry of potential competitors. Something that will never have crossed the minds of the bank’s advisors on regulatory policy. Never.)

  15. Pyrmonter

    @ Bruce

    Lenin was right: the capitalists (bankers) will sell their murders the rope used to hang them. Chances that Maurce Blackburn banks with Westpac?

  16. Russell
    #2940112, posted on February 21, 2019 at 4:58 pm

    You might be right, this smells a bit like the Jussie Smollett case.

  17. PB

    Aren’t people currently whining that the Banks ARE asking detailed questions about their finances now?

    Law firms are just investment houses by other means.

  18. PB

    I wish there was an agree tick in the comments, because I’d be giving it a real workout.

  19. tombell

    reminds me of the insurance brouhaha over the Brisbane floods. Those people who bothered read their policy and stumped up extra for flood cover if required. After all they were living in a flood plain. Those who didn’t bother reading their policy, didn’t bother stumping up extra premium and therefore didn’t have flood cover bleated loudly and proudly. What with all the virtue signalling pollies on board it was a lay down. They got their cover for free. And as for the chumps who’d done the right thing…..

  20. Jonesy

    Hope this goes down in a screaming heap. The best analogy….suing Crown Casino because they lost big time on the high bet tables and couldnt afford it…and the casino should have known…and the dog ate my homework…a flash flood…a plague of locusts..it wasnt my fault!

  21. gorgiasl

    Looks like the Tates and Maurice Blackburn attended the AOC school of finance

  22. Speedbox

    This is just unbelievable. They signed the forms; they borrowed the money; they speculated; they lost. And its the bank’s fault?

    In some respects I’m not surprised because in this society it always has to be ‘someone else’s fault’.

    As noted above, if the investment environment hadn’t turned (regardless of reason), they would be smugly sitting on 5-6 investment houses, raking in rental income and enjoying capital gains.

    These people shit me. I hope the legal fees push them to bankruptcy.

  23. Watch as all the ambulance chasers come out to play with class actions. Hop in for your chop, boys.

  24. yarpos

    I was a bit bemused by the Tates teary comments about the banks irresponsible lending practices. Its almost like the Westpac people rapeled from black helicopters, stormed their house and made them sign loan applications at gunpoint. The level of victimhood was hard to beleive.

    If they win this case , and all things are possible after that recent Environmental Court ruling, then personal responsibility is totally out the window. Just do stupid stuff and sue anyone involved. When do we sign up to become a US State?

  25. AlanR

    Karabar @ 293998

    ” … concepts of accountability and responsibility are simply historical traditions that have been left behind in the swift dart to the Left.”

    Really? I would have thought the entire Morrison government has abandoned any concept of accountability or responsibility recently. Are you suggesting then that they are really implementing a ‘swift dart’ to some left wing Marxist plot?

  26. Fibro

    They discovered their loan applications grossly underestimated their monthly household expenses and that the interest-only periods were set to expire.

    Yes, when you signed the papers. Reptiles.

  27. When do we sign up to become a US State?

    Dan Andrews has already signed CFMEUistan over to China.

    No-one’s checked the fine print to see exactly what form of satrapy our serfdom will be administered under.

  28. Linden

    I think we will see plenty of this sob sob the poor me’s. Probably knew damn well when going through the motions that they were slipping in a few porkies to make sure it all happened. They wanted the glamous life style with being ‘ big time property wheeler and dealers’. Labor ploy obviously is to suck in all the would be head kickers for their vote. All about victims and equality, end result the cost of doing just anything will become more expensive and then the follow on from that. One thing for sure the banks will not like being made to look fools and for that the price is not know yet.

  29. Kneel

    For the most part, I agree with “it’s their own fault” – with one exception: If they were shown their “headline” repayment amount with the honeymoon period as the basis, and didn’t prominently show or discuss the amount after that period expires, it might, maybe, be considered “predatory lending”. Remember, this is largely what caused the GFC – people being misled about how much they needed to pay. If westpac failed to disclose this information or buried it on page 1,372 of the loan agreement, then in my view, it is Westpac who should “cop it and shut up”.

  30. George Gell

    If the Tates made a profit from the properties they would no doubt donate the profit to charity or, perhaps some needy cause like Blackburn Lawyers. Well Westpac did commit te crime of believing a couple of greedy liars, didn’t they.

  31. If they were shown their “headline” repayment amount with the honeymoon period as the basis, and didn’t prominently show or discuss the amount after that period expires, it might, maybe, be considered “predatory lending”.

    True, except that I’d take a lot of convincing that people who borrowed $1.6 million to buy four investment properties didn’t know, and shouldn’t be expected to know, what they were doing.

  32. Linden

    Yes the wash up from it.

  33. Dr Fred Lenin

    Blackburn maggots are worthy descendants of the defrocked criminal priests of the Roman chuch,excommunicated and thrown out who were the founders of the law trade ,they were the only ones who could read and write and were just as manipulative , greedy and deceitfull as the modern day ones .
    During the English Peasants Revolt if the middle ages the people killed some of their persecutors and any law trade people they found proving they were hated then as they are today.

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