Westpac loans class action

Maurice Blackburn commenced a class action against Westpac on behalf of persons who entered into certain Westpac branded loans between 1 January 2011 and 17 February 2018.

The claim alleges that Westpac failed to comply with its responsible lending obligations in respect of these loans, and that customers have suffered, or are likely to suffer, loss. The class action was commenced by Mr and Mrs Tate.

Important update: class action to be discontinued

The Tates have instructed us to ask the Court to approve an order that will discontinue the class action. The reasons for their seeking to discontinue the class action are set out below.

Westpac has been successful on appeal in the ASIC Proceeding

As you may be aware, ASIC sued Westpac alleging that the bank breached certain responsible lending obligations under the National Consumer Credit Protection Act 2009 (Cth) (ASIC Proceeding). The ASIC Proceeding was one of the reasons why the Tates instructed Maurice Blackburn to investigate and commence the class action. Justice Perram found in favour of Westpac in August 2019. ASIC appealed to the Full Federal Court in February 2020 but on 26 June 2020, the Full Federal Court also found that Westpac was successful. ASIC decided not to lodge a further appeal to the High Court.

If you would like further information about the ASIC Proceeding, here are some links:

What this means for the class action

To date, the class action has been funded by a third-party litigation funder, Harbour Fund IV, L.P (Harbour). Harbour has paid significant amounts for the Tates’ legal costs so far.  Harbour also paid the Tates’ “security for costs”. This money was paid into an account held by the Court in the early stages of the class action. If the class action were to continue, further large amounts of money would likely be required to be paid into Court at the request of Westpac. The money is “security” to cover Westpac’s costs in the event that Westpac was to win the class action.

In light of Westpac’s success in the ASIC Proceeding and ASIC’s decision not to lodge a further appeal, Harbour does not wish to continue to fund the class action. Nor will it provide further “security” payments on behalf of the Tates.

The Tates cannot afford to pursue the case without the backing of Harbour and as a result, they have instructed us to apply to the Court for an order allowing them to discontinue the class action. The application will be filed with the Court by 24 August 2020 and we expect that the Court will hear the application before the end of September 2020.

What this means for you

Before the discontinuance hearing

You do not have to do anything in response to the application to discontinue the class action. However you may contact Maurice Blackburn by 21 August 2020 if you:

  • have any questions or concerns about the application; or
  • are a group member and would like to be heard by the Court in relation to the application to discontinue.

While you should read the pleadings carefully and get legal advice to determine if you are a group member (Further Amended Statement of Claim), generally the matters that would qualify you as a group member are if you:

(a) entered into a Westpac-branded credit contract for less than $5,000,000 between 1 January 2011 and 17 February 2018 that was secured by a mortgage of residential property;
(b) the credit was wholly or predominately:
(i) for personal, domestic or household purposes;
(ii) to purchase, renovate or improve residential property for investment purposes; and/or
(iii) to refinance such a loan; and

(c) suffered loss or are likely to suffer loss because Westpac:
(i) failed to make reasonable inquiries about your financial situation, requirements or objectives;
(ii) failed to verify your living expenses or essential expenses; or
(iii) did not assess the suitability of the credit contract in compliance with the legislation.

After the discontinuance hearing

If the Court approves the application to discontinue the class action, the case will come to an end and you will not be required to do anything. However, it is important that you understand the following things:

  • the discontinuance does not affect any of your rights to pursue a claim against Westpac;
  • if you were a group member in the class action, the timeframe you had to commence a claim against Westpac for the same conduct alleged in the class action was “paused” when the Tates commenced the class action on 21 February 2019.

In other words, if you were a group member, you have not lost (a) your legal right to make a claim against Westpac or (b) any time in which to commence that claim.

The time limit for bringing a claim will start running again when the discontinuance is approved. In general terms, the time limit is 6 years from when you first suffered loss as a result of Westpac’s claimed contraventions of the legislation. This can be a complex question and you should get legal advice about it.

Contact us

If you have any questions or concerns in relation to the matters above, please do not hesitate to contact Maurice Blackburn at westpac@mauriceblackburn.com.au or on 1800 931 358.

FAQs - your questions answered

Where seven or more people have claims that arise out of similar circumstances (such as in this case), a class action can be brought by one claimant on their own behalf and as a representative of others.

The class action process saves time and expense and avoids the need for the courts to determine common issues of fact or law more than once and enables disputes and claims involving large numbers of people to be resolved via a single case.

The claim is against Westpac in respect of certain Westpac branded loans that were entered into by Westpac between 1 January 2011 and 17 February 2018.

The claim alleges that Westpac failed to comply with its responsible lending obligations in respect of these loans.

The claim is for compensation for losses that have been suffered, or are likely to be suffered, as a result of Westpac breaching its responsible lending obligations. This may include capital losses and costs associated with entering into and servicing the loans. The claim is also seeking orders to prevent or reduce the loss or damage suffered, or likely to be suffered, as a result of Westpac breaching its responsible lending obligations.

It is not possible to be more specific at this stage.

Registering for the class action will not expose you to any out of pocket costs. Unless and until there is a successful outcome, all costs will be borne either by Maurice Blackburn or the litigation funder, Harbour.

Courts commonly make orders requiring class members who recover compensation through a class action to make a contribution from that compensation to the legal costs and/or funding costs involved in running the proceeding. If the Court makes orders requiring class members to make a contribution from any compensation that they receive to the legal or funding costs of the proceeding, this will not exceed the amount of compensation received and you will not be left out of pocket as a result.

Maurice Blackburn is seeking:

  • compensation in respect of losses suffered, or likely to be suffered, by group members as a result of Westpac breaching its responsible lending obligations. This may include both capital losses, costs associated with entering into and servicing the loans.
  • orders to prevent or reduce the loss or damage suffered, or likely to be suffered, by group members as a result of Westpac breaching its responsible lending obligations.

It is not possible to be more specific at this stage.

Nothing.

Harbour Fund IV, L.P. will pay any costs order which may be made against the class Representative (in Australia, the losing side in litigation is typically ordered to pay a proportion of the winning side’s costs) and will provide any security for costs ordered by the Court.

As a member of the class (and not the class representative, in whose name the case will be brought), an adverse costs order may not be made directly against you in respect of the class action.

Harbour Litigation Funding Limited is a leading global funder with hubs in the UK and Asia-Pacific. Further information can be found at https://www.harbourlitigationfunding.com/

You can complete the registration form without retaining Maurice Blackburn or entering into the Funding Agreement with Harbour. The registration is an expression of interest, which does not oblige you to participate and also does not guarantee that you will recover any compensation.

At a later stage, you may be asked to enter into agreements with Maurice Blackburn and with Harbour in order to participate in this class action. You will have the opportunity to review those agreements, seek independent advice and decide whether you want to enter into the agreements and continue to be part of the class action.

If you are bankrupt, or have been bankrupt, your ability to participate in the class action against Westpac may be controlled by your bankruptcy trustee. At this stage, you are permitted to register for the class action however you will also need to provide details of your bankruptcy trustee (and/or the details of the trustees for any of your co-borrowers that you are registering a claim for). We recommend you also contact your trustee and notify them of the class action.

A reverse mortgage is a type of loan that:

  • does not require the borrower to make repayments on the loan (including interest repayments) until a later time, such as when the home is sold, vacated or the borrower dies;
  • allows borrowers to borrow using the equity in their homes as security;
  • is not a bridging finance contract,
  • are generally a more expensive form of loan with the interest compounding over time and added to the loan balance; and
  • is usually only available to seniors.

If you have entered a reverse mortgage you should have received the following before entering the loan (1) projections that related to the value of the reverse mortgaged property, and your indebtedness over time; (2) a printed copy of the projections; and (3) a ‘reverse mortgage information statement’. If you are still unsure as to whether or not your Westpac Loan is a reverse mortgage, please contact Westpac.

Because Westpac has different obligations to customers entering into reverse mortgages, if you had a reverse mortgage, you are not eligible to register in the class action.

Yes. Registration is an expression of interest, which does not oblige you to participate.

At a later stage, you:

  • may be asked to enter into agreements with Maurice Blackburn and with Harbour in order to continue participating in this class action and you will be able to decide if you want to change your mind at that stage.
  • will also have an opportunity to opt-out of the class action and further information will be sent to you about this process.