Westpac loans class action

Maurice Blackburn is conducting a class action against Westpac on behalf of persons who entered into unsuitable loans secured by residential property with Westpac from January 2011 and who have suffered, or are likely to, suffer loss.

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The claim alleges that Westpac failed to comply with its responsible lending obligations in respect of loans issued on or after 1 January 2011 and that Westpac entered into loans when the loans were unsuitable for the borrower.

Update on class action progress

On 13 August 2019, the decision of Perram J in ASIC v Westpac Banking Corporation (Liability Trial) [2019] FCA 1244 was handed down by the Federal Court. On 10 September 2019, ASIC filed an appeal with the Full Federal Court against that judgment. The case involved issues that are similar to those addressed in the Westpac Loans class action. We are giving careful consideration to Perram J’s judgment and the appeal to determine the potential impacts to the class action.

In the meantime, the class action is continuing and we are continuing to accept registrations for expressions of interest to participate in the matter. We will also continue to respond to queries from potential group members.

Further, on 4 September 2019, the Court made the following orders by consent:

a) the applicants file and serve an Amended Statement of Claim by 10 October 2019; and

b) the next hearing about procedural issues is scheduled for 29 October 2019.

This update is provided for your information. You are not required to do anything.

Am I eligible to register?

You can register your interest in participating in the class action if:

  1. you entered into a loan with Westpac on or from 1 January 2011 (Westpac Loan);
  2. you entered into the Westpac Loan in your own name (either solely or with someone else) and not on behalf of a company;
  3. the Westpac Loan was secured by a mortgage to Westpac in relation to a residential property that was owned, either solely or jointly, by you;
  4. the Westpac Loan was provided to you for the following purposes:
    1. personal, domestic or household purposes;
    2. purchase, renovate or improve residential property for investment purposes;
    3. refinance credit that had been provided to purchase, renovate or improve residential property for investment purposes.

However, you cannot register if the Westpac Loan:

  • was entered into on behalf of a company;
  • was with one of the following Westpac owned companies: St George, RAMS, Bank of Melbourne and BankSA.
  • exceeded $5,000,000 for the purpose of investment in more than one residence; or
  • was secured by a reverse mortgage.

You do not need to be able to prove at this stage that the Westpac Loan was unsuitable or that you have suffered loss. If you meet the criteria set out above you are eligible to register.

Registering your interest at this stage does not entitle you to claim compensation.

Ultimately, to be a group member and to be able to claim compensation in the action, you will need to show that:

  1. your loan application would have been declined by Westpac's Automated Decision System if either:
    1. your actual living expenses were used, or;
    2. the monthly loan repayments were assessed as the amount which would be required to repay the credit in full over the period after the end of any interest-only period, rather than over the entire term of the loan;
  2. the loan you were given was "unsuitable" because you would not be able to comply with the financial commitment under the loan at all or without substantial hardship; and
  3. you suffered loss as a result of the unsuitable loan.

How do I register?

To register, you must access the Registration Portal here.

As part of this registration process, you will be asked to provide information about your Westpac Loan/s including:

  • loan account number,
  • names of borrowers (and contact details) on the Westpac Loan contract;
  • dates your entered the loans; and
  • the term (duration) of the loan including the term of any interest only period.

Please ensure that you have any relevant documentation available when completing this registration.

Contact us

If you are having difficulties in completing the registration form please contact us 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 on or after 1 January 2011.

The claim alleges that Westpac failed to comply with its responsible lending obligations in respect of loans issued on or after 1 January 2011 and entered into loans when the loans were unsuitable for the borrower.

The claim is for compensation for losses that have been suffered, or are likely to be suffered, as a result of Westpac entering into the unsuitable loans. 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 entering into the unsuitable loans.

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 entering into the unsuitable loans. 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 entering into the unsuitable loans.

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.