Cba, Customer's Long Dispute Goes To Court
Sydney Morning Herald
Tuesday November 9, 1999
The $500,000 loan has blown out to $1.03m plus interest.
Nowra building and steel products manufacturer Mr Tony Rigg had his business forcibly sold by the Commonwealth Bank in June 1994 after a long-running dispute over the management of his accounts.
Despite the bank's sale of the business premises under private treaty four years after his dispute with the bank erupted, Mr Rigg's $500,000 loan has now blown out to $1.03 million plus interest and the bank is seeking to seize his home overlooking the Shoalhaven River in satisfaction of its debt and under the terms of the all monies mortgage Mr and Mrs Rigg signed with the bank.
Yesterday, 10 years after he thought he had come to an arrangement with CBA to repay the loan in two instalments under a deed of settlement after it had blown out to $980,000, the matter unfolded in the Supreme Court of NSW.
The amount has since blown out further and is under dispute.
As evidence of the amount owed, CBA's counsel, Mr Adam Bell, produced a shadow ledger extract of the Rigg loan to the court backing up the bank's claim as to what it says is owed.
Mr Rigg's counsel, Mr Rodney Parker, QC, told the court that after Mr and Mrs Rigg and CBA had come to an agreement to repay the $980,000 loan in two stages, a payment of $380,000 in mid January 1990 and a further $600,000 in November that year, Mr Rigg had set out to refinance his business with the State Bank of NSW.
In early 1990 he had applied for a $500,000 loan with that bank so that he could pay CBA the first instalment. The State Bank had been willing to lend the money but first it needed information.
This proved to be a problem. For a start, Mr Rigg was constrained by the provisions of a secrecy clause contained in his agreement with CBA which meant he could not give a history of the dispute with the CBA loan. And the State Bank needed rental statements for the business premises under the control of CBA which Mr Rigg claims he never received, despite several requests for them.
Without the rental records, as Mr Rigg's former solicitor Mr Paul Donnelly explained, the State Bank would not grant the loan because it needed to assess Mr Rigg's capacity to service it.
After the $380,000 payment deadline came and went, in May 1990, CBA had written to Mr Rigg and told him that he was in breach of his settlement agreement and demanded he repay the entire $980,000 forthwith.
The business premises were sold in June 1994 by the bank by private treaty to a company called Zenix, controlled by a Mr Gray.
Mr Rigg claims that because the building was not auctioned nor advertised, it was not sold at arm's length. He also claims that the building would have fetched more had it been fully tenanted and upgraded at the time of sale.
When Mr Rigg tried to gain access to his old premises to get records he was ``dragged off in a police wagon and charged with entering on enclosed lands", his counsel, Mr Parker, told the court. For this, Mr Rigg is seeking exemplary damages from the bank.
About the middle of 1990 Mr Rigg approached Senator Paul McLean, who was seeking to set up a Senate inquiry into banking issues and in particular borrower complaints about bank behaviour. Senator McLean tabled documents relating to the Rigg loan.
At around this time Mr Donnelly ceased acting for Mr Rigg and Mr Rigg's refinancing attempts ground to a halt.
The hearing before Justice Brownie continues.
© 1999 Sydney Morning Herald
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