Bank's Sleuth: Who Told The Staff?
Sydney Morning Herald
Wednesday June 14, 2000
When a loan held by computer software company PC Extras with the State Bank of NSW (later bought by Colonial) grew to $850,000 in 1992 the bank appointed its own investigative accountant to check the books and report back.
The appointment of the accountant was to be a discreet exercise so that the company's staff and customers would not become rattled and leave. But almost as soon as Mr John Vouris from Star Dean-Willcocks arrived at PC Extras' offices in late June 1992 the staff went into huddles, their sales efforts dropped and some left.
By February 1993 Mr Vouris had become the receiver to PC Extras. Its director, Ms Lynne McDonough, says that in the process the company she says was worth about $3 million before his arrival was rendered worthless.
Now Colonial wants its money back. The overdraft and a personal loan extended by the bank have blown out to $1,850,579.43 and the debt is ballooning at the rate of $718 a day. Colonial wants to exercise its powers under the mortgage and seize the underlying securities. Last year it won possession of Ms McDonough's elderly parents' home, bought by them with a war service loan and almost paid off. The parents went guarantor for one of Ms McDonough's loans and have lost their home although the bank says they can live in it until they die.
Ms McDonough signed an all-monies mortgage which the bank's senior counsel, Mr Martin Einfeld QC, said made her liable for all monies signed up at the time and into the future.
Ms McDonough has filed a cross-claim claiming that the bank owed her a duty of care as well as an equitable duty. The bank denies this, saying no such duty exists under the loan agreement or the mortgage document.
At issue is whether Mr Vouris' appointment by the bank as an investigative accountant, rather than the external auditor that the staff was told he was, caused the company's staff to lose faith in the company, its customers to desert and the valuation of the company to evaporate. Mr Einfeld said there was no evidence PC Extras was ever worth $3 million and there were various other valuations, including $1.4 million.
Mr Murray Aldridge QC, counsel for Ms McDonough, said Colonial was aware of his client's refinancing proposal and also aware of the impact of a receiver's appointment on the business, but went ahead with its strategy.
At issue is who told the PC Extras staff about the bank's involvement in the appointment of Mr Vouris. Was it the bank, was it Mr Vouris, or did the staff itself twig that he was not merely an external auditor?
The hearing continues.
© 2000 Sydney Morning Herald
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