The Unpleasant Truth About Australian Banking

Commonwealth Bank

Neil Hermes Story

My name is Neil Hermes. This is my story relating to the bank’s misconduct and its devasting effects to my family and life.

In 2007, I signed a loan contract with Bankwest in order to purchase a tourism property at Jervis Bay on the south coast of NSW. This was an important tourism property, and I was borrowing 50%, which is normal in the tourism industry.

It was not until April 2009, that Bankwest required us to change the way we operated the business and appoint new lawyers and accountants, and required us to provide the bank with a new valuation. This meant the bank breached the loan contract and treated my wife and me very disrespectfully. This was unacceptable as we always had a good record with the bank and had always paid our interest on time.

The changes forced on us by the bank destroyed our business and was served with a demand by Bankwest, which meant I was bankrupted. I cannot believe that a major bank could treat its customers so poorly when there were provisions in the loan contract to protect small businesses and people like me.

In October 2021, I wrote to Commonwealth Bank again and asked it to review my case and find my missing securities. Again, the bank did not act in good faith which concerned me. Until recently none of Commonwealth Bank’s employees could deal with disputes that should have been addressed as services out in the 2004 Code, which was not included in the documents handed to me.

This is the details of my experiences with the bank.

Since 1991, I have operated a successful tour business in Australia titled Discovery Ecotours. The business ran tour operations across three locations at Ayers Rock, Darwin/Kakadu National Park, and Jervis Bay.

On 23 September 2002, my company (formerly Australia Ecotours Pty Ltd, Discovery Ecotours Holdings Pty Ltd, Discovery Ecotours (QLD) Pty Ltd) was registered as a Proprietary Company with the Australian Securities and Investments Commission (ASIC).

My company had a lease-to-buy contract for the purchase of staff headquarters and depot in Rapid Creek Darwin.

On 12 February 2007, my company purportedly (in its own capacity or in the capacity as Trustee) acquired the leasehold over property ‘Christians Minde’, Sussex Inlet, Commonwealth Territory (surrounded by NSW), Jervis Bay for $1.4M with Bank of Western Australia Limited (‘Bankwest’) providing $810,000 loan towards the purchase. The property contained Northern Guest House, Self-Contained Flat, Southern Guest house, Manager’s Cottage, Derelict Flat, Boatshed, Workshop/Storage Area, and Grounds.

The 2007 financial statements showed that the trading income increased from $2.18M to $2.54M from 2006 to 2007. The gross profit from trading increased from $1.879M to $2.21M from 2006 to 2007. The net profit before income tax increased from $236k to $429k from 2006 to 2007. This meant that my company was performing well with growing revenues and profits.

Bankwest provided $810,000 towards the purchase of Christians Minde in February 2007.

It appears that Bankwest was purportedly unaware of there being any Trusts and that my company held the security in a capacity as Trustee thereof. Bankwest also had no fixed or floating charges over any Trusts.

Bankwest sought to rectify the Credit Risk Review findings with the recommendation, among other recommendations, requiring a 3% Penalty Rate above margins to apply until I provided the financial statements clarifying the Bank’s facility and corrected Debtor’s name.

Bankwest’s Credit Risk Review indicated that general account conduct had been unsatisfactory over the preceding 12 months, that the loan could be high risk or impaired and that the credit rating has deteriorated.


Martin Darcy, at the time, was a 50% shareholder and Director of my company. As per the Credit Risk Review, he resigned as Director and requested that his Guarantee be released. Bankwest declined to release Martin Darcy’s Guarantee considering he was still a shareholder.

On 13 March 2008, Bankwest provided a loan extension to the Company for $168k to part purchase Odyssey Tours. Bankwest noted my company’s excellent relationship, record, company structure, and reporting.

On 8 October 2008, Commonwealth Bank acquired Bankwest.

In December 2008, my company began its internally funded $500k improvement plan for the Resort.

On 24 April 2009, Bankwest issued the Company with a Notice of Breach of loan conditions.

In June 2009, on the back of the Bankwest Credit Risk Review and pressure to reduce loans, the Company commenced looking for alternative lenders to refinance the existing Bankwest loan facilities.

For the year ended 30 June 2009, my business turnover was $2.72M, and recorded a net profit of $450.5k. The turnover and net profit in 2007 were $2.54M and $429.5k respectively, illustrating the Company’s continued strong financial performance.

On 6 August 2009, I received Commonwealth Bank’s Letter of Offer for a $850k facility to payout Bankwest and for resort improvements. On the back of the offer, my company makes financial commitments for further resort upgrades ready for the 2009 summer season.

On 26 August 2009, Commonwealth Bank withdraws its loan offer, which was done so at the direction of Bankwest. Due to the Commonwealth Bank withdrawing its loan offer, resulted in significant losses due to financial commitments on the Resort upgrades along with losses from summer season deferral.

At the end of 2009, due to significant pressure from Bankwest, we suffered from:

  1. cost of numerous meetings, phone calls, and emails;
  2. cost for numerous updated accountant reports;
  3. cost for valuations;
  4. default charges and interest;
  5. the opportunity cost of seeking alternative finance;
  6. cost for changing accountants;
  7. losses from lost trade in the 2009-10 summer; and,
  8. the significant emotional toll on my family.

On 31 March 2010, due to Bankwest pressure and Commonwealth Bank pulling refinance funding, I had to place my company into voluntary administration.

As a consequence of the voluntary administration, valuable exclusive licences for tour operations at Ayers Rock, safari campsites in Kakadu National Park, and safari campsites in Litchfield National Park were lost.

From mid to the end of 2010, we received demands for payment from Commonwealth Bank for loan fees for the withdrawn offer in August 2009.

On 31 January 2011, I received Bankwest’s Demand for Payment for $1.16M, even though my business was in administration and the Christian Minde leasehold and business were owned by my company.

On 1 February 2011, due to Bankwest demands, I put my family home on the market for sale. Two days later, I made a formal offer to Bankwest, via my lawyers, but Bankwest did not respond.

On 26 March 2011, under significant financial duress, I accepted an offer for my family home.

On 1 April 2011, the administrator had Christians Minde valued, with a resultant value of $1.1M. Only two weeks later, I went bankrupt. In a run-down state and with no trade the administrator then sold Christians Minde for $740k.

On 21 October 2012, ASIC deregistered my company.

On 7 May 2018, I submitted a complaint to the Australian Banking Royal Commission, then on 18 May to Commonwealth Bank and Bankwest.

On 16 July 2018, Commonwealth Bank and the next day Bankwest rejected my compensation claim. A Bankwest employee told me that it influenced the Commonwealth Bank refinancing decision and that no refinancing would be permitted by Bankwest from any other source. It was the group organisational structures that placed the debt facilities in breach, even though there was no financial default. The group organisational structure was the same at the time of original finance (February 2007) and at loan extension (March 2008), and it was Bankwest’s incompetence that created the debt facility breach in April 2009.

Since then, I have filed many complaints against the banks, AFCA, and other regulators. Our matters with Bankwest and CBA are still open today.

We now have little to no assets because the Bankwest and Commonwealth Bank:

  1. provided loans without considering the overarching structure of the business and how it interacted;
  2. created debt facility breach by way of not being a prudent and diligent lender and overall incompetence due to a lack of understanding of the overall group structure;
  3. bullied, intimidated, and put undue pressure on us;
  4. breached the loan contracts by withholding documents pertinent to our rights;
  5. did not act in good faith or ethically when influencing refinancing, which caused material losses in lost trading, and under sale of assets; and
  6. caused material financial losses and irreparable reputational damage.

The forensic accountant’s financial loss report states that the result of the assessment of my net past financial loss is $17.8M on a pre-income tax basis.

I attempted to explain the serious allegations of misconduct and practices by these banks which were more serious than the practices by Bernie Madoff, who was America’s greatest fraudster. However, I have not received any response nor an explanation of why the banks destroyed my business and my family’s financial lives. I will still keep going filing complaints until the banks provide me with fair compensation and an apology.

I have also contacted other small businesses and farmers who were suffering from the bank’s misconduct and we have reviewed the relevant documents which support our points:

The 2004 Code of Banking Practice has been found to not meet the Internal Dispute Resolution (IDR) procedures in particular when a customer wants to resolve disputes free of charge because the ASIC guideline which we now know was ASIC Regulatory Guide 165 (2001) which the bank must comply with already having been omitted.

The bank did not meet the timeframe as set out in clauses 35.3 and 35.4, nor did it provide us, complainants, with written reasons (clause 35.1(d)).

The bank did not prominently publicise the Code in branches (clause 37.1(a) especially in regional and rural areas (as noted in the CCMC’s Bulletin 4).

The bank did not meet the standards in AS 4269-1995 Standard (clause 35.1(b) nor could they comply with clause 37.2a.

We expect the bank to meet these requirements services in clause 2.1(b)(i), especially as banking services which are defined as ‘any financial service or product provided by the bank to you’.

We did comply with the definition of small businesses, as stated ‘a business having less than 20 fulltime employees and equivalent people’. Therefore we believe the bank did not ‘comply with all relevant laws relating to financial services and products (Clause 3.1), the bank did not provide us information in plain language (clause 2.1(d) nor act fairly or reasonably towards us (Clause 2.2). The bank directors did not ensure its staff and authorised representatives were trained (clause 7(a)(b) and it did not comply with clause 34(b)(i)(ii).

In the event that the bank has not complied with its responsibilities and rule of law, ASIC must withdraw or suspend Commonwealth Bank’s license until its misleading statements and dishonest practices are dealt with appropriately by its directors. I do expect the bank and regulators to comply with the standards, the Code, and all relevant documents so that our rights should be protected.

Craig Perry Story

My name is Craig Perry. This is my story, my worst experience with one of the leading banks in Australia for ages. I was cheated by the bank since we accepted the bank’s first offer for our loan facilities.

In 2010, my family signed a loan contract with Commonwealth Bank at Swan Hill branch as we needed to restructure our family partnership and pay out the loan we had with Elders bank. The arrangement we had with the bank was unsuitable, as it was interest-only and we were purchasing the bank’s commercial bills. We did not understand the bank’s method of financing which we raised verbally with Tim Triplett (Swan Hill Agri Manager) over several years adding further that it was extremely expensive and not in our best interests. However, Tim Triplett simply ignored requests to provide alternative options for funding, stating “sorry it is a commercial world, and this is the only way Commonwealth Bank can do it.’

The bank did not require us to have a business plan, instead, we provided an annual budget for cropping and livestock costs, which meant the bank did not carefully assess our risk before approving our budget.

The unstructured relationship with Commonwealth Bank was inappropriate for the farming business that suffered from significant variations in livestock and grain prices as the market determines farm earnings after the running costs have been paid. It is more serious because seasons varied and there must be sufficient cash reserves, which are part of every agribusiness program but cannot be assumed when budgeting.

On 17 November 2010, we received the bank letter for a temporary increase to the overdraft to $350,000 which required clearance by 28 February 2011. The total debt facilities to $2.85M.

In 2011, the bank introduced covenants that required the sale of land if fiscal targets were not met. The facilities offered by Commonwealth Bank provided no opportunity for principal repayment. Then the bank took unreasonable amounts of time to approve new facilities and temporary adjustments to the Overdraft. The timing of planting barley and wheat crops is extremely important for its success, especially more so in dry years. The delay in funding is the difference between a profit and no profit, which means the difference between income and no income. On 25 April or anything up to 2 weeks prior thereto, is the industry best practice for barley and wheat planting. The bank’s approval dates, which were applied for well before the cut-off date for planting, were delayed.

With a number of variations of sessional finance increasing the overdraft until 20 March 2015, our debt facilities increased to $3.75M.

We experienced drought in 2014 and 2015, which the bank was unwilling to support and its recommendation to us was to require our suppliers and creditors to carry out debts so that the bank did not have to increase our loan. Again, we were the victims of a bank that was not an appropriate agribusiness lender. Around this time, the bank forced us to sign unreasonable forms against our will, inclusive of agreeing to sell land to obtain crop finance. Further, the finance given was not sufficient to run the farm, but sufficient to meet interest payments. The bank advised us to make small creditors carry farm input costs.

In 2016, when we were likely to have a good year and the bank was confident that we could continue financing our term loan, it did not reconsider the way it was dealing with our business. It continued to look at our financial situation in arrears. This year, the bank again did not support by way of funding to plant crops. In converse, it forced us to sign documents that would result in a lump sum repayment on the debt. Further, we received support from creditors, enabling the planting of crops and a very profitable year.

In early February 2017, we requested crop finance from the bank, to ensure adequate timing of funds for April planting. The bank took until 30 June to offer a $500,000 facility for crops, two months past the optimal time for planting crops. It wanted to charge a $25,000 fee for the finance and we did not take up this offer, as it was too late to plant seed. It was a great season but due to the time it took for approval of funds from the bank, we missed the opportunity for seeding and the crop was only half-sown.

In 2017, the bank took us to the farm debt mediation which was not an appropriate way to resolve disputes free of charge. At that time, Commonwealth Bank had not provided us with a copy of the relevant documents that would support our loan and any difficulties we face. The Mediator, a former banker, and the bank bullied us at Farm Debt Mediation and the Mediator tried to force us to sell the farm with the bank’s control.

After the mediation in 2017, we had to attend further mediations because, while Commonwealth Bank should have known that it had to comply with the essential elements of complaints handling set out in the AS 4269-1995 Standard.

Throughout this period, the bank’s practices were disgraceful because there were two further periods of mediation, and our debt with Commonwealth bank was less than 50% of the value of the farm.

In 2018, I met with Commonwealth Bank Chief Executive Matt Comyn in Canberra. On the back of this meeting, I attended three additional meetings with him and other senior Commonwealth Bank staff on 7 December 2018, 30 May 2019, and 27 June 2019 to no avail and ended back at Farm Debt Mediation.

In 2019 and 2020, I attempted to outline my loss at Farm Debt Mediation, on the back of Commonwealth Bank’s conduct, totalling $16.9M. The bank denied any wrongdoing and ignored our claims completely. During this time, we missed two good seasons of crop and because of the bank’s actions, we had virtually no cropping income since 2016. The bank forced us to sign a deed of settlement, essentially giving my family no choice in the matter.

From 2015 to 2020, I had to spend $100,000 on accounting, legal, and other independent experts, through various channels trying to resolve our disputes with the bank, which should have been dealt with free of charge as set out in the 2004 Code and AS 4269-1995 Standard.

The bank had a series of misconduct in my case, including:

  1. providing pure asset or ‘predatory’ loans without considering serviceability requirements;
  2. providing short-term high interest-bearing loans not suited to our circumstances, not in our best interests, and not suitable for the underlying assets;
  3. breaching the loan contracts by withholding documents pertinent to our rights;
  4. prejudicing the signing of the Deed of Settlement in 2020;
  5. harassing and intimidating us during FDM; and
  6. causing material crop losses due to unreasonable delays in funding along with disruptive conduct during disputes.

I now believe that all these Commonwealth Bank’s practices should not have happened and that ASIC had a responsibility to protect my rights. I have discussed this with people who attended meetings at Parliament House in 2018 and 2019 and believe ASIC was not an honest cop because it claims it cannot act for any individuals, which has been the case since self-regulation was introduced by banks in 2003.

I believe that Commonwealth Bank had a duty to advise me of my rights under the 2004 Code of Banking Practice and the AS 4269-1995 Standard, which were an essential part of our loan contract. The bank, its directors, and its licensee had not complied with the internal dispute resolution procedure in the Code, which stated banks must resolve disputes free of charge (clause 35.1(a)). The bank and ASIC knew this but were involved in deception by omission when keeping this information from me.

The deception by omission occurred throughout my dispute period. The Code, in clause 35.1(b), noted leading legal minds at this time had published the essential elements of effective complaint handling in the AS 4269-1995 Standard. As I did not have access to this document, ASIC took no action when it must have known that Commonwealth Bank could deceive me when I was attempting to resolve my disputes.

I understand that Commonwealth Bank’s directors, according to ASIC Regulatory Guide 165, were responsible for causing us a financial disadvantage, which is a crime.

It seems that Commonwealth Bank directors and their associates are determined to trust luck to protect them because by omitting ASIC Regulatory Guide 165 (2001) from the Code, the bank profited and cause customers like me a financial disadvantage. This is a massive crime and far more serious than the practices of Bernie Madoff when he was described, in 2009, as America’s greatest fraudster and was jailed for 150 years.

We have obtained evidence that the bank damaged us by not complying with the 2004 Code including:

  • clause 2.1 when it did not provide us with information in plain language
  • clause 2.2 when it did not act fairly or reasonably towards us
  • clause 7(a)(b) when it did not ensure its staff and authorised representatives were trained effectively.
  • clause 35.1(b) when it did not deal with our complaints free of charge
  • clauses 35.3 and 35.4, when it did not complete the investigation or inform us of the outcomes nor did it provide us, complainants, with written reasons (clause 35.1(d)); and
  • clause 37.1(a) when it did not prominently publicise the Code in branches especially in regional and rural areas (as noted in the CCMC’s Bulletin 4).

I have been writing to the bank’s Chair, Chief Executive, and directors during the past 12 months because the bank placed me in a position whereby its conduct was misleading. This was also an act of fraud because the bank’s directors dishonestly obtained profits from misappropriating my business’ funds.

John Wharton Story

My name is John Wharton. I would like to tell you about my experience with my lenders, which committed one of Australia’s greatest crimes.

I was a Councilor in 1991, before being appointed Mayor of Richmond in 1997. At that time, I was managing my family’s farming business with my wife. In 2007, we owned two properties, Runnymede, purchased in 1992, and Yarrabong, purchased in 2004.

In 2007, we had a Bankwest Agri One Overdraft 625-000895-5 with a limit of $750,000, and Landmark debt of $3M. However, with additional Bankwest funds, we could purchase two more properties, Red Rock and Canyon. At that time, it was not easy to service the debt because we had limited working capital.

On 30 June 2008, I was having discussions with Bankwest so that I could purchase Red Rock and Canyon. In July, Runnymede and Yarrabong were valued by Herron Todd White (HTW) at $11M for Bankwest. In August, Red Rock and Canyon were also valued by HTW at $6.3M.

In September 2008, after we purchased Red Rock and Canyon, we agreed to sell Canyon to reduce debt.

Bob Kayes, Bankwest’s Agribusiness Manager, Rockhampton, was managing our account at that time. When we finished mustering Red Rock/Canyon’s 6,006 head of cattle, Kayes said: “You would have missed a few, wouldn’t you? If you can make it 6,606 it will save me having to go back and do another cashflow review.”       

The contract for the Red Rock and Canyon included 4500 branded cattle, so any more was a bonus.

Bankwest knew we only had 6,006 cattle, but Kayes ‘created’ cattle (phantom cattle), so he could have the bank’s loan application approved. Kayes said without additional cattle, the bank would require a full review of the loan application so cashflow was acceptable. It posed a problem for my business because the cash flow provided to the bank was not accurate.

This also put me into a difficult financial position because more debt increased my servicing costs and pressure on cashflows. In December 2009, I received a letter of Facilities Variation from Kayes. It secured the properties and cattle on all four properties.

This became more serious in 2010 because the debt had escalated to $13.7M. During the next two years, we were in a worse position and there was a declining market, the Global Financial Crisis, and floods.

In March, I received another letter of Facilities Variation from Kayes. In April, the bank claimed I had defaulted on the Facilities, and the bank appointed Korda Mentha to carry out an Investigative Report. It cost us $37,000 and did not come up with changes to the existing program. At that time, we had a good line of cattle and had often topped the sales.

Four months later, the bank again engaged Korda Mentha to prepare a Review and required the investigating accountant to prepare a report on our business. It charged us $39,914.42. Taylor Byrne’s report now showed Yarrabong was valued at $1.2M, Runnymede at $5.5M, Red Rock at $3.9M, and Canyon Station at $1M. The valuations cost us $12,850, Gadens’ legal fees were $5,461, and accounting fees of $8,000, which meant the total cost of the review was $66,225.42.

In October 2011, we put Red Rock on the market and Elders estimated it would bring in between $3M to $4M, with no cattle. It was going to be auctioned prior to the end of the year and we receive a lot of interest.

In November, the bank’s receivers moved in and took the property off the market. Elders claimed they had never seen such aggressive behavior from the Receivers Korda Mentha and the Ray White agent, Kevin Currie. When it became a receivers’ sale, the property’s value dropped and with 1200 cattle, it was sold for $2.6M in 2012. This caused us a significant loss of $1.6M. Red Rock sold in the last 12 months for $11M.

We had numerous bank meetings attempting to resolve our differences, but I found the bank, Korda Mentha, and Ray White Rural were aggressive. We employed a Farm Financial Advisor, who previously worked with Government Department to review our books and make an independent offer. It was submitted to the bank but was then rejected. I wrote to the bank and met with the managers in Brisbane and Townsville, but they did not show any leniency.

On 20 December 2010, I signed a Deed of Forbearance hoping to slow the enforcement action before 30 June 2011. We were requested to:

  1. unconditionally sell Yarrabong by 28 February 2011,
  2. unconditionally sell Canyon by 30 June 2011,
  3. provide the bank with a monthly marketing report from 31 December 2010,
  4. direct all livestock sale proceeds to the bank’s overdraft, and
  5. provide copies of monthly accounts from 31 December 2010.

On 30 June 2011, the bank claimed I had not complied with the obligations in the Deed of Forbearance, as Canyon had not been sold and the loan-to-value ratio had not been satisfied. I was selling Canyon to the Qld Government as a National Park, and this process took more than 12 months, as we were dealing with Government, and it was taking a long time. The bank knew this but showed no empathy and moved on us with Receivers and Managers two weeks after the funds went into our account.

In early September, a contract for Canyon was entered into and due to be settled by 31 October 2011. Later that month, the bank wrote to me regarding my ability to meet the ongoing servicing and other requirements. The bank advised me that the sale of Canyon would not remedy my concern and I needed an alternative plan to rectify defaults.

In September and October 2011, Steve Esdale helped me prepare a letter for the bank which provided details of my proposal for facilities extension to 30 June 2015.

On 11 October 2011, Gavin Nolan of KordaMentha replied confirming their engagement to provide an addendum to the Independent Accountants Review of our Group that was conducted in October/November 2010, as part of the bank’s process in considering my offer.

On 4 November 2011, the bank rejected my offer.

On 15 November 2011, the bank appointed Richard Buckby and Robert Hutson of KordaMentha as Receivers and Managers of my properties. The next day, my access to my business bank accounts was suspended.

A week later, Lorin Bishop, Elders, Rural Property Specialist, wrote to me stating the best sale result for Red Rock would have been achieved by continuing the marketing program, which had started two weeks prior. Bishop said the property received favorable interest from initial promotion and, in his opinion, marketing as a Receiver’s sale usually negatively impacted the eventual sale price.

In early December 2011, I was concerned for the welfare of the livestock, which was now under the management of the receivers. I engaged Veterinarian Elizabeth Lynch BVSc, who wrote a letter to examine the welfare of Runnymede cattle based on their proposed transport for sale.

In January 2012, there was a fire that burned for a week through the Canyon untreated, lick was not being distributed on Red Rock, and livestock were not being managed correctly by the Receivers.

On 7 June 2012, I found myself being charged with Contempt of Court on 4 May 2012, in relation to the above matters that were being managed by receivers.

In 2014, there seemed no other way to resolve disputes with the bank and I commenced an action against it for unconscionable conduct by its associate, Bankwest. It changed my budget to justify Bankwest’s 2008 loan. The hearing was set down for 7 days but lasted for 1½ days. I was the only person to provide evidence to Honor Justice Greenwood. My lawyer, Stewart Levitt wanted me to sack him the morning of the Court Case, for lack of effort, but I refused as I needed to get on the stand and tell my side of the story.

We had agreed to a budget for the purchase of Red Rock and Canyon in July 2008 with Bob Kayes, which would have given us a total of 10,000 head of cattle in total between our properties. In late August, Bob Kayes rang me and informed me that they had approved the loan, and we could start mustering Red Rock/Canyon. We immediately began mustering with the sellers in attendance, as the sellers had guaranteed 4500 heads of branded cattle, and once that number had gone through the yards and been ticked off, the sellers could leave the property. Bob Kayes even came up for a few days and participated in the muster. He would have seen how poor in the condition the cattle were from a lack of management. On 4 September my wife and I drove to Townsville from Red Rock, where we were mustering, to sign the final Loan documents, which seemed odd, since we were already on the property and moving cattle off. We signed these documents in a hurry, in our Lawyer Arthur Browne’s office, as we needed to get back to Red Rock that night. Having faith in our Bank manager and Bank, we were under the belief that these documents were the same as our July budget. Our lawyer also witnessed us sign a blank page, which the Rockampton branch of Bankwest asked us to do, and they would fill in the necessary details later. Unknown to us, the bank had changed the budget from what we agreed to back in July with Bob Kayes and included a statement that we had to reduce the debt significantly within 12 months of buying the properties. This would have required us to sell 7000 head of cattle the following year, leaving us with fewer cattle than we originally started with. I refused to agree to such a plan, and that is when we found out about the changed budget. Plus, the inclusion of having to muster 6600 head of cattle, not the 4500 head in the contract.

At the Federal Court hearing with Justice Greenwood, I was the only person to give evidence, and when I provided the 2 differing budgets, which Justice Greenwood showed much interest in, asking me to refer to them again, Gadens walked out of Court. We adjourned for lunch 30 minutes after that, and Gadens called my lawyer during the break and offered to write off all debt. My wife and I were totally exhausted, traumatized, and broke that we accepted it, so we could go home.

There is no doubt that the bank shafted us badly in this process and we lost everything that we had worked so hard to achieve over a lifetime. In the period after my court case, many banks began to write off huge amounts of debt with many of their clients in our region. About 50% of the debt was written off.

We paid $450,000 in legal fees fighting this case with Bankwest and Commonwealth Bank, yet under the law, the Code, and the AS 4269-1995 Standard, which were all part of my loan contracts, disputes had to be resolved free of charge. It surprised me that the bank and its lawyers had not read my contract carefully because, under Code Compliance Monitoring Committee Bulletin 8, they had to tell me that they would comply with the Internal Disputes Resolution procedures in clause 35 of the Code. At no time did they attempt to deal with this. It seems the rules of law did not comply with either the bank or its lawyers.

In 2018, I attended a meeting at Parliament House with other small businesses and farmers who had also suffered damages due to misconduct by these banks. I believed the directors had hidden documents, but ASIC and APRA had not taken any action. It surprised me and other Queensland farmers that throughout this period, ASIC could have suspended or cancelled bank licensees but never protected customers.

In July 2021, I was advised that Commonwealth Bank was operated by officers in Sydney and was therefore an NSW bank. Some of the other Commonwealth Bank farmers told me to purchase a copy of the AS 4269-1995 Standard, which was included in the IDR procedures in clause 35.1(b) of the 2004 Code. The government, regulators, and banks do not meet their requirements under the Code or the Standard.

The Standard represented the interests of the Committee OB/9 Committee members including the Australian Consumers Association (CHOICE); Department of Consumers Affairs NSW; Law Consumers Association (ACCC); and Law Society NSW. It was unacceptable that these organizations did not remove the Standard from the 2004 Code when there was evidence of a scam which is defined as a dishonest scheme, a fraud.

Michael Murphy & Tracey Moore’s Story

Prior to 2008, I was living at Mount Newman (“Newman”), and Tracey was living in Perth. We wanted to purchase a home in Perth for our future.

We discussed this with Commonwealth Bank, and it loaned us funds to purchase an investment property at Newman. This made sense because we had not owned our own home before, and this provided us an opportunity to invest in real estate and purchase a home later.

To obtain the investment funds from Commonwealth Bank, required Tracey to obtain a guarantee from her friend, June Avila, which did not prove difficult because we trusted the bank.

A few weeks later, when completing Newman’s purchase, a house in Perth became available. We asked the bank if we could purchase it for our home, but it meant we now would have two properties, the Newman investment, and home at Mount Nasura, Armadale, Southeast Perth.

In October 2008, Tracey asked June Avila, who had two properties in Perth, if she would guarantee our Commonwealth Bank’s loans. Avila agreed, and we now owned a home at Mount Nasura and an investment property at Newman. However, Avila would have to guarantee both loans.

The funds provided by Commonwealth Bank for the Nasura home had been changed and, without our knowledge, we now had two investment properties. This meant the bank’s salesman misled us.

This was a problem 3 years later when Tracey’s son (Ned) suffered a serious hit-and-run incident and was institutionalised in hospital for almost a year. In 2012, Tracey had to stop working and we found it difficult to continue paying the bank’s interest from the Newman house rent with a single income.

This problem was serious and was caused by Commonwealth Bank’s failure to provide us with mortgage insurance for the loans or the correct type of loan.

In 2016, Tracey was caring for Ned, and I was suffering from poor health. This meant Commonwealth Bank had taken a risk when it did not ask us to sign insurance for the loan when we signed contracts, and now we had to accept the damages that followed.

In August 2021, I wrote to Catherine Livingstone, Commonwealth Bank’s Chairman, and Matt Comyn, its Chief Executive regarding the bank’s practices. Neither responded despite statements that the bank had adopted the 2004 Code, and that compliance with it was mandatory.

In these circumstances, Commonwealth Bank was not a prudent and diligent lender, nor did it comply with the rule of law. Now Tracey and I could not resolve disputes free of charge dispute being a commitment by the bank in both contracts.


And this is our story.

Prior to 2008, Tracey and I worked as fly in fly out mining workers. We were operating large haul trucks and earthmoving machinery at Newman, Western Australia and our gross income before tax was about $200,000.

In September, we purchased an investment property at Trotman Avenue, Newman, for $570,000. Commonwealth Bank’s mobile lender, David Evans, helped us with the application. The bank loaned $600,400.00 without insurance. This meant it approved a value ratio (LVR) of 105% with Tracey’s friend, June Avila, as guarantor. June and Tracey also had a weekend at Pingelly WA, which they owned 50/50.

David Evans said that he would use our personal details from the Newman loan for the Mount Nasura loan application. We did not have an opportunity to review the loan documents nor contact a solicitor to obtain independent legal or financial advice. We were asked to sign documents with “yellow sign here stickers”. Given the high LVRs with Tracey’s friend as guarantor, the limit of 80% would have been prudent and diligent for Commonwealth Bank, Australia’s leading lender. The licensee did not recommend we obtain independent legal or financial advice when it did not offer us a home loan insurance policy.

This policy would have covered repayments in the case of injury or illness, unemployment or to pay a lump sum in the instance of a trauma event, terminal illness, and or death. Tracey already had Commonwealth Bank’s care plan insurance policy, set up by our self-managed fund. However, when Evans and the bank were preparing our loans there were multiple errors, and when we identified those errors, the bank took no action. The errors included incorrect employment details, inconsistencies with dependents and child support payments, the incorrect type of loan, changed marital status, and misrepresentation of asset value used in the loan application.

The Commonwealth Bank’s loan provided for Mount Nasura was a Viridian Line of Credit (“VLOC”) with interest only and not meant to be an investment loan. It was for our home. Therefore, required a primary residence principal and interest (“P&I”) loan. Without independent legal or financial advice, the bank sold us a VLOC interest-only loan, and we discovered it was more expensive than a comparable P&I loan.

In February 2011, Tracey’s seventeen-year-old son was a victim of a hit-and-run incident, leaving him with a severe diffuse axonal brain injury. He required twenty-four-hour care for the rest of his life. We took time off from work to assist with his recovery and rehab. Tracey and I then suffered post-traumatic stress disorder (PTSD) and could not continue being fly-in and fly-out workers.

In 2011, we received an offer for our Newman property $810,000. We accepted it, but we only had $180,000 after paying out the Newman loan. We used this to cover costs for the Nasura loan, for supporting Ned, and to cover our living costs.

We reached out to the bank for assistance with the Nasura Loan, due to our changed circumstances. The bank provided a three-month payment holiday but did so on the Pingelly loan incorrectly. After multiple calls to the bank, we continued to take payments for the Nasura loan, which then led us to make our first complaint with the Financial Ombudsman Service (FOS).

At the time we were out of work and caring for Tracey’s son, we were receiving gratuitous service payments from Insurance Commission of Western Australia (ICWA), whilst Tracey’s son’s compensation matter was going through the courts.

On 14 December 2012, we applied for financial difficulty assistance with Commonwealth Bank. It took the bank ten weeks to respond to us, for which the temporary repayment variation was provided.

In 2013, Tracey’s son received monetary compensation from ICWA for the incident, with a Court Ordered Trust (“Trust”) enacted to manage the monies.

In March 2014, Tracey and I went to Commonwealth Bank in Maddington to change the Mount Nasura loan from a Viridian Line of Credit to a standard variable home loan in 2014. The Commonwealth Bank staff member, Rose Shepis, told us that we had probably paid about $200,000 too much on the line of credit. It was not a lump sum but just what had been accumulated through monthly payments on the loan.

She is then arranged for the VLOC to be switched to a variable rate home loan in March 2014, with the opening balance of Complete Home Loan Account Number 777519557 (“Complete Home Loan”) of $570,000.

In early 2015, I found a local job but was made redundant in late 2015.

In January 2016, I suffered from a heart attack, for which due to the stress from the fallout from Tracey’s son’s incident along with the bank’s disputes and issues.

In October 2016, we applied for financial difficulty assistance. The bank granted a three-monthly repayment deferral. Again, in January 2017, we applied for financial difficulty assistance and the bank granted another three-monthly repayment deferral.

In October 2018 Tracey and I attended a round table meeting with Clare O’Neil MP and Matt Keogh MP, which arose out of the Royal Banking Commission. As a result of that meeting, our second dispute through AFCA was started. AFCA found in favour of the bank, without explaining the bank executives and directors had probably sold us predatory loans, which is a crime.

On 2 November 2018, AFCA ruled in our favour and ordered Commonwealth Bank to pay us each $500, by way of loan credits, per case 528696.

On 27 September 2018, we emailed Matt Comyn Commonwealth Bank’s Chief Executive, with further complaints. On 28 November 2018, Commonwealth Bank Alexandra Colnan replied to the email noting that they had reviewed our concerns but would not be investigated due to similarities with prior case 528696.

In December 2019, we filed a complaint with AFCA with case 609992, raised the following issues:

  1. Commonwealth Bank’s decision to initially approve the VLOC in 2008;
  2. Commonwealth Bank’s actions when it changed the VLOC to variable rate home loan and whether it complied with its responsible lending obligations in 2014; and,
  3. Commonwealth Bank’s management of the new home loan including the current balance owing and the date repayments are made.

On 3 March 2020, AFCA ruled that Commonwealth Bank did not make any errors listed in our complaints.

Therefore, Commonwealth Bank did not have to pay us any compensation or take any further action in relation to the matters we raised.

Furthermore, AFCA claimed that we could pay the loans comfortably based on our incomes at the time of loan inception, this supplicates the question as to why Commonwealth Bank did not recommend a standard variable P&I home loan.

On 10 December 2020, we filed a complaint with AFCA (case 772841) in relation to the bank withholding information and deliberately misrepresenting our personal details on the loan applications.

On 16 February 2021, AFCA wrote to us advising that our concerns raised had already been subject to an AFCA determination (case number 609992);

On 8 May 2021, due to a dispute with the bank, we stopped making repayments on the Complete Home Loan.

On 27 May 2021, we emailed Senator the Hon Michaelia Cash and the Chief Executive and Chief Ombudsman of AFCA in relation to our prior complaint cases 609992 and 772841.

On 27 July 2021, AFCA wrote to us, advising that our determination per 60992 was in favour of Commonwealth Bank and closed and that case 772841 is outside AFCA Rules and as such had been closed too.

In about August 2021 we had a research team review our case. We discovered the Commonwealth Bank’s directors had not instructed their managers to pay the damages in our Financial Loss Report. These damages amounted to $227,417, plus compensation and an apology. The Commonwealth Bank’s directors knew that the AFCA’s advice was deceitful. If they claimed otherwise, there is proof that Catherine Livingstone and her directors did not have to pay the damages, compensation, and apology.

As of the date of this report, the Complete Home Loan balance is around $525,000.

At no time did the Commonwealth Bank’s managing director or directors require their staff to provide evidence that they had appropriately responded to complaints we had filed during the past 15 years. This level of negligence would have allowed us to obtain the justice that you and the bank’s directors did not provide us.

I believe there is a difference between the Commonwealth Bank’s directors’ decision to conceal predatory lending and fraud. In our case, we believe the misconduct by the bank’s directors was intentional. By definition, the bank dishonestly acted to obtain a financial advantage and caused us a financial disadvantage. The silence by the Commonwealth Bank’s directors throughout this disputed period meant we were victims of fraud.

I have filed several complaints to my local bank manager in Armadale since August 2021, and at no time did the bank manager and the directors comply with the 2004 Code, an essential part of my loan contract.

We were suffering from Commonwealth Bank’s decision to have:

  1. failed in being a prudent and diligent lender;
  2. misled and deceived us;
  3. provided VLOC interest-only loan not suited to our circumstances, not in our best interests, and not suitable for the underlying assets;
  4. breached the loan contracts by withholding documents pertinent to our rights.

More seriously, it was not until recently that we understood Commonwealth Bank Chief Executive and Managing Director in 2002, David Murray, was one of the Architects of the 2004 Code.

When Commonwealth Bank adopted the 2004 Code, its directors omitted ASIC Regulatory Guide 165 (2001) from clause 35.1(b). By omitting this guide, the bank intended to commit Australia’s greatest crime. Its Chairman, John Ralph AC, and his directors were not prudent and diligent. This meant we could not resolve disputes free of charge as set out in IDR procedure in clause 35 of the Code.

The directors, including Catherine Livingstone, Paul O’Malley, and others must have known this and should not have caused us extreme pain and suffering when we filed complaints with them. We might consider this was a deceitful act or simply negligent by the bank’s directors since 2003 or was it criminal conduct by the regulators ASIC and APRA.

We are still waiting for the bank to repay our damages, plus compensation and a letter of apology as required under the AS 4269-1995 Standard.

Selwyn Krepp’s story


My name is Selwyn Krepp and I have been trying to resolve disputes with Commonwealth Bank. This has proved difficult.

In 2009, I had two investment properties in Queensland, units located at Cairns and a house nearby. Both investments were in good condition and the Bank required me to use them as securities.

I discussed my concerns with other small businesses that attended Parliament House meetings in August 2018. I noted that they also had concerns that their Banks had not provided them with the 2004 Code of Banking Practice which was an essential part of all loan contracts.

I was experiencing difficulties with the Bank in 2021. On 29 September 2021, I contacted Commonwealth Bank Moonee Ponds’ Manager, James Dargin because, under the Code of Banking Practice, I was entitled to believe the Bank would treat me respectfully. It had to provide ‘effective disclosure of information’ to customers like me and without the Code of Banking Practice, it did not.

Mr. Dargin should have been sufficiently well trained to have ‘an adequate knowledge of provisions in this Code.’ He understood my complaints related to the Internal Dispute Resolution (IDR) procedures in clause 35 of the 2004 Code of Banking Practice but did not explain whether the Bank had complied with them.

In late 2021, I obtained a financial loss report carried out by a professional forensic accountant. On 26 January 2022, I forwarded a copy to Commonwealth Bank’s Managing Director, Mr. Matt Comyn. He did not respond and therefore I arranged to have a copy of it hand-delivered to his office on 1 April 2022.

I asked him to deduct $4.5M that I owed the bank from my damages of $11,080,103 stated in the financial loss report. This should have happened and any further concerns in relation to my associations with Commonwealth Bank would have ceased.

By providing the report to Mr. Matt Comyn, the Bank now had 21 days, or under exceptional circumstances 45 days to complete an investigation and ‘provide written reason for its decision on the dispute.’ Comyn did not meet these requirements.

Background to my case

I registered a company Rakaia Pty Ltd (‘Rakaia’) as a Proprietary Company on 4 October 2005. It held the leasehold business and Management Letting Rights (MLR) of Inn Cairns Boutique Apartments (‘Inn Cairns’), acquired for $2.2M and funded by National Australia Bank Limited (‘NAB’). Inn Cairns is comprised of 38 fully self-contained apartments and management of downstairs car parking and 3 commercial premises.

In late 2008, Jonathan Tobata and I (‘Tobata’) bought all of the remaining share capital in Rakaia. I borrowed $667,100 from Commonwealth Bank, via Better Business Loan facility  (‘BBL 3’), to payout the other shareholders. Knight Frank had valued Inn Cairns, MLR, and the manager’s unit at $2.6M.

During the 2009 financial year, Rakaia borrowed $1,350,000 and $72,500 from Commonwealth Bank and reduced its NAB loans from $2,139,562 as of 30 June 2008 to $775,613 as of 30 June 2009. BBL loan terms were for 12 months although I requested longer-term loans, enabling sufficient time to pay down the principal.

On 6 December 2010, in our capacity as Directors of Rakaia and Guarantors, we received Commonwealth Bank’s Letter of Offer to refinance the BBL 1 and BBL 2 facilities of $1,350,000 and $72,500. We signed these on 31 December 2010. The loan terms were for 6 months and maturity date of 31 May 2011. Security was provided over the whole of Rakaia’s assets and Director guarantees limited to $1,422,500 over my personally held residential property.

On 6 December 2010, in a personal capacity, I received the Bank’s Letter of Offer to refinance the BBL 3 facility of $667,100. I signed it on 29 December. The term was for 6 months and matured on 31 May 2011. Security was provided over the whole of Rakaia’s assets and the Director guarantee was limited to $1,422,500 over my personally held residential property.

On 18 May 2011, I received Valuation Report from Knight Frank, valuing the MLR and Manager’s Unit at $1.9M and $400,000 respectively.

The property, plant and equipment increased from $961,090 in 2008 to $1,087,835 in 2009. Overall, the balance sheet, on paper, remained stable and consistent from 2007 to 2011, with no evidence of Rakaia being not able to meet its obligations.

From May 2011 to December 2012, the Bank extended the existing BBL facilities, with no longer-term options. By the end of 2012, the BBL facilities had been in existence for 4 years.

On 30 March 2012, I received a Finance Proposal from Suncorp Bank to payout BBL 1 ($1,350,000), 2 ($72,500), and 3 ($667,100), along with refinancing a home loan on a personally held property. The proposed facilities for refinancing BBL 1, 2, and 3 were on an interest-only basis, with 4 years terms for BBL 1 and 3 and 30 years for BBL 2.

On 23 January 2013, the Commonwealth Bank issued me notices, advising of actions required to be taken to remedy purported my defaults, with respect to the BBL facilities. Prior to these notices, I had never missed a loan repayment on BBL facilities, nor had any defaults, arrears, or contract breaches. The Bank proceeded to charge default interest, for which I continued to service.

On 7 February 2013, Anthony Jonsson and Gerard Miller of KPMG Chartered Accountants (‘Receivers and Managers’) were appointed by the Bank over the assets of Rakaia, and they a signed Deed of Indemnity relating to the latter’s appointment.

The financial loss report stated the Bank did not act in good faith or ethically in failing to extend the BBL facilities, to allow suitable time for the refinance from it. Instead, the Bank issued default notices and appointed Receivers over Rakaia’s assets.

On 3 May 2013, I received a letter from Commonwealth Bank B M Gordon, following our discussions in relation to the Bank’s notices and defaults which had not been remedied.

On 14 November 2013, I received Commonwealth Bank’s letter, advising that the BBL facilities and offer of forbearance had expired on 31 October 2013. Because the Deed of forbearance was offered and the option to execute remained open, the appointment of Receivers and Managers was not in good faith or ethically, they damaged me financially and emotionally.

The Receivers and Managers rewrote the MLR, which had an unexpired term of 12.5 years, which was less favourable to Rakaia and the Bank consented to the new MLR.

On 14 February 2014, the Receivers and Managers sold Inn Cairns MLR for $1.1M. The MLR was valued previously at $1.9M.

In April 2014, the Receivers and Managers sold the manager’s unit for $180,000, which was valued previously at $400,000.

In May 2014, my 6 units were sold by the Receivers and Managers for $531,000, which was lower than sales at the same time for almost identical units.

During the period Inn Cairns was under the Receivers and Managers’ control, they mismanaged the business, causing significant financial loss, and also received various complaints from patrons. This is evidenced by the large drop in revenues, profits, and occupancy rates subsequent to the Receiver and Manager’s appointment (over the 12 months from April 2013 to March 2014).

To quantify this loss and to make a statement of claim with Commonwealth Bank, a forensic accountant report was commissioned. On 4 May 2015, via my lawyers Nicolaides & Associates, I received Consulting Expert Forensic Accountant Report, from Michael Rosner FCPA, stating that my total estimated loss was $1,414,472.

On the same day, 4 May 2015, Nicolaides & Associates filed a submission with the Bank noting that Trading loss ($258,639); Reimbursements, rebates, and trade debts ($45,102); under sale of M&LR ($935,833); under sale of real property ($288,000), which was totally $1,527,574.

On 11 December 2014, the Receivers and Managers lodged a notification of ceasing to act with ASIC

On 1 June 2021, Matthew Joiner and Bruno A Secatore of Cor Cordis were appointed as Agents for the Mortgagee in Possession over several of my personal properties.

Since February 2013, I have been in dispute with Commonwealth Bank and the Receivers and Managers. I have filed a number of claims with the bank and its Directors, the Financial Ombudsman Service (FOS), ASIC, the Australian Financial Complaints Authority (AFCA), and the Senate, with no success. I have sent more than 35 letters to Commonwealth Bank Management, I received only one response.

As of today’s date, in my own capacity and as guarantor, I have received a number of Notice of Demands from Commonwealth Bank in relation to debts outstanding on BBL 1 and 3 facilities;

On 5 October 2021, BBL 1 facility balance was $2,053,033. On 16 December 2021, BBL 3 facility balance was $1,714,855.

As of today’s date, Rakaia is in liquidation, by Court order, in relation to another matter and has NIL assets. As company assets were sold by Receivers and Managers, my shareholder loan of $935,389 has been lost. The Receivers and Managers and Enforcement (Legal) fees were $345,000 and $196,000 respectively. My costs in relation to this matter were $597,260, for which the bank did not act prudently or diligently.

According to the financial loss report provided to Comyn and the bank’s directors, Commonwealth Bank had:

  • provided pure asset or ‘predatory’ loans without considering serviceability requirements
  • provided short-term high interest-bearing loans, not suited to my circumstances, not suitable for the underlying assets;
  • breached the loan contracts by withholding documents pertinent to my rights;
  • not acted in good faith or ethically when appointing the Receivers, which caused material losses in lost trading, and under sale of assets;
  • caused material financial losses and irreparable reputational damage.

Because of these practices, I suffered damages amounting to $11,080,103 as of 19 December 2021 inclusive of Commonwealth Bank debt and costs.

This information confirmed Commonwealth Bank’s directors did not intend to resolve disputes as set out in the loan contracts I signed.

For your information





This story has been prepared for and at the request of Mr. Selwyn Krepp. In preparing this story, I have relied on the source information provided to us by Mr. Selwyn Krepp and have believed this information is accurate and complete.

I have also supplemented the source documentation provided with publicly available information, where appropriate.


Mobile Blog


Scan QR-Code for Smartphone