The
State of Victoria and the Bracks Government
Given
the origins of the Walters’ arrival and establishment of a
business in Australia, the state of the State of Victoria provides a
complementary dimension to this story.
On
3 April 2001, Carmen Walter wrote to Steve Bracks, Victorian Premier. Said
Walter:
We can not accept that the NAB can be right by Law because we NEVER
defaulted in our obligations towards the Bank. …
We are of the opinion that the NAB has fraudulently disseised (sic)
[dismissed?] us from our freehold and property …
We can not just give up. We need Government support and hope you won’t
deny us our urgent request.
* Tim Pallas,
Bracks’ Chief of Staff,
replied on 20 April:
It is disappointing that the NAB has decided not to continue to support
the business. However, this is a commercial decision of the bank and is
not a matter in which the State Government can intervene. It would be
inappropriate for me to comment on your allegations concerning the
behaviour of the NAB.
Carmen Walter wrote to the Premier again on 9 July.
* In response, Dr Lynne Williams,
Director Economic Policy, Department of Premier and Cabinet,
replied on 23 July:
It is our understanding that many of the issues raised in your facsimile
are currently before the Supreme Court. Accordingly, it would be
inappropriate for the State Government to commence investigating these
issues, as this might compromise the ongoing court proceedings. The
decision of the Court may well have an important bearing on whether
these issues warrant further investigation.
On 4 February 2002, this author wrote to the Premier via his Chief of
Staff Tim Pallas (Jones, 2002):
The essence of your 20 April reply [to Carmen Walter] is the judgement
that the NAB process ‘is [a] commercial decision of the bank and is not
a matter in which the State Government can intervene’. The essence of Dr
Williams’ reply is that ‘it would be inappropriate for the State
Government to commence investigating these issues, as this might
compromise the ongoing court proceedings’.
From my experience with aggrieved banking clients who have attempted to
bring attention to their plight to regulatory authorities or to those in
political office, it is customary to receive a reply comparable to that
received from Dr Williams. I would estimate that the fact of ongoing
litigation is a convenient excuse for inaction on the part of our
elected representatives.
Moreover, the reply of 20 April deserves critical attention in this
case. The Walter family case is emphatically not just of private
commercial concern. The Victorian Government was instrumental in the
Walter family moving to Australia and starting a new business. Mrs Kathy
Portes, representing the Business Migration Programme in Frankfurt, was
instrumental in 1989 in persuading the Walters to make this move. … The
then Albury-Wodonga Development Corporation and Wodonga City Council
were also party to the promises of a rich entrepreneurial environment
favouring those capable of hard work and initiative.
It is clear, however, that the promised environment came to an early
demise in the form of apparent malpractice on the part of their bankers
since 1997, the National Australia Bank. …
The existence of incompetence and unconscionable conduct in key
institutions of society is intolerable. In this case, moreover, the
reputation of the State as a safe haven for economic development is also
at stake. I was amused to read on the web site of the Victorian
Government Business Office that Victoria offers, inter alia:
•
a cost efficient place to do business
•
secure and familiar legal and financial infrastructure and services
•
strong safeguards for your intellectual property
The actions of NAB officers in the Walter case have rendered these
claims inaccurate and misleading. The claims constitute false
advertising, and on fundamental matters relating to the integrity of our
commercial system and, indirectly, our political system. The fact that
the Frankfurt office services a considerable portion of Europe makes the
responsibility of that office in this matter of even greater import.
We still genuflect to notions of justice, and I would like to think that
your office will have an interest in some measure of assistance to the
Walter family in their efforts to achieve same. I leave this matter in
your capable hands, trusting that your office can appreciate the
seriousness of this situation.
* Ian Killey,
Director Legal Branch, Department of Premier and Cabinet,
replied
for the Premier a mere 13 months later on 11 March 2003:
Notwithstanding the encouragement given by the Victorian Government to
the Walter family to move to Australia, it is not apparent that the
State is otherwise “implicated” in the Walter family’s dispute with the
NAB as your letter suggests.
The State was not a party to the Walter’s dealings with the NAB and is
not responsible for the “apparent malpractice” of the NAB that your
letter refers to.
The advice received by the Walter family from Dr Williams is not merely
a “convenient excuse for inaction” but indicates that the State cannot
intervene in a personal dispute before the courts. A concern for notions
of justice must contemplate that private disputes are best resolved
where the facts are ascertained by independent courts and the law
applicable to that fact situation (sic) is applied impartially. This
would not be achieved by the arbitrary intervention of the Victorian
government even if it had the power to do so.
On 24 August 2004, this author wrote again to the Premier via Tim Pallas,
Chief of Staff (Jones, 2004b):
On Thursday 26 August, the Walter family will be unceremoniously removed
from their residence in Wodonga. Possibly, they will also be
unceremoniously deported from Australia.
This event will be the culmination of a process that began when the
Walter family was seduced by the Frankfurt office of the Victorian
Government to relocate as business migrants to the State of Victoria as
an ideal location to do business. …
It is presumably Mr Killey’s job to deal in official-speak, but as an
officer versed in the law he should be aware that the judicial process
involving the major banks and small business customers is characterised
neither by independence nor impartiality.
The dominant court case in the Walter affair, National Australia Bank v
Walter VSC 36 (16 February 2004), produced the standard formulaic
judgement, with Her Honour skirting superficially over substantive
issues (in spite of a 7 ½ month delay between hearing and judgment). …
The NAB’s initial provision of facilities was based on indifference and
probably incompetence. The Walters’ request for a renegotiation of
facilities was met with a top-down imposition of a twelve-month facility
that amounted to an entrapment device. The plug was duly pulled, and the
NAB’s indifference and incompetence shifted to unconscionable conduct.
It needs to be emphasised that payments on the Walter facilities were
not irregular. The Walters were not in default. The business paid its
suppliers COD. But the NAB imposed punitive rates; withdrew the
‘entrapment’ facilities; initiated dodgy red ink accounts which involve
the discretionary allocation of ‘costs’ unbeknown to the customer (a
practice condemned by a Federal Parliamentary Committee in August 2002,
but condoned by the presiding judge in VSC 36); appropriated and
engineered the stripped-down sale of assets under value; and failed to
cater to full discovery of documents in subsequent litigation.
Mr Killey, in his letter of 11 March 2003, goes on to claim that “A
concern for notions of justice … would not be achieved by the arbitrary
intervention of the Victorian Government even if it had the power to do
so”.
Yet when Ms Carmen Walter sought to bring charges of (effectively)
apprehended bias against the judge presiding over VSC 36 in the
Victorian courts … the process was truncated in May of this year by the
intervention of the Commonwealth Director of Public Prosecutions, so
that Ms Walter was not permitted to submit her evidence. Independence
and impartial indeed. …
The stark reality is that the State of Victoria (along with other
Australian States) cannot guarantee secure credit facilities for small
business in its State.
* David Fredericks,
Acting Deputy Secretary, Policy and Cabinet Group, Department of Premier
and Cabinet,
replied on 2 September 2004:
If the Court had found that the Bank was guilty of any misconduct, then
action would be necessary to prevent such misconduct from being
repeated. This would, however, be primarily a federal role as banking is
regulated at federal level in Australia. You are referred to s.51(xiii)
of the Commonwealth Constitution.
The Court, however, dismissed the claim brought against the Bank by the
Walters, and found that their factual allegations were incorrect. That
being the case, it would be improper for the Premier to act upon your
suggestion that some punitive action should be taken against the Bank.
The correct remedy for the Walters to pursue, if they choose to do so,
is to appeal against the judgment to a higher court. I cannot accept
your view that the judiciary is neither independent nor impartial.
I disagree entirely with any suggestion that the Government is
responsible in any way for the failure of the Walters’ business.
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History of Banking Fraud:
The Coming Battle
