IMF Australia has thrown its weight behind a case against Bankwest and according to the publicly-listed litigation funder, more Bankwest claims are likely to arise. “We are getting a lot of applications against Bankwest – predominantly because of the harsh or oppressive conduct they have exhibited towards borrowers,” said IMF managing director Hugh McLernon.

IMF has agreed to fund the action by developer Luke Saraceni, who had borrowed funds from Bankwest and Bank of Scotland (international) for the A$500m Raine Square development. Bankwest appointed receiver firm Korda Mentha to the project in January after Saraceni’s company Westgem Investments missed a A$50m debt repayment on 31 December 2010. Saraceni has alleged Bankwest invalidly appointed Korda Mentha to the Raine Square development and is seeking them to be removed. Since Raine Square was put into receivership at least six more Saraceni-related assets have been put into receivership by financiers, some of which were used as security against Raine Square.

“I have no doubt that the bank’s behaviour was a result of its own financial trouble, which then resulted in Bankwest being bought by Commonwealth Bank,” said McLernon. Bankwest was bought by the Commonwealth Bank in late 2008, at the height of the global financial crisis. The other financier, Bank of Scotland (international), also experienced financial uncertainty during this period and was acquired by Lloyds TSB.

Slater & Gordon group practice leader Mark Walter says his firm has also seen more claims against Bankwest since the GFC. “There has been a spike in claims involving Bankwest,” said Walter.  “I’m aware of a group of clients who have been complaining about Bankwest for a variety of reasons.”
Walter said it was his understanding from various discussions with Bankwest clients that when the Commonwealth Bank took over Bankwest they bought with them new views on loan requirements and the quality of loan holders. “There was a change in the relationship between Bankwest and their clients following the takeover,” he said.

Slater & Gordon’s  Melbourne office is acting for three clients in relation to claims against Bankwest and the Sydney office is also advising some Bankwest clients in relation to some claims, said Walter.

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