Nexus - 0211 - New Times Magazine-pages

Page Content (OCR)

1990, until the amount is paid." The Credit Act 1985, Section 81(b) makes the point that "a person being a mortgagee under a mortgage relating to a reg- ulated Contract shall not, subject to Subsection (2) assign the whole or any part of his rights as a mortgagee under the mortgagee to "a person other than a licensed credit provider or an exempt credit provider to whom he has assigned his rights under the Credit Contract". At a Reserve Bank conference held in Sydney and Melbourne in May and June of 1990, there was advice given by the Reserve Bank on setting up Securitisation Vehicles. The following points are worthy of attention:- (a) At the heart of Securitisation is the Sale of Loan Assets by a Bank. The originating bank often continues to adminis- ter the loans, collecting repayments, keeping the accounts, renegotiating doubtful debts etc, as if it were still the owner of the loans. Efforts must be made to distance the Bank in the eyes of the investor from the obligations backed by the Securitised Assets. Otherwise even though the bank has no legal responsibility it might face a ‘moral’ or commercial risk in the form of obligations to investors in the securities if the underlying loans were not repaid. (b) The Reserve Bank's overriding objective in framing a policy on bank securitisation schemes will be to ensure that before a bank is relieved of the obligations to hold capital against securitised assets their ownership is so clearly dis- tinct from the bank that no residual credit risk remains with the Bank. (c) We will require that the securitisation investment vehi- cle not be the bank itself nor use a name that suggest a rela- tionship with the Bank. (d) Any ongoing financial dealing with the bank and the securitisation vehicle would need to be on a strictly arms length basis." (e) We would not wish to see the proportion of securitised assets sold by a Bank ‘but still under its administration become large relative to the Bank's remaining book of loans’. have been numerous court cases, for which I have been required to travel on all-night trains or busses to Sydney for hearings, and then return home straight away. I find it amazing that I have not seen or met our new mort- gagees. I have been put in the witness box in court and humiliated before the Court by Silkdale barristers, and have even been questioned about chasing agents from Silkdale off the farm with a gun. This is incredible, because there has been no detailed inspection of the farm by Silkdale agents, nor has anyone been chased off the farm. As a result, the local police are keeping a file on us, and they have been recommended not to issue us with a shooter's license." When the case went to the Supreme Court of NSW on 28th January 1991, Charlie was successful in being allowed to join Silkdale Pty Ltd and the State Bank of NSW together in a cross-claim. Then in another hearing on 14th February 1991, Silkdale was successful in getting a judgment and an order for pos- session of Charlie's farm. Charlie appealed, his case was heard in October 1991. He lost the appeal. Finally, Charlie appealed to the full bench of the Appeal Court (3 Judges). Mr John Spender QC, (ex-Shadow Attorney General for NSW) represented Charlie's case, LongLeys Co. Pty. Ltd., VS Silkdale Pty Ltd, AND WON! This decision overturned the two previous decisions, and allowed Charlie to submit his costs as well. This was a landmark court case - its precedent, if pursued by other brave farmers, could have far reaching conse- quences. The business of creating money out of thin air, via the stroke of a pen, or the punching of computer keyboards - has got to be understood and stopped. Is it all a plot to drive independent farmers off their farms, so the land can be sold to multi-national corporations, or is it just that banks and finance companies enjoy putting the boot in? When Charlie received the notice from the firm of Sydney solicitors (who happen to be considered one of the top legal firms in the country), a letter was enclosed from the bank, acknowledging the receipt of $1,000,000.00 from a compa- ny called Silkdale Pty Ltd. This company (Silkdale Pty Ltd) was demanding that they be paid over $1.5 million within seven days, or they would commence action for the seizing of Charlie's assets, the eviction of his family, and the sale of his farm. Either way, the case of Long Leys vs Silkdale reminds us that David beat Goliath, and Charlie certainly looks as if he has beaten the banks. & GROUPS RECOMMENDED BY CHARLIE KERR TO CONTACT FOR MORE INFORMATION ¢ Australian Borrowers Association PO Box 93, Tottenham. NSW 2873 (068) 937 248 ¢ Allan Richard Jones PO Box 245, Concord West NSW 2138 ¢ Citizens Electoral Councils (CEC) PO Box 221, Coburg Vic 3058 Phone (03) 384 1116 Again, in Charlie's own words, "A firm of solicitors in Double Bay, Sydney were contacted, and after milking us of $10,000.00 we were given the disappointing decision that there seemed little that could be done. Not to be outdone, I got in touch with Mrs Pat Boyd, from the Australian Borrower's Association, a consumer support group with several legal contacts. As a result of our discus- sions, a land mark case against Silkdale Pty Ltd now exists. It is also very interesting to note that Silkdale Pty Ltd was incorporated on 17th May 1990, and its principal activities are listed as ‘Property Management & Investment’. Since the battle for possession for our prize asset, there ¢ Australian Borrowers Association PO Box 93, Tottenham. NSW 2873 (068) 937 248 ¢ Allan Richard Jones PO Box 245, Concord West NSW 2138 18¢NEXUS DECEMBER-JANUARY '93