The borrower took legal action against Westpac. The court's decision has been released.
The borrower took legal action against Westpac. The court's decision has been released.
A Westpac customer who borrowed $1.2 million has taken legal action against the bank over starting a mortgagee sale process claiming he was in default of his repayments.
Stuart Lobb sued Westpac New Zealand in the High Court at Auckland, with Associate Justice Dani Lee Gardiner delivering her decision onthe interlocutory application last Wednesday, describing the result as a “mixed” outcome for both parties.
The judge gave the background to proceedings, outlining events from 2015 to 2020 over loans Lobb and his wife had taken out, hearing the case on November 13.
In 2015, the Lobbs increased their limit on an existing Westpac loan by $150,000 and then sought to fix the interest on a portion of the loan.
Their borrowing was split into a $1.1m term loan on a fixed interest rate and a $150,000 revolving credit loan on a floating interest rate.
Lobb and Westpac disputed the impact of these changes on the terms of borrowing, hence he sued the bank.
He said that the variation did not disturb an existing 10-year interest-only period agreed on but Westpac said it was agreed that the $1.1m loan only had a three-year interest-only term and not 10 years.
When the loan changed and principal and interest was sought by the bank in 2018, Lobb and his by-then estranged wife defaulted on their repayments, the judge noted.
He failed to get his wife to agree to changes to the borrowing terms so he then asked Westpac to agree to extend the interest-only period and made a hardship application.
But Westpac declined that and then in 2020, the bank called for a mortgagee sale of a property owned by a trust associated with the Lobbs.
This process stopped when Lobb arranged a refinance and redeemed the mortgage.
Lobb then sued the bank, saying it had breached its contractual obligations to him over the loans. It had acted oppressively and breached borrowing terms, making false and misleading representations, he claimed.
Lobb also claimed Westpac was responsible for the publication of two articles on the OneRoof website “that made statements that were allegedly defamatory of Mr Lobb in the context of the mortgagee sale”.
He claimed losses of more than $1.2m.
The judge described the result in the case against Westpac as "mixed". Photo / Carla Gottgens, Bloomberg
Westpac denied all the claims.
Lobb sought internal Westpac staff correspondence and cited information from a bank whistleblower.
“Lobb has provided screenshots allegedly provided to him by a Westpac whistleblower. It is said to show internal Westpac correspondence about issues with the expiry of interest‑only/non‑reducing periods for Westpac Choices Everyday Home Loan accounts,” the ruling said.
But the judge said the screenshots did not provide a sound basis for concluding that Westpac had not discharged its discovery obligations.
Lobb also cited information from Westpac in 2022 when it told him it had erroneously not applied a discount on the interest rate charged on one of his accounts. He was entitled to that as a member of Chartered Accountants Australia and New Zealand.
The error occurred when one of his accounts moved from the fixed to the floating rate in 2018. His allegation was that Westpac had breached undertakings it had given to the Financial Markets Authority relating to its identification of errors in discounting fees for some customers.
“Lobb claims losses in excess of $1.2m, being the additional interest and bank fees he has paid Westpac and a non-bank lender following the refinancing in 2020, and legal fees,” the decision said.
Westpac opposed an application for more information on the grounds that it has provided detailed particulars in its statement of defence that are more than sufficient for him to understand and respond to its position.
The discovery he sought was irrelevant to the claim, or information had already been provided by Westpac and there is no basis to believe additional discoverable documents existed, the bank said.
The judge asked the bank to provide a more explicit statement of defence but dismissed Lobb’s application for further and better particulars and discovery.
She invited the two parties to agree on costs.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
