Friday, 22 July 2011

CBA leave application no problem for Prentice.

VETERAN liquidator and bankruptcy trustee Max Prentice is probably very happy the Commonwealth Bank wants to do the heavy lifting in relation to the King family.

A recent Federal Court judgment okayed an application by the CBA seeking leave to proceed against Gregory Keith King and Kelly Ann King and Mr King's parents in a recovery action in the Supreme Court. Prentice is the younger Kings' bankruptcy trustee.

This is an odd one. The younger Kings had various accounts with CBA, including a home loan account secured by a property in the Sutherland Shire. 

When the younger Kings sold the property they put the proceeds in a CBA term deposit. On maturity they used the proceeds to pay off the home loan account and Mrs King made arrangements to pay what is described in the Federal court judgment as "a slight shortfall". Then the CBA stuffed up.

For reasons not detailed in the Federal Court judgement but described as "in error and by mistake", the CBA treated the Kings' home loan account as one which permitted them to redraw on that account.

Over what's described as a short period of time the younger Kings redrew a sum in excess of $616,000 on the home loan account, which they transferred to one or more of their other accounts with the Bank. Thereafter they transferred these funds to an account held by Mr King’s parents with Westpac Banking Corporation. Party at Mum and Dad's!

Bringing to mind variants on old sayings like "the old block is the spitting image of its chips" and "the tree never drops an apple far from the trunk", the older Kings then transferred all but $116,000 to a separate mortgage account they have with Westpac.

If that were not messy enough the younger Kings are currently residing in a "distant but unknown location" due to threats to Greg King and his family so the issue of the CBA's failure to effect personal service was also dealt with in the Federal Court judgement.

In February, 2011, not long after the CBA home loan account funds were transferred to other accounts including the older Kings' Westpac account, Greg and Kelly King declared themselves bankrupt and Max Prentice was appointed as their trustee.

The founding partner at BPS Recovery didn't oppose the CBA's subsequent application for leave in the Federal Court because the judge ruled CBA wouldn't get a priority over other creditors and that it had to keep Max informed of developments in the Supreme Court proceedings.

Only fair when you think about it. CBA stuffed up. It should pay to correct its share of this issue and ensure the trustee isn't inconvenienced in the process. And it's nice to see fairness occasionally intrude into the insolvency area.

Contact SiN

1 comment:

  1. Do you know what was the outcome of this was?


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