Unseen hands that signed the papers

Sydney Morning Herald

Wednesday June 17, 2009

Stuart Washington

A NSW couple who lost their fortune in the collapse of Storm Financial said some of their home-loan documents had been witnessed by bankers they had never met, working from an office in Nambour, Queensland, that they had never visited.In a submission to a parliamentary inquiry covering the collapse of the financial planning firm, Geoff and Heather Stanfield say Storm Financial negotiated a $600,000 loan on their property, which was valued at $1.1 million.They say they signed home-loan documents in the North Sydney offices of Storm Financial. The proceeds were used to invest in a margin loan with Macquarie Bank.Their submission says that ANZ home-loan documents had been witnessed by two bankers based at Nambour, on the Sunshine Coast S. Farrugla and Jason Ernest."We have never seen either of these men," the submission says. "They could not possibly have witnessed our signatures."Copies of the loan documents obtained by the Herald show S. Farrugla appeared as a witness in an ANZ-branded document headed Declaration of Purpose on August 15, 2006. In other loan documents, S. Farrugla states the relevant branch as Nambour.On a different ANZ-branded document stating Applicant/Guarantor Declaration, the Nambour branch manager Jason Ernest appears as a witness signee. It is dated August 12, 2007.In both, the signatures appear directly below the signatures of Mr and Mrs Stanfield.Damian Scattini, a lawyer with Slater & Gordon, which is representing investors who lost money in the collapse of Storm Financial, said bank documents of clients' loans had revealed "all sorts of slipshod behaviour"."In some circumstances banks appear to have defied physics by witnessing documents that they weren't present for," he said."With the Bank of Queensland, with one exception, I have yet to find someone who was contacted by Bank of Queensland."Under clause 25.1 of the Banking Code of Practice, banks take responsibility for assessing the ability of people to repay the loans they are offered.In their submission, Mr and Mrs Stanfield say that while their loan document states income of $10,000 a month, they only had income of $2000 a month when they received the loan.They have put their house in Dural up for sale in the hope of repaying their debts.A spokeswoman for ANZ said she could not comment on individual clients without their permission. A spokeswoman for Bank of Queensland said that because of potential litigation in relation to Storm it could not respond to questions about Bank of Queensland's practices.

© 2009 Sydney Morning Herald

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