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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22168
Experience:  37 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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I was wondering if you could recommend a professional (a

Customer Question

Hi there
I was wondering if you could recommend a professional (a financial planner or legal expert) who would be able to review a complaint that I am making to the banking ombudsman about some issues I have with my bank and particularly two guarantees they enforced upon a trust for which I am a trustee and beneficiary.
I am not seeking a free service and I'm happy to pay required fees.
Your assistance would be appreciated.
Submitted: 5 months ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 5 months ago.

It would be helpful if you could tell me the sort of issues that are at stake. If for example you are questioning the interpretation of the guarantee, you would probably need to see a lawyer with banking experience. If the issues are about enforcement against the trust, then a lawyer with trust experience would be useful. If it is a calculation of the money which the bank is seeking to enforce, then probably a chartered accountant would be better. So a little more detail of the specific issues would help me identify someone.

Customer: replied 5 months ago.
Hi Chris
Thanks for the reply. Your queries are appropriate.
The allegations I make against the bank are definitely matters at law. For now I choose not to address any rectification rights the trust has against the debtors. This may be an avenue pursued later but at this stage the trusts issues are with the bank and their acts of misconduct which it has been recently discovered vitiated the guarantees in numerous ways which essentially made their enforcement of such contracts unlawful and entitles the trust to damages (so I allege).
Due process has been followed with a complaint being made to the bank. They have responded by rejected all of the trusts assertions. I maintain all of the same complaints (except one, see below). It is uncontested that the transactions involved are consumer credit contracts (as per the CCCFA at the time), and I allege failure even to this date in the trust being provided with proper disclosure, thereby prohibiting enforcement. Conditions precedent to drawdown of the underlying loans were disregarded completely by creditor and debtor and this resulted in material adverse alterations to the guarantee terms outside the purview of the contracts originally agreed upon, therefore voiding them altogether. The trust contacted the bank post granting of one guarantee but prior to it receiving the principal loan docs, the bank advised that the guarantee was not in effect, a clear statement was given that the trust sought to cancel the guarantee but despite this the following business day the same bank staff member moved heaven and earth to find the loan docs, execute the loans and therefore put the guarantee in effect. I obviously don't have to tell you how this was wrong. Also trust funds were deducted to create a security deposit in lieu of one guarantee and although required to credit an account in the trusts name it created one trustees personal account resulted in a loss and unjust enrichment. I allege oppression under the CCCFA and require a reopening of the contracts and remedy to the trust. One other thing that I've alleged is that of undue influence by one trustee over the other and rely on the principles of "Etridge" in doing so. It's important that the Banking Ombudsman receives and makes a ruling on these complaints. It has the ability to pass matters onto the court if it's appropriate. If it goes to court litigation will likely be cost prohibitive for the trust vs the banks inevitable defense and limitless budget. I need advise as to whether I remove the undue influence argument as it may start to tip matters into the "complex legal question" category and mean the BO sends it to the HC instead of being willing to rule on matters which are otherwise relatively simple consumer and contract law items. About $175k at stake.
Expert:  Chris The Lawyer replied 5 months ago.

That is definitely a legal issue rather than an accounting issue. But it does appear to relate to conduct of the bank in the course of the lending transactions, and appropriately dealt with by the banking ombudsman. I am not sure that I have ever seen a referral by them to the High Court, and my impression of the way they work is that they would either try to resolve the issue, initially by mediation, and then make a ruling. I am not sure they would send this off to the High Court however but if they do not agree with your complaint, they would say so and leave you to litigate if you were in a position to do so.

Undue influence is a difficult test. It requires a very substantial overbearing of someone who is vulnerable, perhaps due to medical issues or not being very sophisticated.

Banks are very reluctant to cancel guarantees once they are in place. Any move to reduce their perception of security for the lending is generally resisted. So once the documents are signed you are generally stuck with them. There can be defences in relation to a guarantee where the guarantee was altered, but as you likely know, the bank lending documents are extremely thorough and very much on the banks favour in all issues.

I hope that is a useful start. Most any commercial lawyer could give you a detailed opinion on your specific complaint. I can suggest some names if you want

Customer: replied 5 months ago.
Thanks for the advice. I am very aware that the banks standard forms are polished and attempt to be watertight. But even in both cases here they have failed to comply by their own "indulgence" clauses by not registering, let alone setting out in requisite 'writing' any of the variations to the contracts. Also whilst they rely on their "acknowledgement" clauses the blatant floughting of their disclosure obligations would likely incur the dismissive wrath of even the most rigid of judges (imhao).
Your comments regarding UI are duly noted and agreed with. Etridge almost mirrors this situation and even at a minimum display the banks complete failure to insulate themselves from such an allegation now.
If you know of a Solicitor that has had any experience in these matters I would appreciate your advice. This has been a matter for which research has been hard. Perhaps associated with the fact that financial institutes are Google best customers?? Forgive my suspicious mind.
Btw, is it possible to make this conversation incognito for the time being. I have clearly relayed some info which hasn't exactly kept the trusts powder dry per say.
Expert:  Chris The Lawyer replied 5 months ago.
This can be made confidential if you wish.
The failure to make disclosure is seldom a deciding factor as in my experience the judges don't regard this as a crucial factor. The law on this is ineffectual and not what will win your case although you should raise this in the context of poor behaviour
Expert:  Chris The Lawyer replied 5 months ago.
I can post some lawyers names if you confirm the city
Customer: replied 5 months ago.
Thanks, ***** ***** I recognize the courts allowing what seems to be called 'restorative disclosure' though I can only find its application in cases of lunatic principle debtors refusing to pay their mortgages on the basis of a typo.
I'm based in tauranga, but frequent Auckland regularly and Hamilton is a short drive.
Expert:  Chris The Lawyer replied 5 months ago.

Either one will have someone who can help

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