Thursday, October 23, 2014
It would seem that the culture and business practices at nab leave a lot to be desired as proven by just three of many examples:
1. There is a petition on ‘change.org’ which highlights the culture of harassment by both nab and its lawyers, especially against people at a special financial disadvantage. In this case it seems nab and its lawyers [Gadens] are harassing their victim and are determined to sell the house of that victim just to satisfy their own seemingly rabid need for foreclosure at any financial or human cost;
2. In an article written about nab and Gadens by journalist Tess Lawrence she said, “Without question, the police should investigate how and why lawyer [Nab’s lawyers – Gadens] made .. a phone call .. and on what authority and on what grounds .. saw fit to interfere with the course of Justice ..” and, from another lawyer during the same case when addressing the victim in a public hallway, “You’re dead” .. “you f…ing bitch”. “The NAB and I will take you down”… “You will have nothing, you will be destroyed”. Charming.
3. In our case, after considerable maladministration and misfeasance, Nab acted unlawfully with extreme harassment and assaultive malfeasance by cancelling all our financial facilities, including our mortgage, and taking great delight in threatening to sell our home within 30 days – all without due cause. The Financial Ombudsman Service agreed with us and found nab’s acts unlawful and awarded contract restoration, damages and compensation. However, we believed the quantum to be insufficient so we are pursuing nab through VCAT. This has been going on for over 3 years with nab losing their ploy to have the case dismissed or shifted to the Supreme Court [which would have been a huge financial disadvantage to us] whilst employing nasty little tricks like delivering reams of documents the night before a hearing [twice] guaranteeing we had no time to read them, let alone understand them. In this instance and once again nab was found to have failed to have acted in a conscionable manner when the Judge agreed that nab’s actions were inappropriate.
As I said, these 3 examples are but 3 of many and clearly point to a culture within nab which has grown, to be what many victims consider, unconscionable and indeed ferrel.
At the heart of this culture is nabs continual refinement and reliance on their terms and conditions, developed at great expense by their teams of lawyers, which purport to give nab extreme power to do what they like and to whom they like. All three examples above clearly point to this malfeasance. In our case [example 3] it was indeed unconscionable malfeasance as nab knew its acts to be unlawful but ignored the law.
I purport that just the act of including terms and conditions nab knows are unlawful and to be read down are unconscionable in themselves.
The key question is, “Can an action or intention to action be deemed as unconscionable if that act or intention is against good conscience but as yet has no victim”. The corollary is that there is no unconscionable intent until someone is affected? [Has the tree fallen if no one sees it fall? – note, yes the tree has fallen!]
Take for example a contract and in the fine print there is a clause which stipulates that one party has the right to terminate the contract if they ‘deem’ any issue they wish a breach of that contract and the contract becomes null and void without loss of benefit to the author of the contract.
An obvious nonsense yet that is a standard term for nab. As a matter of fact, any contract which can be broken at will for no reason is not and can never be a contract because no one could rely on that contract. That is why a lawful process to break a contract is legislated – for example S88 and S89 of the National Credit Code.
Now let’s assume, in the normal run of events, that nab is in a strong position with services in demand and people needing those services. People sign off the contract including the ‘deeming clause’ because they have little choice. Say a mortgage or a credit card contract.
At what point and under what circumstances does the enforcement of the deeming clause become unconscionable and do we even need an enforcement to recognise the term as unconscionable and to be read down?
I believe that it is enough to make such clauses unconscionable even if there is no victim just because it may confuse, coerce and mislead people into believing it is valid. This sort of clause has the obvious intent of doing just that by advantaging the author unconscionably at the expense of others.
Take nab. They have similar deeming clause in their terms and conditions which allows them to summarily terminate an agreement and demand instant repayment of a loan. Yet there are provisions within the Code of Banking Practice, the Australian Consumer Law and the ASIC act which specifically preclude nab from actioning their deeming clause without due process.
So, on one hand we have nab with their deeming clauses and alleged cancellation rights and we have the law on the other stopping or at least modifying the same alleged rights.
As nab is well aware of the law and well aware of the way their deeming clause is inappropriate then isn't the unlawful inclusion of such a clause, by definition, unconscionable because the intent of the clause is to take unconscionable advantage - even if it’s never acted on!
Therefore the precursor to any litigation is whether or not the deeming clause is unfair because the intent of nab is unconscionable.
I would say that any clause which purports to allow one party to just deem a contract null and void to someone’s disadvantage must be read down as it would be unconscionable to leave it there.
Now let’s assume, nab acts on the deeming clause and we have a victim. Mr Victim had a credit contract and was using his ‘card’ for everyday things and accumulating frequent flyer points and paying his monthly commitments. He was late a couple of times but fixed the arrears and all was well and Nab were still charging lots of interest for the privilege. Then someone from nab decided to deem the victim’s card cancelled and the victim had to repay the entire debit within a few days because that’s what the deeming clause said.
This put the victim instantly in a state of special financial disadvantage for at least two very important reasons. Firstly, he had to find the money elsewhere to pay the loan [if he could] and secondly he had relied on the line of credit and instantly had no other immediate access to money to live on or pay bills. In effect he had relied on nab acting conscionably and in compliance with all parts of the law.
Mr Victim complained but nab just pointed to the deeming clause as justification for the cancellation. Nab was well aware of the law but chose to mislead and coerce the victim into believing they had the right.
Now, not only is the deeming clause unconscionable but nab acted on that clause in the full knowledge of its effect on the victim. Therefore the act is also unconscionable as it caused Mr Victim to lurch into a state of special financial disadvantage.
I believe Mr Victim has an actionable case against nab on at least two grounds. Firstly, nab included such a clause with obvious unconscionable intent to mislead and coerce and secondly, nab acted on it outside the known provisions of law.
I would say that pecuniary penalties apply for both inclusion and act and the victim needs to be compensated.
In the article written by Tess Lawrence [example 2] it seems clear that there is a culture within nab and its lawyers of ‘f..k you, nab will take you down, you will have nothing, you will be destroyed and we will do what we like including trying to influence the legal process when we want’. In my opinion nab’s conduct in this instance is common assault and should be treated as such.
The culture within nab and its lawyers of condoning these sorts of actions is thoroughly objectionable to any reasonable person. In our case, nab have been found guilty of unlawful acts to our disadvantage by the Ombudsman and yet nab still condone and continue with similar conduct which still can only be described as unconscionable.
Nab know that 99.99% of people will not question a multi-national company because they believe nab’s published terms and conditions are lawful and that nab must have a right to do what they do because it has teams of lawyers and they couldn’t fight them in any case. In our case this assumption is incorrect.
We are seeking more than justice for us. We are seeking an independent umpire [Judicial member at VCAT] to order that the terms and condition which purport to give nab ultimate power are unlawful and to be read down.
In this way people are able to rely on their ongoing financial contract, rely on nab complying with the law and rely on that same law to define a lawful process for voiding a contract and to also stipulate penalties for non compliance.
Perhaps nab need to change the way they think.
Tuesday, 7 October 2014
Thursday, October 2, 2014
Montsalvat - Australia is extremely lucky to have Montsalvat. Make no mistake, this ‘artist’s colony’ built through the vision of Justus Jörgensen early last century has survived to this day and is a place people go to marvel at just how a French Gothic village could be created on a hillside in Eltham. Not just a French low-line thatched affair but grand architecture inclusive of a great Baronial hall, a beautiful chapel, a delightful pool and some of the best ‘balanced’ architecture one could hope to see. We are still lucky enough to have residing at the property the man who helped build this icon with his father, Mr Sigmund Jörgensen as patriarch, arts advisor, multi-hat-restaurateur and board member.
It is approaching 50 years ago, when I first stepped onto the property marvelling at the community feel by just wandering aimlessly around dodging killer geese and surly peacocks and stopping to watch artists at work perhaps to buy their wares.
In my mind, Montsalvat must be both protected as a national icon and cherished by celebrating its history and making sure it continues in the manner visioned by Justus Jörgensen all those years ago. In this way a zillion new people over the next 80 years can go and gawk and admire and experience a slice of living history without Walt Disney like exuberance.
Ethos discomfort - But now, Montsalvat seems to be in some degree of ‘ethos-discomfort’. Whilst the buildings remain and are most certainly worth a visit or ten, I am concerned that the current board and management do not understand the meaning behind Montsalvat and are failing to manage critical business aspects and heritage responsibilities.
As the saying goes, there is no free lunch! To preserve Montsalvat requires vision and money and focus and clear strategies all leading to informed decisions by a coherent and transparent board. Decisions which ensure working capital for infrastructure maintenance and development.
Board and management have failed - As I watch events unfold, monitor blog and change sites, read publicly available documents, watch everything and listen to all and sundry it seems to be increasingly clear that the current board and management are failing in their primary duty to make sure Montsalvat is protected, cherished and financially sound. Unfortunately, there are many board and management decisions seemingly incongruous to these three very basic visions leading to profit diminishing year on year thereby curtailing infrastructure repairs let alone being able to take advantage of any ongoing strategic initiatives.
Directors are required to make informed and independent judgments on decisions put to them [AWA Ltd v Daniels (t/as Deloitte Haskins & Sells) (1992) 7 ACSR 759] and are required to place themselves in a position to guide the company and monitor its management but Montsalvat seems to have a board riven with infighting whilst making questionable [even ultra vires] decisions in possible breach of the Corporations Act  S180 etal. All board decisions seem to be treated as confidential subject to secrecy provisions inserted within the constitution. The result being the ‘self elected’ board only answers to itself with no members other than the actual board members - so there are no checks and balances.
Just a cursory look at the 2013 financial reports indicates problems like consultant’s fees, employment expenses and professional fees amounting to around 87% of gross profit, non current liabilities increased by $103,000 and the loss of a $600,000 revenue stream through gifting the popular albeit badly managed restaurant to a third party by tender for a fraction of its worth as that revenue stream. As directors have a lawful duty to be informed of the companies actual financial affairs [Statewide Tobacco Services Ltd v Morley (1990) 2 ACSR 405], how can this happen?
Just three examples:
Deliberate sacrifice of a major revenue stream - Money was and is critical to the survival of Montsalvat but revenue streams are limited. A few years ago we worked with Mr Sigmund Jörgensen to reinvigorate the restaurant establishing a vision, mission, strategic directions, strategic objectives, change plans, spatial changes, and cuisine changes all financially documented with timelines. We estimated a nett profit to Montsalvat from the restaurant of some $3,000 to $4,000 per week and, based on later published turnover of up to $14,000 per week, they should have easily achieved that profit and more - providing it was properly managed. Unfortunately, management did not take any of our advice apart from some spatial changes [since destroyed] resulting in losses roughly equivalent to profits foregone in as much as $300,000 per annum was lost to forecast. That’s a lot of maintenance and marketing money just gone. Management must have actually budgeted for wages etal near 90% of gross profit and a cost of sales well above industry norms to screw this up. Much worse, instead of fixing the problems, as a board and senior management should, and given they had all the information we gave them, decided instead of actually managing the restaurant to profit, to lease the space out for a fraction of its worth as a revenue stream for Montsalvat. How can that be acceptable? These are not the actions of a competent board and/or management given that under the Corporations Act each and every director must exercise their power and discharge their duties with the degree of care and diligence that any reasonable person would exercise.
Wasted marketing opportunities - Mr Jörgensen had just written a book on Montsalvat launching it a couple of weeks ago at Montsalvat itself. This major event should have been embraced by board and management, but no. Sigmund had to do his own marketing, beg entertainment, seek his own speakers and believe it or not the entry doors remained locked until after the advertised start time leaving guests outside in the dust for no reason. I was there, being extremely underwhelmed by the board and management in their conduct towards the launch and Mr Jörgensen but far far worse, their ambivalence if not rejection of the huge marketing opportunity this launch could have provided for the future benefit of the property they purport to direct and manage. It is shameful as this conduct seems to be driven by board dysfunction and infighting to the detriment of Montsalvat.
Destruction of heritage - An example which really strikes at the heart of Montsalvat. When Justus Jörgensen designed and built Montsalvat he designed a beautiful pool gated from the outside world and surrounded by artist accommodation and galleries. This pool is an integral part of the ethos of Montsalvat as are the pools at Ripponlea and Mooramong. Indeed we were at the National Trust property, Mooramong, a little while ago enjoying afternoon tea around the unfenced pool and have enjoyed many a visit to Ripponlea around their also unfenced pool which they use for functions and receptions. These heritage pools are unfenced for heritage reasons with no requirements by council or anyone to fence same. Yet the board and management at Montsalvat decided to erect a glass fence [which they can’t afford to pay for] around their heritage pool. This they are doing against significant objections [change.org] and no lawful imperative or need [no council requirement]. It is public information that the Board even lied to protect their decision to erect the fence by stating there was indeed a lawful requirement. Heritage aesthetics are ignored and a vital part of Montsalvat’s ethos is being ripped away by a board who just doesn’t understand Montsalvat.
There are many more such examples - Montsalvat has lost its direction.
Three things need to happen starting right now to ensure Montsalvat’s protection and survival:
Stop - The current riven and dysfunctional board along with senior management must resign forthwith apart from Mr Jörgensen who, pursuant to Montsalvat’s constitution as a family member, must remain.
Assess - An independent administrator / chair / chief executive needs to be appointed for a period of 12 months to instigate a totally independent assessment of all finances and decisions for the last 5 years.
Plan - Develop a proper strategic plan. During this time the board needs to be rebuilt with appropriate people after which senior management need to be appointed.
As I said, I am very concerned about Montsalvat and its future.
Jon Langevad MBA