Bendigo and Adelaide cautions litigant borrowers

Bendigo and Adelaide Bank has urged investors who are helping fund legal action relating to a statement of claim regarding loans associated with the collapsed Great Southern Managed Investment Scheme to consider whether they can afford to continue.

In a statement commenting on a Victorian Supreme court refusal to allow the filing of a statement of claim in a class action led by legal firm Macpherson and Kelley, Bendigo and Adelaide managing director Mike Hirst pointed to the fact that it was the second occasion on which the state of claim had been refused by the court.

He claimed he was concerned for borrowers who, as a result of the court’s decision, would be forced to fund a third attempt by the law firm to mount an arguable case.

“Surely borrowers would have expected Macpherson and Kelley to put its best argument forward first, so as to reduce the time and money spent on legal proceedings,” Hirst’s statement said. “After being knocked back in October, you would have thought M—K would have provided a better argument. But now M—K will be spending more of their clients’ money having a third bite at the cherry.”

“The time has come for borrowers to consider whether they should continue to expose themselves to compound and default interest by not bringing their loans up to date,” he said.

As part of the class action brought by the investors tied up in the Great Southern schemes, some investors have opted not to maintain payments on loans provided by Bendigo and Adelaide on the basis of legal advice that loans from interconnected lenders are void or unenforceable.