Answer Happy

Randal is a mechanic by training. He suspects he is bi-polar
because of his behavioural patterns
(cycles of manic positive enthusiasm followed by dark suicidal
depression), and because various
members of his family have been treated for depression. Randal has
not sought treatment, and
instead self-medicates with large volumes of alcohol.

For the past 6 years he spends 6 months of the year working for
various mining companies in
Western Australia (WA) servicing their equipment. He would then
spend the rest of the year with
his wife and two young (8 and 10) children in Cambodia, (Although
he remains an Australian
citizen). When working he would earn approx. AUD $80,000 (post-tax)
and he would send
approximately $1,250 -$1,500 per month to his family in Cambodia.
He kept his money in a current
account with THATBANK (reg’d ADI) which he could access from
Cambodia.

From June 2020-Dec 2021 he couldn’t work in WA due to COVID-19
restrictions, so he survived
by using his savings. He returned to Melbourne in Jan 2022 with a
plan to purchase, renovate and
then sell a house. After some research and investigation, he
purchased with his remaining savings
a residential property in Kyneton, Victoria for $180,000. He then
approached THATBANK for a
housing loan of $50,000 to fund the renovations, but they refused
his application on the grounds
that he does not have full time work, no assets other than the
property in Kyneton, which they
valued at $100,000, (the house was uninhabitable).

So, he used his existing credit card (with THATBANK) to pay for the
renovations. He soon
reached the maximum credit amount of AUD$30,000. It still wasn’t
enough to finish the
renovations, but THATBANK refused to extend any further credit. He
saw an advertisement from
ANOTHERBANK (reg’d ADI) that promised to charge no interest for 12
months period if he
transferred his credit card debt to them from his existing bank,
and upping his credit limit to
3
$50,000. Believing this would give him enough time to finish the
renovations, sell the house and
repay the debt, he signed a contract with ANOTHERBANK to transfer
his debt from
THATBANK.

At the time of signing the contract the loans officer felt that
something was not 100 % “right” with
Randal, but couldn’t pinpoint the exact problem. So, they secretly
contracted THATBANK to
discuss Randal’s credit history before Randal closed his account.
The officer is worried about a
number of issues:
(1) The value of the property in Kyneton- which Randal had listed
at $350,000.
(2) Randal’s monthly payment deduction of $1,500 from unknown
persons in Cambodia, since
Randal’s loan application stated that he had no “dependents”.
(3) Randal was renovating the house himself- and was not a
qualified builder. Thus, affecting
his ability to resell.
(4) His state of mental health.

The officer from THATBANK was under pressure to “dump” Randal’s
account because his
manager believed Randal would bankrupt himself soon. So, they did
not answer any of those
questions, citing their duty of confidentiality prevented them from
providing any information to
ANOTHERBANK (Despite having full knowledge of Randal’s domestic
situation and banking
history, but not his mental health.).

Questions

1. Is the officer from THATBANK correct when arguing that he was
bound by the duty of
confidentiality?
2. Could ANOTHERBANK take legal action against THATBANK for
remining silent?
3. Was THATBANK correct when denying Randal’s initial housing loan
application?
4. Could ANOTHERBANK avoid the contract on the basis that Randal
has a history of
mental illness?