Facts

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?