Proposed Class Action against Australia's Banks
John Mahony announced just before Easter 2009 that he was hoping to launch a “Class Action” against Australia’s Banks for not having passed on the full interest rate cuts stipulated by the Reserve Bank of Australia since August 2008. Between August 2008 and March 2009 the Reserve Bank reduced the cash rate by 425 basis points, whereas the average variable indicator rate of the major Banks for variable home loan mortgages fell by only 385 basis points. The effect of the Banks’ failure to pass on the full interest rate cuts has been felt by every home owner on a variable mortgage. It is estimated that the average loss to each home owner is of the order of $250.00 to $300.00 per month and continuing.
The basis on which John Mahony believes that legal action is justified against the banks is that it has for over fifty years been an implied term in variable rate mortgages that all reductions in the cash rate made by the Reserve Bank will be passed on in full to mortgage holders. Since the Labor Federal Government came to power in 2007 Australia’s banks have failed to follow that fifty year plus convention on which variable rate mortgages have been written. Additionally, John has long been of the view that the standard variable interest rate clause found in all mortgage documents is void for uncertainty. John’s view has been confirmed by an extensive advice provided by an eminent Senior Counsel who has set out in the clearest possible terms that if challenged, the standard variable interest rate clause in bank mortgages might very likely be declared void for uncertainty by the Courts.
John Mahony’s proposed class action attracted enormous media and public attention resulting mainly from eight separate appearances on Sydney mainstream television and numerous Sydney and Australia wide radio interviews.
The basis on which John Mahony believes that legal action is justified against the banks is that it has for over fifty years been an implied term in variable rate mortgages that all reductions in the cash rate made by the Reserve Bank will be passed on in full to mortgage holders. Since the Labor Federal Government came to power in 2007 Australia’s banks have failed to follow that fifty year plus convention on which variable rate mortgages have been written. Additionally, John has long been of the view that the standard variable interest rate clause found in all mortgage documents is void for uncertainty. John’s view has been confirmed by an extensive advice provided by an eminent Senior Counsel who has set out in the clearest possible terms that if challenged, the standard variable interest rate clause in bank mortgages might very likely be declared void for uncertainty by the Courts.
John Mahony’s proposed class action attracted enormous media and public attention resulting mainly from eight separate appearances on Sydney mainstream television and numerous Sydney and Australia wide radio interviews.
At the present time John is waiting support from a professional fee funding firm before launching a class action against the banks or otherwise challenging the legality of the standard variable interest rate clause in bank mortgages.
