Letter to the Editor of the Australian

20 February 2006

The following Letter was forwarded to the Editor of the Australian clarifying the Bank's position in relation to to articles published on Bernard Madigan on Friday 17/2 and Saturday 18/2.

The Editor
The Australian
2 Holt Street
Surry Hills NSW 2001

20 February 2006

Dear Sir

I refer to articles published in Friday 17 and Saturday 18 February editions under the headlines "Death ends bank battle" and "Vale Bernard Madigan" would like to express disappointment at the misleading way in which the stories were reported.

The imputation by The Australian that Mr Madigan, of his own volition, routinely paid out his mortgage with the Bank which then improperly charged him a $65 fee and that his pursuit, on principle, of the impropriety of this exploded into a crushing liability for legal costs and, by implication, catalysed his death is false and misleading.

The first paragraph of the story (Bernard Madigan’s titanic six year struggle with the Commonwealth Bank began as a dispute over a $65 fee) is wrong.

In fact Bernard Madigan’s history with the bank began two years earlier than that when in 1998 a Magistrate ordered him to repay a deceptively obtained overdraft of $4,169.75 and awarded court costs against him.

Later that year Mr Madigan made a false Statutory Declaration to the Land Titles Office, claiming to have lost his Certificate of Title to a property over which he had given the Bank an unregistered mortgage. In that Statutory Declaration he expressly denied that the Certificate was held as security by any financial institution. He then used the fresh Certificate issued to him to sell the Bank's security without its knowledge.

The Supreme Court granted the Bank an injunction preventing Mr Madigan from spending the proceeds of the sale until the debt was paid. It was the Court's intervention which caused Mr Madigan to repay the mortgage debt

Mr Madigan then brought a claim against the Bank alleging unconscionable conduct, breaches of the Banking Code of Practice, the Consumer Credit Code and the Anti-discrimination Act and theft of money from his account (including a charge of $65).

After a two week hearing a District Court judge dismissed all Mr Madigan's claims, describing his evidence as "disingenuous and contradictory" before finding that "the Bank's actions were precipitated by the deliberate conduct of Mr Madigan in selling the property in what can easily be regarded as an underhand way."

The judge also held that the $65 charge (a relatively minor component of Mr Madigan's action against the Bank) was authorised by the terms of his mortgage. The much-vaunted "mistake" the Bank conceded related to the date (only) of the charge and the judge expressly held that "nothing turns on the date."

Mr Madigan was ordered to pay the Bank's costs on an indemnity basis and it is this unpaid costs order for which Mr Madigan was declared bankrupt.

Mr Madigan unsuccessfully sought to appeal the District Court decision in the Court of Appeal and the High Court. Both courts awarded costs against him. He agitated his claims again before two Federal Court Magistrates, again without success.

Mr Madigan's arguments have, therefore, been entertained and dismissed by a Local Court magistrate, a District Court judge, four judges of appeal of the New South Wales Supreme Court, two High Court judges and two Federal Court magistrates.

Outside the judicial process the Banking Ombudsman, the New South Wales Police, the New South Wales Law Society, the Legal Services Commissioner and even the Parliamentary Joint Standing Committee of the Parliament of Australia dismissed his complaints. A local branch officer of the Bank even found it necessary to obtain an Apprehended Violence Order against him.

The Bank has incurred costs greater than it can ever recover from Mr Madigan or his estate in defending itself, its employees and its solicitors against his relentless crusade.

The Bank passes on its condolences to the Madigan family, but following the imputations in these stories feels it’s necessary to set the record straight.


Yours sincerely

Bryan Fitzgerald
General Manager, Media and Issues Management
Communication, Community and Reputation