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Mortgage Repossession and FOS complaints in Victoria

Thursday, May 07, 2015 - Posted by Philip Harvey

An interesting court case involving FOS disputes and a mortgage repossession showed the time delays that can occur where the ombudsman is involved. The timeline of the proceedings are reviewed below;

  • April 2007: An investment loan was granted for approximately $600k .
  • February 2011: Default Notice and demand served on debtors
  • April 2011: Proceedings commenced in the County Court to obtain possession of the property.
  • July 2011: Defence filed denying service of default notices (nothing else disputed).
  • March 2012: Application made for summary Judgment.
  • April 2012: At summary Judgment hearing, Judge requests affidavits be filed and served by defendants by 20 April, new hearing ordered for 24 April 2012.
  • April 2014: First FOS dispute lodged.
  • April 2014 to 2014 May: Seven disputes lodged with FOS. Repeated Court adjournments between these dates.
  • May 2014: Summary Judgment Order granted by the County Court.
  • June 2014: Appeal to Supreme Court of Victoria by defendants
  • November 2014: Matter heard by the Supreme Court
  • December: Judgment in favour of the financier (appeal dismissed).

From issuing a default notice to the Supreme Court's ruling is 3 years and 9 months.

The disputes lodged with FOS were detailed by the court at point 19 in the Judgment. Summarised they were;

  • 2012 April: A hardship dispute resolved by conciliation conference in October 2012.
  • 2013 January: A dispute as to legal fees, assessed outside FOS' terms of reference, in addition debtor had not complied with the conciliation orders.
  • 2013 August: Hardship claim based on a house fire at the Property (the property was burnt down by arsonists). Complaint closed November 2013 with advice from FOS that all avenues of appeal had been exhausted.
  • 2013 September: Dispute about cancellation of insurance. Closed because it was not related to the financier (rather it was the financiers insurance business, a separate legal entity).
  • March 2014: Complaint about the County Court proceedings which were dismissed. Borrowers advised by FOS that FOS had not further role in the dispute (very prompt reply in the same month by FOS).
  • May 2014: Dispute over a hardship refusal relating to the house fire and home insurance. FOS provided email advice to the financier on the day of the County Court hearing that the dispute was closed. On this day, Judgment was granted by the County Court.


You can view the full case here.


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