FirstMac keeps ASIC out of low doc case

Tonto Home Loans will be able to pursue claims against three aggrieved borrowers without the aid, or irritant, of the Australian Securities and Investments Commission assisting the court to work out the rights and wrongs of the dispute.

Last month ASIC sought some publicity for its decision to intervene in a test case over the enforceability of mortgage documents over low documentation home loans.

The proceedings concern the conduct of the Streetwise Group of Companies and which has been subject to investigation by ASIC.

In the proceedings Tonto Home Loans Australia Pty Ltd (now Firstmac Limited) and Permanent Trustee Company Ltd are seeking to take possession of properties owned by former Streetwise borrowers. The defendants in the three proceedings are Tavares & Rowe, Di Benedetto and O'Donnell.

ASIC said in its media release at the time that "these cases provide an appropriate vehicle to test the legal and regulatory framework that applies to enforcement action taken against borrowers by 'low doc' lenders where the conduct of an intermediary toward the borrowers is, or may be, in question."

The judge ruled, however, that "it seems to me that the question for the Court's determination is capable of simple resolution" and that the 551 pages of ASIC, APRA, Senate and Fujitso Consulting reports tendered by ASIC were "mostly of a background nature [and] leads me to conclude that it provides little assistance.

"The material is not sufficiently convincing to be considered of assistance to the Court. It seems to me in the present proceedings unnecessary to go beyond the adjudicative facts."