When Michael Howard invested in the Great Southern 2006 Organic Olives Income Project he took up the loan offer from the finance arm of Great Southern to fund the total cost of $24,490. In turn, Great Southern Finance nominated ABL Nominees, a company associated with the Bendigo and Adelaide Bank to be the lender.
For three years Michael Howard paid interest on the loan to Great Southern Finance. Not long afterwards the project was wound up because it had run out of money to cultivate the olive trees. He never received one dollar in return from his investment.
Seven years later, Michael Howard was served with a Statement of Claim from the Bendigo Bank to recover the loan, which by then had grown to $66,569.32 with interest. He decided to fight the claim.
Last week, he succeeded in defeating the claim, not because the project failed, but because the Bendigo Bank was unable to prove that a loan advance had been made. It had a paper trail - a loan deed and associated documents. But did not have a money trail to show that the money had been transferred to Great Southern to pay for the investment.
So in a roundabout way, justice was done. Michael Howard was not forced to pay the investment loan for a failed project. And the Bendigo Bank was ordered to pay his legal costs.
This decision has significance far beyond Michael Howard. He was one of 22,000 investors in Great Southern Projects who used the finance arm to fund their investment, and one of several thousand investors who dispute their loan.
Michael Howard's victory shines a light which may help these investors. For my case note