UNLICENSED FINANCE BROKERING
Mr MacCARTHY (Strathfield) [5.22 p.m.]: I raise a matter of great distress to one of my constituents Mr Neville Murphy, an elderly gentleman who has lost a large amount of money. His case highlights that the courts can deny justice to individuals. He and his son have lost at least $250,000. The law in New South Wales has prevented them from recovering their money. The events go back some time, and I have to simplify them in the interests of time. In the early part of 1990 the Murphys were approached by one Martin Comer, then an accountant in Five Dock, to lend money through him to other parties. I believe that Mr Comer now lives in St. Ives. Between May 1990 and March 1991 these gentlemen foolishly, as it turned out, trusted Mr Comer who, unbeknown to them, was a bankrupt.
He offered them the opportunity to lend money at high interest rates and foolishly they did so on a handshake, without the benefit of written records. They borrowed the money to onlend it. One may say they were foolish indeed to do it, but foolishness is not uncommon in our society. Comer the accountant did not inform the Murphys of the then provisions of the Credit Act and the Credit (Finance Brokers) Act which required them to possess a licence. More importantly, he did not tell them that if they lent money without possessing a licence they not only risked not getting any interest, but they also risked losing the principal. However, it seems that Comer
advised the borrowers that this was the situation and, therefore, they did not have to repay even the principal of the loans because the lenders were unlicensed.
Hampered by the legal provisions and the lack of written contracts, in the past seven years the Murphys have had no success whatsoever in recovering their money. Those who received the money deny it was received from them as loans, but rather that it was repayment of debts owed by Comer. One wonders how the Murphys could have owed money to Comer. One can only wonder how Comer, as a bankrupt, could receive money from the Murphys on the one hand and settle alleged debts to third parties on the other without the administrator of his bankruptcy knowing of it. The key features of the credit legislation which impact on this case were introduced in early 1995 with very little publicity. It is not surprising that the Murphys had no idea that they had to be licensed. Their punishment for their ignorance is the loss of $250,000, maybe $300,000, and bankruptcy.
Apparently, no-one in the Government has seen fit to prosecute Comer for acting as an unlicensed finance broker. Thus far no-one seems to have brought him to book for his role. The law of New South Wales as it then applied - and I believe it has changed since - has resulted in the Murphys having been legally defrauded. There would appear to have been a successful conspiracy between Comer and those who received the money. My representations to the Attorney General, and Minister for Fair Trading have evoked nothing but unsympathetic responses from his department. The Murphys have tried all sorts of things. They have tried to get legal aid to pursue their case.
They have tried the Department of Fair Trading, but were told that Fair Trading is to protect lenders from borrowers not, as in this case, a consumer of finance broking services from an unscrupulous bankrupt accountant. The law is clear. I am not a lawyer, but everything I have read seems to say that according to the law they are not entitled to recover their money because they were unlicensed. It may be the law of the land, but in my view it is not justice. Two people, albeit very naive and foolish, have lost their life savings - a quarter of a million dollars - and more. I hope the Attorney General might intervene to do something to help the Murphy family.