Dorchester sales documents a 'sham'
Authority to sign property contracts questioned, writes Rob Stock.
Listed company Dorchester says the signatures on sale and purchase contracts allegedly handed to Westpac in property deals that wrecked two families' finances are not those of the only two people in the company with signing authority.
The Serious Fraud Office is investigating the documents which were part of loan applications which resulted in Westpac making loans to two South Auckland families in 2009 to buy units at 300 Lake Terrace from companies connected to property speculator Glenn William Cooper.
Cooper, who promised the units would be onsold in quarter shares, told Sunday Star-Times he knows nothing about the claims.
The sale and purchase agreements relate to the purchases in June and September 2009 of two units for $440,000 each, and appear to show the Westpac borrowers buying the units directly from Dorchester, which held them as mortgagee in possession after a loan to a developer went sour.
But lawyer for the borrowers Geoff Bilkey claims the documents were a sham, saying the deals involved Cooper companies Holiday Homeshare and Greenfield Developments buying the units from Dorchester for just over $263,000 and $253,000, and then onselling them at much higher prices to the borrowers with Westpac funding the deals.
Bilkey has copies of the sale and purchase agreements which appear to show those companies selling units A1 and C1 to the investors. Cooper promised the investors the units would be bought back from them if he failed to on-sell them in quarter shares for a quick profit – something which never happened.
Bilkey said had Westpac known the buyers were paying nearly $200,000 more than Dorchester sold the units for, it would never have lent on the properties as by 2009 banks had become wary of "contemporaneous" sales.
Bilkey said his clients were financially unsophisticated and did not know what they were signing. That is illustrated, Bilkey said, by the fact that it appears that his clients signed both sets of sale and purchase agreements.
Westpac would not comment, but Darryl French from Dorchester said the company had seen the documents. "I can confirm that they were definitely not signed by us. We were never aware of them," he said.
When contacted by the Star-Times, Cooper said he knew nothing about the documents.
"I don't know what he is actually talking about," Cooper said. "There were no misrepresentations to the bank in any of these deals that I was involved in."
He said the banks had got all their documentation through lawyers, including Bilkey.
"If the banks got anything from anybody else that's nothing to do with us," he said.
The SFO told the Star-Times it has opened an investigation following new information. "As this is now an active and ongoing investigation, the office is not in a position to provide any further comment on the matter," it said.
The bank has served the borrowers with Property Law Act notices on their homes that are a first step on the path to mortgagee sales.
Cooper says some of those left in financial crisis as a result of deals could have kept up with their mortgages if they wanted to. He said the reason they were behind on their mortgages was that they had decided to stop making payments. Their decision not to pay meant they had "got themselves into deeper trouble".
"They are living a very good life with all the extra money they are spending," he said.
Cooper said nobody from the SFO had contacted him since being told in July that the investigation had been called off. He had read in Star-Times that the case was reopened, but had seen no evidence of it.
Cooper said he felt that media coverage by the Star-Times was a result of the paper being manipulated by Bilkey, who has been campaigning to get banks such as Westpac and BNZ to forgive loans made to the families.
Bilkey said he has also passed files to the SFO.
- © Fairfax NZ News