NAB – The Art of Deception

A letter dated 28 March 2015 was sent to the UK Treasury Select Committee detailing more deceptive business practices of the NAB.

UK Treasury Committee 28 Mar 15

This letter is reproduced below.


Attn: Mr Andrew Tyrie MP


UK Treasury Select Committee

Dear Mr Tyrie

Re: NAB – The Art of Deception

I refer to the Committee’s report Conduct and competition in SME lending and my letter dated 25 March 2015.

Media reports have noted that the Committee was particularly scathing over the conduct of Clydesdale Bank owned by the National Australia Bank (NAB) and the “Tailored Business Loans” which were designed to avoid regulatory scrutiny.

The NAB subsidiary, Clydesdale Bank, deceived small business borrowers as to what they were actually signing up for. The “Relationship Manager” promoted a variable rate loan with protection from a rise in interest rates (a “cap”) , while the loan documentation provided by the parent Company NAB included a “collar” that would defeat the monetary policy tool of the Bank of England and deliver wind-fall profits to Clydesdale bank if interest rates fell as they were predicted to do.

This deceptive business practice by NAB is not an isolated incident.

It is important the Treasury Select Committee understands the culture at NAB if the victims of what is politely termed “mis-selling” of business loans are to receive just compensation for the deceptive business practices of NAB.

Deceiving the Widows

The legal relationship between banker and customer was considered by Lord Cottenham in Foley v Hill (1848) 2 HL Cas 28; 9 ER 1002.

This judgement confirms that when a person deposits money at a bank, the bank is not acting as bailee, trustee or agent.

The money deposited becomes the bank’s money and the bank is free to lend that money to another customer of the bank and to make a profit from the transactions.

Likewise when a customer borrows from a bank, there is a contractual relationship between the customer and the bank. The customer promises to make regular payments and to eventually pay off the principal of the loan unless the loan contract provides for an “interest only” loan.

However where a banker acts as a Trustee, the legal relationship is quite different.

The banker then takes on the legal obligations of a “fiduciary” who must act honestly, in good faith and in the best interests of the beneficiary of the trust.

In Bartlett v Barclay’s Bank Trust Co Ltd [1980] Ch 515; [1980] 2 All ER 92 the Court of Chancery confirmed that a professional trustee such as one owed by Barclay’s Bank has a higher standard of duty of care than a trustee who could not be classified as a professional trust.

A profession trustee must establish a very strong case before a Court will relieve a professional trustee from a personal liability for a Breach of Trust. The duty of care of the Directors of a professional trustee are considered further here.

Occupational pension funds are established as “trusts” since this prevents the assets being available to the creditors of the employer if the business fails and a trust imposes important legal obligations of the trustees as well as providing correlative rights for the beneficiaries.

The members and beneficiaries of one of Australia’s oldest occupational pension fund have signed no contracts with NAB or the NAB Trustee.

In fact they have signed no legal documents at all apart from Contracts of Employment with their Employer and in the case of wives and widows they have not even signed any documents at all.

This makes it very easy for a dishonest trustee such the NAB trustee to deceive them.

On the 20 January 2014 the NAB Trustee took it upon itself to intermeddle with the affairs of the occupational pension trust established on the 23 December 1913 in the State of South Australia.

The NAB Trustee is in fact a “de facto trustee” or a Trustee de son tort. More details on a Trustee de son tort can be found here.

The ability of the NAB to practice the Art of Deception is constrained in the case this occupational pension trust because the terms of this trust were amended by an enactment of the Parliament of South Australia {Elder Smith & Co Limited Provident Funds Act 1963 (SA) } and there is also another enactment that deals with the transfer of members between funds {Elder’s Trustee and Executor Co Limited Provident Funds Act 1971 (SA)}.

These enactments confirm that the authorised purpose of the 1913 trust is to provide “pensions and benefits” to certain “male officers, their wives, widows and dependants”. These enactments also confirm that separate trusts were later established to provide retirement benefits to female staff members.

Now the NAB has no intention of paying survivorship pensions to widows so how does NAB deceive the widows?

Duty to Advise

A trustee has a duty to advise persons who have a beneficial interest in a trust of their entitlement under the trust. Details of the duty to advise can found here.

Duty to provide Access to the Deeds of the Trust

A trustee is under an obligation to allow a person with a beneficial interest in the trust with access to the original Trust Deed that establishes the trust and all instruments that purport to vary the terms of the trust. Details of the right of access to the Deeds of the trust can found here.

Duty to Obey the Terms of the Trust

A trustee has a duty to obey the terms of the trust as properly construed and to pay the correct benefits to the correct beneficiaries.Details of the duty to obey the terms of the trust can found here.

Right to Seek Judicial Advice

If a trustee has any doubt as to how to properly construe the terms of the trust, then the trustee has a right to seek judicial advice. The High Court of Australia has given general advice to all trustees to seek judicial advice before seeking to be relieved of a personal liability for Breach of Trust. Details of the duty to seek judicial advice can found here.

The Conduct of the NAB Trustee

The NAB Trustee which has not been lawfully appointed to the office of Trustee:

  • Refuses to advise widows of their entitlement to a survivorship pension
  • Refuses to allow wives and widows access to the Deeds of the trust
  • Refuses to pay any benefits to widows
  • Refuses to seek Judicial Advice when many of the purported amending instruments are clearly fraudulent

    Late in 2014 the NAB Trustee sent out “welcome kits” to “active members” who are still in the service of the sponsoring employer advising them that their membership had been transferred to another Fund administered by the National Australia Bank (NAB).

    This is a form of “money laundering” {or more accurately “entitlement laundering”} engaged in by NAB.

    The object was to deny “active members” of the Fund with the legal right to have access to the original Deeds of the Trust, since if there are now members of another fund, then legally they are only allowed access to the Deeds of the new Fund.

    However this action was the “mother of all deceptions” since no such transfer of legal entitlement had taken place.

    Over $400 million had been transferred from on accounting entity to another, however this just amounted to a Breach of Trust on the part of the Transferor Trustee.

    To allow the transfer of the Trust Estate of the 1913 fund and the associated legal entitlement of the widows and other beneficiaries would have required another Act of the South Australian Parliament similar to Elder’s Trustee and Executor Co Limited Provident Funds Act 1971 (SA).

    There has been no such enactment.

    Furthermore neither “trustee” engaged in this sham transaction has been legally appointed to the office of trustee in accordance with the terms of the trust.


    This letter contains a brief overview of the lengths that NAB will go to deceive its customers and people who have never been customers of NAB, but who have an entitlement under an occupational pension scheme that NAB has taken over to boost bottom line profits.

    If a bank will go to these lengths to cheat widows guided only by an obsessive focus on profits, what confidence can the Treasury Select Committee have to any testimony or promises made by a bank officer with the Orwellian title of Executive Director, Customer Trust and Confidence?

    There mere fact that Clydesdale Bank would bestow such a title on an Executive Director is effectively an admission that customers should have no “trust and confidence” in this subsidiary of NAB. Neither should the Treasury Select Committee.

    Michael West, a journalist with Fairfax Media in Australia has written that the major banks like NAB are above the law in Australia and it now seems they are above the law in the United Kingdom as well.

    The Treasury Select Committee should have no confidence in any voluntary compensation scheme promised by the NAB subsidiary, Clydesdale Bank. The Treasury Select Committee is just another victim of the Art of Deception practised by National Australia Bank (NAB).

    Yours sincerely

    Phillip Sweeney

    {Victims’ Action Group – The Elders IXL Pension Funds Fraud} – Now administered by NAB

    Copies of the Deeds of Variation confirming the widows entitlement to a survivorship pension can be found be found here.

    Enactment References

    Elder Smith & Co Limited Provident Funds Act 1963 (SA) here.

    Elder’s Trustee and Executor Co Limited Provident Funds Act 1971 (SA) here.


    Legal Case References

    Foley v Hill [1848] EngR 837; [1843-60] All ER 16; (1848) 2 HLCas 28; 9 ER 1002; 9 ER 100 [Transcript] {Citations}


    Bartlett v Barclay’s Bank Trust Co Ltd [1980] Ch 515; [1980] 2 All ER 92 {Citations}. A summary of this case can be found on the following link: Bartlett v Barclays

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    This tab updated on 27 March 2015