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Parliamentary Joint Committee on Corporations and Financial Services
18/11/2015
Impairment of customer loans

EVANIAN, Mr Chris, Private capacity

CHAIR: The committee welcomes Mr Evanian. For the Hansard record, could you please state your name and the capacity in which you appear today.

Mr Evanian : I was born in Iraq in a British air force base. I came here 52 years ago. In the 1980s we bought a property in Turramurra and put an application with CBA bank.

CHAIR: Sorry, Mr Evanian. At the moment, for the Hansard record, we just need to identify who you are and the capacity in which you appear. We will come to your opening statement in a minute.

Mr Evanian : I am Chris Evanian, appearing in a private capacity. Thank you.

CHAIR: Would you now like to make your opening statement, before we proceed to questions?

Mr Evanian : First of all, I did not want to come to this because I did not think it was going to accomplish anything, but I wanted to bring the matter out. I did speak to Senator Williams and Phillip Ruddock.

In the 1980s we bought a property for a shopping centre to be built in 1992. The loan was approved by David Murray for 15 years, for principal and interest. The centre was opened in 1993, and after three years we were paying $65,000 a month in interest. Then we received a letter from the bank to say, 'We are no longer going to continue with the loan. If you want, we can give you a five-year loan or seven-year loan.' I said, 'What was the reason?' The letter said it was because of continuous absence from the country.

I got really mad when I heard that. My four kids were studying in New Jersey, at Princeton, and I visited them at Christmas for about three weeks. I took my passport and that letter and I went and saw this person, whose name was Nick Kalikajaros, in Martin Place. I shoved the passport in his face and said, 'Show me. How many times have I been absent from the country?' He could not say anything. After a very quick discussion, I left. This Mr Kalikajaros sent me to the credit recovery. At that time it was Les Taylor. Once you go to credit recovery, that is where they hang you. We found that they wanted the loan back, so I found another funder. We got another funder, but meanwhile we had a property of about an acre in Pymble. We had to subdivide it and pay the bank. We lost something very close to $25 million.

I swore in 1997 that I would never, ever work with CBA bank at all. I was very angry until 2006 or 2007, when I was invited to a Christmas party at Dr Brendan Nelson's. I arrived there and guess who I met? This guy came and met me—his name was Les Taylor. I never saw him before. He saw me arriving with a Rolls-Royce Silver Spirit—a car valued at about $200,000 or $300,000. We started having a chat and he said he was from CBA—he was the main, head lawyer or whatever at the time. I said, 'I'm sorry that you ran into me, because I hate CBA. This is what they did to me during David Murray's time.' The next thing he did was go and get a letter from Ralph Norris. I got a phone call from Ralph Norris' secretary inviting me over for morning coffee. So I went to Martin Place and made friends with Ralph Norris. He said, 'What's the situation?' I said to him, 'We've got about $40 million of assets. We are currently with ANZ bank.' He said, 'We've got to get you all organised. We apologise for what happened to you.' Being a Christian, even though I swore I would never work with them, this guy and Les Taylor convinced me.

He put all my loans together at Colonial First State. At the same time, we had already put in an application with Bankwest to build 39 apartments at Gordon. So we kept that going, but we had all of the other properties under a different company, Tetbury Pty Ltd. The building side was Tresedar Pty Ltd. What happened was that we started building. The building was almost 50 per cent finished and we had $10 million or $15 million of assets all sold off-plan. We had paid $7.5 million or $8 million for the property when we bought it and we spent on it another $10 million.

At that time, when CBA took over Bankwest, they closed the file. When the file was closed the place stood up and we did not do anything about it. Before that, we were building, concurrently, 12 villas in Turramurra, where the builder stopped. The builder who was building in Turramurra passed away. We reported it to Bankwest. We said, 'The builder is dead; he does not have a licence.' He said, 'Do not worry, we will continue with the same builder.' Then we said to him, 'We want to change this builder because there is no licence on it.' It dragged on for about a year or so until the person I was dealing with in Bankwest—his name was Onnan Ostrom, the guy I was dealing with. He said, 'Chris, we can only continue this if you give us the rest of the assets'. We signed all the assets—assets in Turramurra, Ryde, Crows Nest and Bondi.

At that time, we had a meeting. There was a gentleman representing CBA bank. His name was Grant Lowen. It was a Friday afternoon at 4 o'clock. We had the receiver, Grant Lowen, me and my son, and Mark Losack representing Bankwest. The receiver said, 'We have looked at this scenario. This project will be $700,000 short.' I said, 'That is fine because you have got about $40 million in property with a loan against the $40 million, about $14 million.' He agreed that they were going to look at it again so we could continue the project. Grant Lowen looked in my face and said to me: 'I am representing Ralph Norris, here. Do not worry, Chris, I am helping you out' and I said, 'That is grea.t.

On Monday morning we were settling a property in Bondi for $1.2 million to pay all our bills—the concreters, concrete mixer and the contractors. There were a lot of them. At five to five on Friday—this guy stopped the settlement on Monday. I rang him. I said, 'Grant, why are you doing this?' He said, 'No, I am not doing that.' I said, 'Somebody must be doing it.' They purposely tried to demolish my situation and then my cash flow, because we had all these properties we were collecting rent from.

That is what happened with Grant Lowen. Some of them have no pride, no dignity. He just looks in your face and he lies. I was brought differently. I believe in shaking hands, and I believe in a person when I see—that really hurt me a lot. Since the Bankwest situation, I have been taking antidepressant pills and I cannot take it anymore. Sometimes I am very angry and I take it out on the best person in my life, my wife. That is really bad and that hurts a lot.

They put a receiver on. I went to speak to the receiver. I said to the receiver, 'How much do you think you can get for the site?' He said, 'Chris, definitely 15 we will get for it.' I said, 'Remember, we paid $8½ million just for the land.' The receiver came back. He had sold it—without telling us—to the Chinese for $6 million. What happened is, out of the $6 million they took all their expenses—as you know, they are rip-offs. They will rip you left and right. Then, the place is gone and they chase you. The dirty part of this Mark Losack is that he got us to sign all our other properties as a guarantee, and then he put the receiver on. That is very dirty, and I am very angry and upset about that.

CHAIR: Thank you. Does that conclude your opening statement?

Mr Evanian : Yes. You can ask all the questions you want, and if there are any questions I cannot answer, I want you to give it to me in writing. I will get my son—he apologised, he could not come with me. He is a Princetonian, a very educated kid. I have four of them, but this guy said he will answer every question you want in writing.

Mr RUDDOCK: Mr Evanian, in relation to the way in which this issue was dealt with, did the bank come to you and talk to you about how any issues they may have had could be dealt with so that you could continue with your development proposal?

Mr Evanian : No.

Mr RUDDOCK: There was no attempt to say: 'You've missed some repayments. How are we going to make it up?'

Mr Evanian : No. What repayments?

Mr RUDDOCK: I do not know. I am asking—

Mr Evanian : There was no repayment. It was long done. The loan was for the period that you build, which was going to take us two years. We put the land in. We put $4.5 million in the land. We borrowed the other $4 million. And then it was the construction loan. The thing which really got my broker was the letter from Ralph Norris. My broker had everything organised with another mob to lend us the money, but he said to me: 'Oh look. In this letter Ralph Norris is admitting what he has done. You've got to work with CBA bank.' I said: 'I love to work with CBA bank. From the day I arrived here, 50 years ago, I have been with CBA bank.' That is what happened.

Mr RUDDOCK: So you had not missed any repayments?

Mr Evanian : No.

Mr RUDDOCK: When the bank made demands upon you on the first occasion, it was allegedly because you were not in the country?

Mr Evanian : Yes.

Mr RUDDOCK: What did they say was the way in which you may have breached any contract to which you were a party?

Mr Evanian : Just continuous absence from the country.

Mr RUDDOCK: That is the first time?

Mr Evanian : Yes.

Mr RUDDOCK: Then they moved against your other assets?

Mr Evanian : They said they waited for the receiver to sell the stuff.

Mr RUDDOCK: No. On what basis was the receiver appointed, because you were in default, presumably?

Mr Evanian : I am not in default. How can I be in default? I am building.

Mr RUDDOCK: I am asking you?

Mr Evanian : I have 50 per cent of the project finished.

Mr RUDDOCK: Unless you are in default on your mortgage documents, they cannot foreclose. They cannot appoint a receiver.

Mr Evanian : Yes, they can

Mr RUDDOCK: There has to be a default. What default did they allege you had made?

Mr Evanian : The builder died.

Mr WILLIAMS: That is not your fault.

Mr Evanian : No, it is not my fault. But the builder died. We said to the bank: 'If you're not going to continue, just tell us now. Why are you pressing this damn thing here? We have to wait for you to make up your mind.' This guy, Arnold Nordstrom—the first day I met him he said: 'I am stupid.' I looked at his face. He is a tall guy. I said, 'I usually hate tall people, but why do you say you are stupid?'—just like that; in his face. Anyway, this guy approved it 10 times: 'Everything is fine. You can start and get a new builder.' We got Hutchinson. We signed with them. Hutchinson came in. Everything was fine. Hutchinson were going to start. This guy goes on holidays. You do not know these bankers; they are always on holidays. This guy comes back three weeks later. He changed his mind. I said: 'Arnold, why the hell are you changing your mind?'

Mr RUDDOCK: What do you mean he changed his mind?

Mr Evanian : He changed his mind. He said: 'No, we're not going to continue any more.'

Mr RUDDOCK: So Hutchinson said they would complete the project?

Mr Evanian : Yes.

Mr RUDDOCK: And then the bank did not approve Hutchinson? He changed his mind?

Mr Evanian : No. The bank approved Hutchinson.

Mr RUDDOCK: You said he changed his mind?

Mr Evanian : I know. After he went on holidays, he came back and he changed his mind. He said: 'We're not going to continue.'

Mr RUDDOCK: You had written approval?

Mr Evanian : Yes. I am sure there is a written approval email from him. I got a feeling, because the staff called us. There was a lady. She said: 'Chris, everything is fine. You can start.' This was like a week before Arnold came back from his holiday. He comes back from his holiday and the guy has changed his mind. I said: 'Did you have a fight with your wife?'

Mr RUDDOCK: You have taken legal advice in relation to these matters as to whether or not you have a remedy against the bank for the way in which they have behaved. Why did your legal advisers say you may not have a remedy?

Mr Evanian : My legal adviser never said I may not have a remedy. They said: 'Put $600,000 in the bank and we will pursue this matter, because it is a very deceptive way, whatever Mark Losack did.' Mark Losack went to Colonial. He is an ex-CBA guy. He went to Colonial and got all our files screwed up, because we had a five-year deal with them. After the five years, Colonial said: 'We are not going to renew it.' 'Why wouldn't you renew it? I am a client; you're there to make money.' Anyway, because they do not renew it, they always find a way to really demolish you—and they did that very successfully to me.

I am telling you this guy, Mark Losack, sold everything. We have sold four in Crows Nest, four in Ryde, one in Bondi and my parents' house. I had a brother there. He was 80 years old, a very healthy guy. I said to Mark Losack, 'Leave my parents' house alone,'—because it is under two names, mine and his—'You cannot do it.' He said, 'We have to get rid of them.' The house was sold. Three months later, my brother died from stress; he could not take it anymore.

The other thing which hurts me a great deal is our $12 million debt with Bankwest, which runs out in another two or three years time. Mark Losack himself said to put it on nine per cent interest, because four or five years ago they did not know which way the interest was going to go. He said: 'Fix it, Chris; it's better if you fix it, just in case the interest doesn't goes up. If it goes up or down, it doesn't make any difference.' I said, 'Fine.' A year later, I have an American firm offering us $1.75 million to buy the antennas on top of the shopping centre. We sold it separately, gave them a 50-year lease on top and got the money. I went to Mark Losack and said, 'Mark, how much is it to break this fixed interest?' He says it is $400,000. I said, 'Can you break it, please, and put us on variable, which is four per cent?' Guess what? He would not do it. Do you know why? Because they knew we have a case against them. Even today, I am telling you, they know we have a case. Unfortunately, we do not have cashflow.

Earlier there was a question asked of Mr Williams. His answer was a classic one. He said: 'You can go to the law. You can go and sue the guy.' But you need money to sue him. This is the Westminster system; you cannot do anything unless you have money. I spoke to the barrister. He said, 'You have a very good case against CBA, against Bankwest, but put $600,000 in my account.' I said, 'Where am I going to pull $600,00 from?' My own house—which you know, as you have been there so many times—is going to auction. I have nothing left. I have one shopping centre; I have about $12 million of debt, because of this—sorry, I am getting carried away too much. Ask me a question.

Mr RUDDOCK: You believe you have a legal remedy, and you had advice that the bank did not behave appropriately under the contracts you have with them, but you are so impaired financially you cannot bring those proceedings?

Mr Evanian : Yes.

Ms OWENS: The tripartite deed that you refer to in your submission, who was the other party? What was that about?

Mr Evanian : It is the builder, myself and the bank.

Ms OWENS: And the builder died?

Mr Evanian : Yes.

Ms OWENS: So one of the parties died?

Mr Evanian : Yes. He died, and then his son, who is a lawyer, thought, 'Chris Evanian is a millionaire, he drives a Rolls Royce, let me really screw him up and make it worse.' That has created that. But we had tripartite arrangements with the bank. We said to the bank, 'We need to get rid of this builder and then put in another builder.' He said, 'Okay, get another builder,' and he approved it. We got Hutchinson, we got all the paperwork and we signed all the documents; everything was done. Hutchinson was going to start it, and we even had a fixed price of $7 million to finish the project completely, because we had already done the hard work. We took it off the ground. I do not know if you know much about building but taking it off the ground is the hardest part. We brought it up. We were almost 50 per cent finished, with $10 million sold and people asking to buy. We said, 'No, we are not going to sell now.' We wanted to have a demo unit in the block, because it was the first project in Gordon which we started. We did not get it for nothing; we paid good money for it. Every unit of land was costing us $250,000. Today, you can buy it for probably $110,000 or $120,000. But what I trying to say is this: the project was good. Another $8 million was going to finish it. You beg these people to tell them, to make them understand; they would not. They put the receiver on, and then the receiver does whatever he likes. I got very, very angry about that, and then they sold it to a Chinese guy. The income from that project—you can check it today—is $58 million already done. We have lost $58 million because of these idiots. They have no common sense in their head.

Ms OWENS: When you talk about the $50 million, you are talking about what you could have made on the project?

Mr Evanian : Exactly! This Chinese guy made it—you can check it.

Ms OWENS: No, I believe you. Can I just talk through the time frame here, because there is a bit missing for me, which is what happened between you taking out the loan and the builder dying—what happened between then and when you started to identify that the bank, as you said, was treating you badly? Had you been making your repayments between 2006, when you took out the loan, and when the builder died?

Mr Evanian : Yes, of course. There were no repayments to make on Gordon. We have two sites; we are building two sites concurrently.

Ms OWENS: You just gave me two answers. You said yes, you have made the repayments—

Mr LAUNDY: Maybe I can help. Were you capitalising the interest payments?

Mr Evanian : Yes.

Mr LAUNDY: Okay, that is why there are no funds.

Ms OWENS: Okay, that is fine. Because you just gave me two answers—that is fine, I understand. That is what I am trying to get at.

Mr Evanian : I am sorry, maybe I am not clear enough.

Ms OWENS: Yes and no are two answers; so you were capitalising it. The size of the loan was growing, as it does under those circumstances. Were you behind on the building?

Mr Evanian : No, never.

Ms OWENS: And then the builder died. What happened when the builder died? Just talk me through—

Mr Evanian : The builder died on the Turramurra project—because we were building two at the same time. The Turramurra project is not financed by Bankwest; it is financed by another mob from a country mob.

Ms OWENS: But he was in tripartite agreement on the loan?

Mr Evanian : As well, yes. We have two tripartite agreements in both buildings with the builder The same builder is building both, but the financier is not the same. CBA is with Gordon and some investment company from the country is with Turramurra. Turramurra was only $5 million and the project was worth $12 million after it finished, which we did finish and rent as well.

Ms OWENS: But the project on which the builder died—he was part of the tripartite agreement with the bank?

Mr Evanian : Yes.

Ms OWENS: How much time passed after the builder died? What happened in those months following that?

Mr Evanian : When the builder died, his son, who is a lawyer—he is a very dirty lawyer himself. He is a crook lawyer and he is bankrupt. We went to the bank and we told the bank what happened. The bank said: 'That's fine. We'll fire the builder and we'll put in a new building company.' We went to Hutchinson Builders and we signed all the documents. Hutchinson Builders was going to continue to finish the project, and then this guy, on and off, suddenly changed his mind about three or four times.

Ms OWENS: How much time was there between when the builder died—and then his shonky son et cetera—and when you changed the builders—

Mr Evanian : I would say six or eight months after the builder died, and then the problems started until we went to another building company. Everyone agreed and then they changed their mind. They left the site as it is for almost two years. For two years, Bankwest did not let us touch it. For two years, we had to pay all the expenses. Every cash flow we got from the shopping centre and from all the properties we had in Crows Nest, Ryde and Bondi was just spent on lawyers.

CHAIR: Why wouldn't the bank let you touch the site? I am assuming that—

Mr Evanian : It is funny. This guy Arnold Nordstrom, who introduced himself as stupid, was definitely taking instructions from somewhere. Otherwise, why would he change his mind? I met with the guy and I gave him a few bottles of wine and we were in a good relationship, and then suddenly he changed his mind. What can we do? If he changes his mind, he changes his mind. But, the dirtiest part of it is Mark Losack and this guy—if I had only concentrated on the Gordon site, I would not be in a bad shape, but he convinced me to give him a guarantee on all the other sites, including my parents' house.

CHAIR: I understand that. Can I just come back to this two-year delay. Was the reason that they ended up putting you into default that inadequate progress had been made against your original plan? As I understand it, there were no building works for two years.

Mr Evanian : Yes, they stopped it.

Ms OWENS: They stopped it after eight months.

Mr Evanian : Bankwest stopped it. 'We said we're not going to fund this.' That is what he said—he is not going to fund it.

Ms OWENS: But the first six to eight months of that two years was caused by the death of the builder and not being able to replace them. So it took 6 to 8 months for you to extricate yourself from the builder's son and find another builder and then go the bank and say, 'We've sorted it.' And that was eight months of no building.

Mr Evanian : The reason we found another builder was through their instructions. That Bankwest guy, Arnold Nordstrom, said, 'Get another builder.' So we got another builder, but it is not very easy. A big company like Hutchinson does not come and look at it and say—

Ms OWENS: When did the bank come to you and say, 'Get another builder'? How many months had you left

it?

Mr Evanian : Probably four or five months.

Ms OWENS: So for four or five months it just sat there, and then the bank came to you and said, 'Get another builder,' and then it took you three months to do that.

Mr Evanian : They did not come to me. I went to them. We used to live in Clarence Street near their office. Every week we were there with this guy, Arnold Nordstrom, to get his plans and try to convince the guy, 'You know, this is a good project. It's already sold $10 million. You know, you're going to make money out of this. We will make money. The bank will be happy.'

Ms OWENS: Why did you feel that was necessary in that six to eight months? What had the bank said to you that made you feel it was necessary that you should go and convince them every week that they should stick with you?

Mr Evanian : Arnold Nordstrom was available. Every time I rang him he was available. He would give us an appointment. We would go and sit down and talk to him. When we got another builder, it was not very easy to get another builder, and Hutchinson came and spent well over six weeks to find out exactly how much it was going to cost us and the details. We even had the crane there. There was no need for them to bring another crane. That was calculated within how much it was going to cost. But this guy definitely had instructions not to continue. Why would you not continue? I cannot seem to figure out that I have got a guy who has got $40 million of stock or properties there against a $14 million loan with Colonial, which is part of the CBA bank—which Rolf Norris put me onto?

Ms OWENS: I think, from your submission, at that point they had not taken out the mortgages on your other properties. They did that later. So, at that point—

Mr Evanian : Yes, he convinced me.

Ms OWENS: Yes, but at that point there had been three or four months of no work on the site, then the bank had said to you, 'Get another builder,' and then you took three months to do that, and then the bank said, 'No, we won't go with that builder,' and then the bank took out mortgages on your other properties.

Mr Evanian : No, what happened is that the bank said that they were going to build it. They said, 'We want you to give us guarantee—

Ms OWENS: When did they do that?

Mr Evanian : I really have to get you all of the details and the dates. You just give me the dates that you want and we can get it all out for you.

Ms OWENS: In your submission you said that they raised your interest rate to the default rate and then they took the further step of taking mortgages on your properties. So it looks like there was an escalation from no building for five months, then they asked you to get a builder and for some reason they changed their mind, then they put you on the default rate and then they took another step and took mortgages over your properties. I am just trying to get a sense of how many months it was.

Mr Evanian : Yes, that is it exactly. Very well explained. But then, in that period, we sat with them and he said, 'Look, give us the guarantees over the rest.' So we gave them all the guarantees: the shopping centre, my house, my parents' house and all that. Then a week later—

Mr LAUNDY: When they got those guarantees did they move you back to the interest rate that you were on prior or leave you at the default rate?

Mr Evanian : No, they left it on default, and I was quite happy with the default rate. The default rate was all right; it was not going to kill us. It was, I think, something like 12 or 14 per cent, and I said that another year at 14 per cent was not going to be a big damage. We were happy with that. But then we signed everything, and then the next week he rang me up and said, 'Chris, we have got Steve Parbery from receivership and we are going to have a meeting with them.' So the receiver was owned and it started. I was very disgusted and angry. They had to put the place up for sale. I said to Steve Parbery, 'What do you need to do? Put the place on auction. It's a good site. Developers would love it.' He would not even put it on bloody auction.

Mr LAUNDY: I will follow on from Ms Owens's line of questioning. Just so I get the numbers right: you originally entered into a $20 million loan with Bankwest—or facility for $20 million, it says in your submission. You purchased the $7.5 million property. Was that used as security on the $20 million loan? Did you own that $7.5 million property unhindered?

Mr Evanian : I think it was almost unhindered. There was part of it, again, including that loan. It was all put together.

Mr LAUNDY: So that was used as security by Bankwest for the $20 million facility.

Mr Evanian : Automatically they will keep that as security, anyway.

Mr LAUNDY: You used a figure towards the end of your opening statement of $12 million that you owed. Does that mean that $8 million of the $20 million has been paid back to Bankwest?

Mr Evanian : No. The $12 million was $14 million with Colonial. With Bankwest what they did was—

Mr LAUNDY: But was Colonial on Turramurra?

Mr Evanian : Yes.

Mr LAUNDY: So just on Gordon, you had the $7.5 million property used as security to have the $20 million loan issued by Bankwest for this project? I just want to focus on that project.

Mr Evanian : Yes.

Mr LAUNDY: Prior to mortgaging all of the other assets, as the gentleman—you claim—misled you to do, what was your impression of what you were worth, asset-wise, outside of this lane in an unhindered fashion? What was your net worth, in terms of all of your properties put together?

Mr Evanian : Without Gordon?

Mr LAUNDY: Yes, because that is mortgaged. And if you had debt on whatever else you owned. The capital value, less your debt—what was your net worth of all of your other assets?

Mr Evanian : At least $25 million or $30 million.

Mr LAUNDY: Did you try to take this to another bank?

Mr Evanian : We did try to go to another bank. But you do not understand the banks.

Mr LAUNDY: I do; I have been dealing with them all of my life.

Mr Evanian : Once they know you have a problem, they will not talk to you or they will push you away. We had a meeting that was organised by Mr Phillip Ruddock with the lawyers of CBA—you remember that, Mr Ruddock? The guy asked me the same question. He said, 'Did you go to another bank?' I said, 'Do you know, when a bank puts you in receivership, no other bank will look at you.' This is what happened. We tried NAB and we tried ANZ. Both of them did not work. Then we tried private funders. That is why we are currently with a private funder called Challenger, for $10 million or $11 million. We cannot touch banks. I said to this guy from NAB, 'Give me your card. I need $11 million.' He said, 'I'm not in the lending department.' The guy was here.

Mr LAUNDY: So if you have $25 million worth of net assets sitting outside of this relationship with Bankwest, as a businessman, why would you not have sold assets and repaid the debt before foreclosure?

Mr Evanian : That is what we did. They sold—

Mr LAUNDY: No, they sold. Why wouldn't you have sold other assets? Why would you, instead of that, sign up for guarantees on assets that you had that were unhindered and put them into the mix?

Mr Evanian : Maybe because I am stupid! I did not go that far. I was so comfortable—I knew I was in good hands.

Mr LAUNDY: To take it one step further: even after you do that, you do not negotiate to move from the default rate at 12 per cent to 14 per cent, through the middle of the GFC, when the cash rate was tumbling by the month, back to the original rate in your loan documentation. I am guessing it would have been sitting, as a developer, somewhere, around three per cent above BBSY or whatever it was on the day?

Mr Evanian : Yes, it was three per cent or maybe 3½ per cent.

Mr LAUNDY: Why would you not have done that?

Mr Evanian : I do not know. It is a very technical question. I do not get involved in the books—that is my problem.

Mr LAUNDY: Speaking of books, this is my last point. I understand the frustration and the anger—I am tall; I am six foot three, so I hope I do not offend you as tall people have a habit of doing to you—but, presumably, and it may well be that you have to take this on notice because you have mentioned your son, you are relating to us your version of events and conversations that you have had along the lines. There is quite obviously documentation that is occurring backwards and forwards between you and the bank. Is your son the best person to talk to talk to about that?

Mr Evanian : You give me the questions and I will have them all replied to you by letter.

Mr LAUNDY: I guess what I am saying is that you are making claims here today that are based on hearsay in terms of conversations you have had with people. If there is documentation, it may help the committee through you, Chair, if we have access to the communications that are happening backwards and forwards to get an actual understanding of what was underlying this.

Mr Evanian : Good. Yes, we will do that.

Mrs SUDMALIS: When you had a tripartite agreement with the builder, was that builder paid for his work in the process as part of the negotiation of the work so that their interest was capitalised for you and the bank but the builder was paid as he was going through?

Mr Evanian : The builder went bankrupt, and when the builder went bankrupt any payments that he was going to do we had to take over and we paid it.

Mrs SUDMALIS: So that was not an outstanding debt for the build?

Mr Evanian : No.

Mrs SUDMALIS: Okay, so that answers one question for me—thank you. The other question is that a caveat is a fairly simple thing to remove from a property if they have no rights to it. Did you at any time try to remove that caveat they had slapped on the property that you had almost sold on the Monday? Did you go through a legal process of trying to remove that caveat?

Mr Evanian : I think we did. It was not a caveat; it was a writ. Do you know what a writ is? It is like a caveat?

Mrs SUDMALIS: I am only familiar with caveats.

Mr Evanian : They put a writ or a caveat on. So we could not sell it, so we lost the client. Then the lawyers wrote to have it removed and all of that took about three or four weeks. Then we ended up selling it for $100,000 or $150,000 less.

Senator WILLIAMS: Mr Evanian, what did you pay for the block of land at Gordon? Was it $7½ million?

Mr Evanian : There were three homes. Yes, it was $7½ million.

Senator WILLIAMS: Did you put down some cash for that $7½ million?

Mr Evanian : Yes.

Senator WILLIAMS: How much did you pay roughly?

Mr Evanian : We put $3 million into it.

Senator WILLIAMS: You put in $3 million of the $7½ million and the bank said, 'Okay—

Mr Evanian : Sorry, we put $4½ million and we got from the bank $3 million.

Senator WILLIAMS: So you bought a block of land for $7½ million and you have put in $4½ million?

Mr Evanian : Yes.

Senator WILLIAMS: The bank lent you $3 million and then the bank lent you another $12 million to build the buildings. Is that right?

Mr Evanian : Exactly.

Senator WILLIAMS: So you got the buildings halfway built and the wheels fell off the cart. Is that correct?

Mr Evanian : Yes.

Senator WILLIAMS: With the block of land at $7½ million, and you were halfway through building, how much do you reckon in total would have been spent on that block at Gordon? I think you said in your submission that the property purchase and the costs equated to $17 million.

Mr Evanian : Yes.

Senator WILLIAMS: So you paid $7½ million for the land and you put in $4 ½ million in cash and you have spent a heap of money building. You are up to $17 million and a receiver sold it for $6 million?

Mr Evanian : Yes.

Senator WILLIAMS: That is not even the price of what you paid for the land.

Mr Evanian : No. I said that to Steve Bribery. He said, 'This is how it goes.'

Senator WILLIAMS: Did he auction it?

Mr Evanian : No. I continually asked for it to be auctioned. They refused.

Senator WILLIAMS: Did he call tenders for it?

Mr Evanian : That is what they call it. They call it tenders. It is like auction. Then the next thing you hear is that a Chinese guy has bought it.

Senator WILLIAMS: For $6 million?

Mr Evanian : Yes.

Senator WILLIAMS: They completed the building?

Mr Evanian : Yes.

Senator WILLIAMS: How much did they sell it for?

Mr Evanian : I think well over $55 million.

Senator WILLIAMS: How much would it have cost to complete the building? You have gone from land and a build of $17 million.

How much would it cost to finish it off?

Mr Evanian : Another $8 million. Hutchinson gave us a price: $8 million to finish it completely.

Senator WILLIAMS: So, for $25 million you had the whole project finished, and you would have got about $50 million to $55 million for it.

Mr Evanian : At least double.

Ms OWENS: Does that mean that at that point you had drawn all of the original $20 million you borrowed to purchase part of the land and build the entire project, and you are looking for an additional $8 million?

Mr Evanian : No. We have not drawn all that. We are just drawing as we go along. We had only drawn probably half, because the building was half finished.

Ms OWENS: Okay, so you still had $10 million of the loan sitting there that you have not touched?

Mr Evanian : Yes.

Ms OWENS: And $3 million of the land was already yours?

Mr Evanian : Yes.

Senator WILLIAMS: $4.5 million.

Mr Evanian : Yes.

Ms OWENS: $4.5 million was already yours. So you are saying that all this happened because of $5.5 million. They took interest on 61 properties, which you claim was worth $25 million to $30 million.

Mr Evanian : Yes.

Ms OWENS: And they shut you down for less than the value of the land, which they sold for $6 million.

Mr Evanian : Yes.

Ms OWENS: This does not make sense. If $10 million were still sitting in the bank, you had taken $10 million. They sold the land for $6 million. So you are saying that at that point you owed them $4 million?

Mr Evanian : Yes, but do not forget you have to add on all the defaults and all the interest. They have carte blanche to draw from your account, because we were with Bankwest. They send you an invoice; they just help themselves with the money. They do not even have the decency to ask you. It is a shopping centre. We have a lot of expenses to pay and we had interest to pay.

CHAIR: As part of that process, did they revalue the properties that you signed over?

Mr Evanian : Do you mean the finished properties?

CHAIR: No, the ones you already held. Did they bring in a valuer to value not only the property that was being built but also all the ones that you had offered up as security?

Mr Evanian : I do not think so. I am not sure whether they revalued, but I think they put a valuer on the Gordon site. We never received anything. You do not know how it is. Once they stop you, they do not even want you to walk on your site.

CHAIR: Did you see the valuation that they had done on that site?

Mr Evanian : No. We can check for you if there is—

CHAIR: Were you given any opportunity to seek an alternative valuation?

Mr Evanian : No, and very rudely, too. The receiver is like a god. It is amazing; you cannot talk to the guy. 'This is the decision we made. That is it. Who the hell are you? That is it. We do this.'

Ms OWENS: How much do you owe now, at the end of all this?

Mr Evanian : Colonial?

Ms OWENS: No, for this one.

Mr Evanian : We spent about $4 million or $5 million. There was another $8 million or $10 million still in the bank. It was part of the deal, because we draw as we build.

Ms OWENS: Yes, I understand. But you said before that you owed $12 million or $15 million still, because of what happened here. Is that correct?

Mr Evanian : Yes, that is correct.

Ms OWENS: But only about $5.5 million of that is the actual project cost. I understand there are additional defaults and the interest and all that sort of stuff. It is about $10 million in legal costs and additional default costs. So, that $6 million or so that you should have owed at the beginning has now turned into $15 million?

Mr Evanian : Yes.

Ms OWENS: Is that because of the actions of the bank or because of the legal costs of you fighting it? Explain to me which proportion is which.

Mr Evanian : I think the main cause is the bank, but in those two years when we were closed we were in court every day. We had barristers and lawyers. People who had worked on the site wanted to get paid. For example, the crane was costing us $15,000 a month. It sat there for two years.

Ms OWENS: The bank would not let you—

Mr Evanian : No, they will not let you put it down. It is a hired thing. You call them and say, 'Stop the hire,' they will come and pick it up, and then you get one certain bill. We ended up in court with them and we paid them a quarter of a million dollars. They did not want us to breathe.

Ms OWENS: If you were not paying the hire fees on the crane, why didn't the hire company come and take the crane away?

Mrs SUDMALIS: They are not allowed to.

Ms OWENS: They are not allowed to, even though it is hired?

Mrs SUDMALIS: There is a piece of legislation that prevents a hire company from going into a property where there is a receiver in place.

Senator WILLIAMS: The PPSA rules are about to change, hopefully.

Mrs SUDMALIS: It needs to be looked at.

Ms OWENS: That is interesting. So the hire fees kept accumulating? Okay.

CHAIR: Okay. Thank you for your evidence here today and for your submission. We will come back to you with some further questions.

Mr Evanian : Please, and give them to me in writing. There a lot of nitty-gritty. I just want you to understand I am the guy who is on the ground. I am with the concreters and bricklayers and builders. I did not do much of this. That is why I tried to get my son here, but unfortunately he was detained. He could not come. Thank you very much.