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Legal proceedings against the Westpac bank may result from the bank withholding information in a previous court battle with clients

PAUL MURPHY: A lawyer representing customers of Westpac, who've taken legal action against the bank and then settled out of court, believes they may now be able to reopen their cases in the light of confidential information Westpac is trying to suppress. Westpac was today granted an extension of an order in the New South Wales Supreme Court, preventing the ABC from making use of the information contained in two letters to the bank from it's law firm, Allen Allen and Hemsley in 1987. The information was first published in the The Sydney Morning Herald newspaper early last week. Westpac says the communications between a lawyer and its client are confidential and privileged, and so can't be made use of in court proceedings. But Francis Galbally - who's represented dozens of clients who have settled out of court with Westpac - says that isn't necessarily so. He's called for a judicial inquiry into the actions of banks managing foreign exchange loans and he told Peter Martin his clients may now no longer be bound by an undertaking they gave the banks not to launch further legal action.

FRANCIS GALBALLY: In my view, as a result of the matters referred to in the letter in the article, it does not hold.

MARTIN PETER: So it may be possible to reopen some of these cases that have been closed by agreement between your clients and Westpac, using the information which has come to light in The Sydney Morning Herald?

FRANCIS GALBALLY: Yes, in my view yes.

MARTIN PETER: But not certain, you're saying?

FRANCIS GALBALLY: At the moment, one needs to obtain all the documents in relation to these transactions. The documents that have been published in The Herald relate to one company. So, one needs to see whether if it occurred in one company, did it occur in the major treasury operations for example, of the Westpac Bank. This is going to be a tortuous and difficult exercise, given the resistance by Westpac, to make available these documents. In my view, the only way that this can properly now be aired - and that those people who have settled without knowing what went on - is to have a full judicial inquiry in order to be able to bring into the open now what did occur in relation to the treasury operations of these banks.

MARTIN PETER: Why should the Federal Government undertake a full judicial inquiry? What business is it of the Governments?

FRANCIS GALBALLY: Well, banking is the Government's business. The Government has control in relation to the conduct of banking in this country. The matters that have been raised in The Herald are matters that are scandalous, and because of that, it needs to be aired, and it needs to be looked at. Because the issues that are raised in that article, and the letters that are in that article, in the documents in that article, raise matters of national importance. They raise matters going to legal cases that have been heard by the courts. They raise questions as to whether there has been proper disclosure to clients, has there been proper disclosure made in the normal course of litigation of documents that was in the possession of the banks that have never been disclosed in litigation. All these questions now need to be brought out into the open.

PAUL MURPHY: Francis Galbally with Peter Martin.