NAB slammed over secrecy bid

Kenneth Hayne has slapped down the bank’s bid to keep secret explosive documents outlining its “suspected offending”.

Royal Commission into misconduct in the Banking, Superannuation and Financial Services Industry Commissioner Kenneth Hayne. Picture: David Geraghty/The Australian.

National Australia Bank and its lawyers have been blamed over a document blunder after they attempted to withhold information from being used by the royal commission, as commission Kenneth Hayne slapped down the bank’s bid to keep secret explosive documents outlining its “suspected offending”.

In the opening proceedings today, Commissioner Hayne refused NAB’s application to prevent the public airing of several documents relating to an investigation by the Australian Securities and Investments Commission into the bank’s handling of charging fees to customers where no services had been given.

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NAB last week flooded the commission with more than 3000 documents relating to the “fees for no service” scandal, after initially producing just 31 documents, the commission heard.

An investigation by ASIC into NAB has not concluded, but establishing whether criminal breaches of the law have taken place are believed to be one of the avenues open to the regulator to pursue.

“NAB emphasises discussions with ASIC have not reached agreement and have not reached conclusions,” Mr Hayne told the royal commission. In its bid for secrecy, NAB lobbied Mr Hayne to consider that it was in the public interest to protect private individuals who may be implicated in the scandal, and in its commercial interest to protect sensitive information.

“It is to be noted that, it would be in the interests of NAB to pay the least sum available by way of remediation,” Mr Hayne said. “It would be in the interest of people charged fees in the instance where npo service has been provided to be provided with adequate compensation.”

“For these reasons the application for non publication direction is refused,” Mr Hayne said.

Counsel assisting Michael Hodge, QC, who has been grilling NAB’s former superannuation chairman Nicole Smith, over the bank’s tardy approach to compensation and its bid to retain the ability to charge largely useless fees to customers, told the royal commission of NAB’s tardy and reluctant production of documents in response to the commission’s demands.

He said that after a blow-up yesterday during which NAB’s counsel, Neil Young QC, asked the royal commission to withdraw from publication the documents outlining ASIC’s discussions with NAB over the fees for no services issues, the commission would “never again” give advance notice of which documents it intended to give to witnesses.

Mr Young had claimed the NAB legal team had not seen the documents.

“I accept that it may be that the solicitors for the NAB somehow did not realise that they had access to those documents,” Mr Hodge said.

But he said it was not the fault of royal commission staff and that most of the documents were available to NAB on Sunday evening and more were available on Monday, when NAB could have made confidentiality applications for the documents.

“Everything has occurred according to the published guidelines,” Mr Hodge said.

“One of the events that may have brought us to this point is in the particular way NAB went about producing documents in response to notices to produce,” Mr Hodge told the royal commission.

Mr Hodge said NAB’s super trustee NULIS was asked to produce its first documents by July 9, to which NAB’s lawyers produced 31 documents. On 20 July, the royal commission then asked for documents relating to fees for no services issues. The bank’s lawyers provided 3,500 documents, with more than 3,000 of those documents produced only last week, Mr Hodge said.

“The National Australia Bank apparently withheld documents from the royal commission on the basis of without prejudice privilege,” Mr Hodge said.

He went on to say that NAB then reversed this plan and told the commission it would no longer intend to seek to withhold the documents on that basis, but that it would pursue non-publication directions in court.

In respect of the ASIC documents on the list, seven of the 18 documents were either produced late or were never produced to the commission. This, Mr Hodge said, “has contributed to some of the difficulties”.

Mr Young said he would need to take some instructions with Mr Hodge’s statement.

“I wish to emphasis that we have endeavoured at every point in time so far as possible matters concerning confidentiality claims were dealt with and progressed outside of the hearing process so as not to interrupt the processes of the commission.”

Mr Young said the legal team did not know they could get access on Sunday and Monday the ASIC designated documents and that this may have been a “mistake” by the instructing solicitors. “That was the genuine position as of yesterday,” Mr Young.

Parts of the document revealed so far show that complaints to the NAB from cus­tom­ers who say they paid money but got nothing in return date back to 2009.

Some 40 complaints responded to between 2012 and 2015 resulted in compensation of more than $155,000, ASIC said.

Yesterday, Mr Young earned the ire of Mr Hayne by claiming the document was irrelevant to the evidence that would be given by Ms Smith.

“You will not give her answer, Mr Young. You will not,” Mr Hayne said, pointing his finger at the bank’s counsel. “Do you understand me?”

Mr Young: “I’ve done nothing of the sort, commissioner.”