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Justice Michael Lee found RAMS Financial Group (RFG) “did not exercise its powers in the manner required by good faith” when it revoked the authorised credit representative arrangements (ACRA) of the Westpac subsidiary’s Fairfield franchise and moved to terminate the franchise agreement.
The decision followed a heightened review of loan applications submitted through the Fairfield franchise, after Westpac identified a number of “anomalies” across applications.
Justice Lee stressed that the concerns were serious enough to warrant investigation, but that an “anomaly” did not, by itself, establish wrongdoing by a loan writer or the franchise itself.
Justice Lee said: “The documentary sequence itself supports the conclusion that RFG proceeded upon Westpac’s assessment and recommendation while the evidentiary connexion identified by its own decision maker remained unresolved.”
What happened at Fairfield?
Sech Finance, as trustee for the Sech Finance Trust, and Daniel Lubarda operated the RAMS Fairfield franchise under a five-year franchise agreement that commenced in December 2021.
During 2022, Westpac subjected Fairfield loan applications to “heightened scrutiny”, including front book reviews of new applications and back book reviews of applications that had previously been approved.
Around 96 per cent of Fairfield applications received during August and September 2022 had been deferred for further credit checks because of identified “anomalies”.
The themes identified by Westpac’s head of financial crime, consumer and business banking included inflated income, staged wages, fictitious pay-as-you-go statements and company financials, overstated savings, serviceability concerns, unexplained movements of substantial sums between customers and misrepresented living arrangements.
However, Justice Lee stressed that an “anomaly” was not itself a finding of wrongdoing, stating that “Westpac had substantial grounds for investigating Fairfield,” and “the material generated by the investigation raised matters capable of giving rise to serious regulatory and commercial concern”.
By late September 2022, Westpac had reached a “strongly adverse position” of Fairfield and was recommended “that Westpac cease considering and accepting Fairfield applications”.
Jake Bromwich, the then managing director of RFG, sought “more granular information” before making a decision, but ultimately “identified the absence of the evidentiary connexion between the statement of concern and evidence supporting it”.
The court found the deficiency he had identified in the information supporting Westpac’s assessment remained unresolved.
Despite this, RFG subsequently revoked the Fairfield ACRAs on 31 October 2022 and gave notice the following day proposing to terminate the franchise agreement.
Justice Lee found that, in those circumstances, RFG had not acted in good faith.
The court did not, however, find that Westpac’s concerns were without foundation. Rather, it found there were genuine concerns about Fairfield applications that reasonably justified investigation, and that Westpac was entitled to subject the business to heightened scrutiny.
Justice Lee said: “RFG acted in response to genuine and serious concerns raised by Westpac and was entitled to protect its own legitimate interests and to take account of its regulatory and commercial interests.
“The deficiency lay in the process adopted after Mr Bromwich had identified the gap in the material before him.”
Lastly, it was found that Fairfield should have had a “meaningful opportunity” to respond to the “accumulated case”.
Justice Lee found issue with this omission in the process, stating: “Had the accumulated concerns been put to him contemporaneously, there is a real possibility that he could have provided explanations concerning at least some of them, proposed changes to practices, accepted further supervision or training, or otherwise sought to persuade RFG that immediate revocation was unnecessary.”
Limited loss
The court also found the breach caused Fairfield to lose a “real but limited” commercial opportunity.
Justice Lee assessed the probability that a proper process would have resulted in a commercially useful continuation of the franchise at 12.5 per cent.
However, the court rejected the suggestion that Fairfield should be compensated on the basis it would simply have continued operating normally for the remainder of its five-year term.
Westpac’s concerns were considered genuine and serious, and heightened scrutiny was likely to have continued even if Fairfield had been given an opportunity to respond.
The value of the opportunity was also limited by RAMS ceasing to accept new home loan applications in August 2024.
The monetary value of that lost opportunity has not yet been determined.
Connected case ends in settlement
The Fairfield dispute was also closely connected to a broader legal battle involving the RAMS franchise network.
A separate but related proceeding, brought by Top Ryde Financial Services and Tina Wodecki on behalf of group members, was heard alongside the Fairfield case in the Federal Court, but has since been settled for $29.6 million.
Justice Lee said the two matters had a “substantial factual connexion”, as the events concerning the Fairfield franchise acting as the “genesis of an investigation within Westpac and broader consideration of the RAMS franchise network, culminating in the establishment of what was described, somewhat grandiloquently, as ‘Project Guardian’”.
Here, 15 former franchisees alleged the home loan provider wrongfully terminated their agreements and withheld trail commissions.
RAMS has not admitted liability or wrongdoing as part of the settlement, which will return to the court for final approval on 19 October.
RAMS compliance crackdown
The class action was brought against the backdrop of RAMS’ compliance crackdown and subsequent withdrawal from new lending.
Separately to the franchisees’ allegations, RAMS faced civil penalty proceedings brought by the Australian Securities and Investments Commission (ASIC) in June 2025 over its home loan operations.
In October 2025, the Federal Court ordered RAMS to pay a $20 million penalty after the company admitted compliance failures between June 2019 and April 2023.
ASIC alleged those failures included dealings with unlicensed referrers, deficient conflict-of-interest arrangements and inadequate supervision of representatives. The court also considered instances in which franchise staff submitted false payslips from non-existent employers or altered customer information to support loan approvals.
Westpac announced in August 2024 that it would close RAMS. The bank subsequently entered into an agreement to sell the RAMS residential mortgage portfolio in November 2025.
The sale was completed in August 2026, with the portfolio sold to a consortium comprising Pepper Money, credit funds and accounts managed by KKR and PIMCO-managed funds.
The portfolio was worth around $15.4 billion at completion, down from $21.4 billion when Westpac signed the binding agreement in November 2025, as loans continued to run off through repayments.
[Related: Lender pays $19,800 over ‘no credit check loans’ claim]
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