We like people to tell their own stories on Crikey and this is how finance broker campaigner Denise Brailey brought a do-nothing Minister down in WA and now has ASIC on the case nationally.

It is very encouraging that the national regulator has responded to Denise’s call as outlined in this story below which was first published on Crikey on February 18. And can you believe One Nation preferenced against Brailey and in favour of dodgy Doug Shave in the seat of Alfred Cove. Interestingly, ASIC chairman David Knott told Business Sunday this morning that solicitor-run mortgage loans total about $1 billion but about $300 million are currently in default. Gee, it has got pretty bad before the regulators have finally woken up that there is a major problem here.


Press release: Sunday, February 25, 2001

Mr David Knott, Chairman of the Australian Securities and Investments Commission (ASIC), today announced a major investigation into the financial status of Australia’s unlisted solicitors mortgage investment schemes.

The initial focus of ASIC’s investigation is on runout mortgage schemes which are being managed by solicitors and finance brokers throughout Australia.

Runout schemes are those which did not make the transition to ASIC’s tougher managed investments regulatory regime in 1999. ASIC allowed them until 31 October 2001 to wind up their affairs in an orderly manner under the continuing supervision of the Law Societies (in Queensland, NSW, Victoria and Tasmania) and the Finance Brokers Institute of South Australia Inc. In Western Australia a small number of runout schemes have been extended the same deadline for winding up.

Under ASIC’s guidelines these runout schemes are prohibited from accepting new mortgage investors during the two-year wind-up period.

Mr Knott explained that:

‘Since late last year we have been building up a picture about the financial status of these schemes.

‘It is clear that a number of them have serious default rates. We expect those defaults to become worse as the wind-up deadline approaches.

‘We are therefore launching the biggest enquiry of this type ever undertaken by ASIC. To assist with that task, we have retained the services of Mr Tony Hodgson, one of Australia’s leading insolvency experts. Mr Hodgson will work with us in addressing how best to protect the interests of investors in these funds’, he said.

ASIC has written to all of the State law societies, which administer the schemes, seeking information about the schemes within their jurisdiction. ASIC has also written to all scheme operators requesting information about their loan books.

‘Our first priority is to obtain a better national database on the health status of these funds; and to target our investigations to those schemes where investors face the greatest risk’, Mr Knott said.

While ASIC’s investigations are primarily designed to identify the best steps available to minimise investor loss, issues of negligence and misconduct will also be considered.

‘We will be examining in conjunction with Mr Hodgson whether circumstances justify commencement of civil or criminal proceedings against scheme operators’, Mr Knott said.

ASIC expects to complete the first phase of its work by 30 June 2001 but believes that the project will extend through the second half of the year.

‘This will not be a quick or an easy project for ASIC. It is not realistic to expect that investor losses will be recovered, but our intervention should provide opportunity to minimise these losses and maximise consumer redress’, Mr Knott said.

ASIC’s investigation will be complemented by the cooperation of a number of agencies and organizations that will provide consumer advice to affected investors. They include:

Centrelink’s Financial Information Service

Financial Planning Association

National Information Centre for Retirement Investments.

For further information see ASIC’s consumer information sheet, issued today. The consumer information sheet gives consumers useful information about how to contact these organizations, together with additional relevant information.

In addition, ASIC has published a list of runout schemes on its investor website www.fido.asic.gov.au.

For further information, contact Nick Minchin’s former press secretary turned ASIC spin doctor Kate Harvey on: (03) 9280 3553 or (0401) 985 966.


Now, this is an edited account of two emails Denise Brailey has sent to Crikey explaining how she felt about helping knock off dodgy Doug Shave in the seat of Alfred Cove in Perth. Denise has been a lone voice fighting dodgy finance brokers who have ripped off retirees to the tune of almost $200 million across the country so far. The final figure could rise to $500 million and the issue has already blown away the WA government. Denise got 21 per cent of the primary vote but was just beaten into second spot by Liberal for Forests candidate Janet Woollard who surged to victory on Denise’s preferences.

Minister gone: oh what a feeling

Hi Stephen

Thank you for your wishes and assistance and support. I agree 100 percent on the Qld election crikey comments. For good government, a strong and energetic opposition is required.

In Alfred Cove, it was a tough call. It was easier to look after my seven thousand retirees than run an independent election campaign!!! Not for the faint-hearted.

Yes I achieved the impossible and admit to a slight case of feeling satisfaction. My teeth fell out, my leg developed RSI, I had no campaign manager, no hubby to do the cooking and the $10,000 budget raised from my members paled in comparison with the $120,000 spent jointly by the Woollard and Shave campaigns. And the 110 people willing to assist had no previous election experience. Quite daunting really.

My children and grandchildren are all so proud of me and that is what is important. Bad luck for my lecturers at Murdoch Uni because I am back at my desk as a student (to finish BA Politics) on Monday – oh the joy of it all!

Whilst on the campaign trail I:

earned a degree (BA Legal Studies – Criminology)

deprived the Minister of his green leather seat

obtained the written promise of a judicial inquiry in WA

obtained $5 million for legals for retirees

forced ASIC and the QLS to act against Triscott in Queensland

assisted with Grubb serving 10 years

assisted with Chan serving nine years

featured in a few documentaries along the way.

Not a bad year – just a little weather beaten, that’s all.

I thank you all for the helping and understanding. I knew if I did not enter the race, Janet would struggle to unseat the Minister on her own. The irony is that if I had beaten Janet by 268 votes, then Shave would have crossed the line. Many of her preferences leaked to Shave. My preferences were solid. Liz Peak was wonderful for the Greens. She worked so hard for the effort, knowing she could not even be in the race for the seat

This weekend I am assisting people in Qld, ACT and NSW in the mortgage broking scandal, so the work continues. Mr Howard believes that the WA election was fought on “local issues!!”

BUZZER – wronggggg!

The mortgage broking scandal is a national issue. It just hasn’t caught up with the Treasury yet. Good thing that David Knott (ASIC) and good ole Pete Costello are such good buddies – they may need to have a few lunches to deal with the “mortgage broking” factor. I didn’t receive my usual chrissie card from Joe “deeply concerned” Hockey.

Alfred Cove can be proud that they at least understood the issues and rallied to the cause. As you know “if you have the will, it can be done.”


And now this is the email from a week earlier.


Hi Stephen

My phone rang one hundred times or more during the past two days, not to mention the faxes and emails. I was so exhausted. I agree one hundred per cent with your thoughts on the outcome. I can be of much better use elsewhere than as an independent in the WA Parliament. We will not know the results until Friday.

To me whether I win or not is not important The magnitude of the achievement has blown me away. I win anyway, Shave is definitely out and I get my Royal Commission. I probably can do more for many people across Australia by staying outside of Parliament. The interesting thing is that many of the “also rans” and One Nation placed me LAST on their cards, BUT the voters voted eg: one nation 1 and Brailey 2 at total odds with the card. The Greens placed me 3rd on the card but many voted Brailey 2.

The important battles have already been won. Knocking a Minister out of his green leather seat is a buzz, let me tell you. Particularly a Minister like Shave. One Nation Perils of Pauline used my work on the finance brokers issue and placed the issue on HER brochures then placed me last because I turned down the offer to run as their candidate. At the same time, they stood for 53 seats in the lower house and won none. The only two seats they have won are in the upper house, where the numbers of people in the gerrymander are lowest. Easy pickings all engineered by the gun lobbiests John Fischer and Frank Hough who gained the seats hundreds of kms from where they live. Whilst they were talking to me in July 2000, they were wining and dining with Shave!!!! The One Nation candidate in Alfred Cove worked under Shave in the Ministry of Fair Trading as an investigator in the real estate/finance broking unit!!!! They preferenced Shave. No wonder the West needs a clean out.

The One Nation hype is a beat up. I enjoyed reading your comments. Labor won on its own merits – or LIBS lost becuase they were not listening on several important issues. Pauline is simply on the capitalisation trail and taking far too much credit for things she did not do. The gun lobby is creeping up on us. That is scary!! They want to control the Upper House in each state using the Pauline juggernaut, and Pauline likes to play the MM role. They explained this to me when they thought they were on friendlier terms with me.

Why isn’t politics simple? At the end of the day, it’s been an interesting experience. I raised my own funds from my people including those in Qld and NSW. $10,000 against Woollard and Shave’s $120,000. Talk about “on a shoestring.” It was bloody hard work. You have to be nuts to even attempt the process.

Meanwhile the calls are coming in for me to stand for the Senate. They have got to be kidding!!! I am the most reluctant candidate for parliament. Everyone else wants me there!!! History in the making. Sixty Mins have been in touch, Today Tonight is ready to screen the episode from December and Current Affair want to film this week!!!!! I am just about to write to the PM and let him know he better start listening to my people (retirees in other states) this year and he could be motivated by a slight case of election trauma.

I will be applying for legislation in WA to set up RECA (Real Estate Consumers Assoc) for the people and move across the state boundaries. A bit like the brokers did really. It’s all good fun and chasing crooks is very educational – they have taught me how to move the barriers. A few old finance brokers were the first to congratulate me.

How big is this thing? Well Canberra is just about to find out. No that’s wrong!!! They already know!!! The people of Australia are about to find out how much they knew and how long the cover-up has been going on assisted by the Law Societies. My next humble task!!!!

Cheers, denise b


Finally, let’s look at a story in this weekend’s Sydney Morning Herald.

Retirees fight law firm for their money



With decades of high-level business experience behind him, 76-year-old Patrick Luttrell feels a sense of shame that his business sense let him down when it came to investing for his retirement.

“When I was in business I was a director of 22 companies and a chairman of seven,” he said. “I was responsible for the entire operations in Australia, and I had to report back to the board in London. The shame of this situation is I should have had more business sense really…”

Mr Luttrell is talking about $130,000 he placed with a Queensland mortgage finance lawyer. Instead of enjoying retirement in their tranquil retirement village unit on Sydney’s northern beaches, he and his wife, Moya, have joined about 40 other retirees from NSW, Queensland and the ACT to form the Mortgage Investors Fighting Committee to reclaim $50 million they invested in a first-mortgage scheme operated by a Queensland law firm, Triscott and Associates, plus $600,000 in claimed unpaid investment interest.

In 1997 Mr Luttrell responded to a newspaper advertisement for a first mortgage scheme run by Triscott and Associates. He soon received a letter from the firm’s principal, Paul Anthony Triscott, describing the benefits of the scheme – monthly payments on an annual interest rate of 10 to 12 per cent, a nine-month interest income guarantee on any default, and no costs to the investor.

The Luttrells invested $130,000 from September 1997 to November 1999, in eight separate mortgages on eight investment properties. At first, Mr Luttrell said, the interest payments were made on time, but in 1999 they began to fall into default. He is now owed more than $8,000 in unpaid interest, and most of his capital is still tied up in the investments, which he is unable to access.

One of them is a Gold Coast office development known as Park Regis Properties, in which the Luttrells invested $20,000. Last June they were told the property, valued at $1.9 million in an original investment synopsis from Triscott and Associates, had been sold a month earlier for $1.15 million.

They are still owed 19 per cent of their capital investment, plus unpaid interest since December 1999. In another, a Townsville complex which houses a nightclub called Bullwinkles, they invested $20,000, due to be paid out last June. They have not seen any of their capital, and are owed more than $1,400 interest.

It was late last year, shortly after seeing an episode of ABC television’s Australian Story, about Perth campaigner Denise Brailey, that Mr Luttrell realised he was not alone. Ms Brailey set up her own consumer group, the Real Estate Consumers’ Association, in 1996 to fight for victims of troubled mortgage investment schemes.

For years, from her housing commission flat, she has campaigned on behalf of thousands of people – most of them elderly – who have lost their life savings in such schemes. Mr Luttrell called Ms Brailey and asked her to help him and his fellow investors.More than 150 investors turned up to meetings she addressed in Brisbane and the Gold Coast in December.

There is Wolfgang Trittler, a 77-year-old Manly retiree, who invested $50,000 with Triscott and Associates a year ago. The first two payments were on time, the third a week late, the fourth 27 days. His last payment was in July. He was owed $4,000 in interest, he said, and had to put one of his two home units on the market.

There is Les Cleary, a 68-year-old retiree from Pennant Hills. From half a dozen investments he made with Triscott, Mr Cleary said he had $4,000 of his original capital still tied up in the scheme, and was owed $900 in interest.

Mr Cleary’s 98-year-old mother still has $20,000 invested in a Triscott mortgage, and has not seen any interest since June.

Ms Brailey said there were many more retirees who had invested in contributory mortgages and had not received their expected return. While in Queensland she identified 12 lawyers in Queensland and NSW who had problems with defaulting mortgages. She believes the problem is worse in Queensland than elsewhere.

The president of the NSW Law Society, Nick Meagher, said the problem had not been as bad in NSW since the State reviewed lawyer operated mortgage schemes in 1997 after the failure of a scheme that left the Law Society having to make a multi-million-dollar payout to investors from its fidelity fund.

The Fighting Committee has sought help from the Queensland Law Society and the Australian Securities Commission (ASIC). The QLS says it has received complaints about Mr Triscott, and is investigating them. But it said “such an investigation is no indication as to whether or not there is any basis for those particular complaints”.

The money of investors in the first mortgage investment scheme gets paid into a trust account, under the name of a nominee company, Lex Nominees, as Mr Triscott told investors he is required to do by law.

Mr Triscott did not return calls from the Herald, nor did he – or his solicitor – respond to a series of questions put to him. However, in December he wrote to investors: “We do admit that there are half a dozen problem loans but, with your understanding and patience, we believe that we can, with little or no loss of capital to investors, release these securities.”

He admitted there had been “a few instances where a small amount of capital has not been repaid”, and said “we are currently taking steps to recover these amounts”.

He also told investors that Lex Nominees had used funds held on investors’ behalf “to pay legal fees to Triscott and Associates” for expenses in managing the trust.

And “in order to increase investors’ returns”, Triscott & Associates had written off legal fees owing to it by Lex Nominees. Mr Triscott told The Courier-Mail, Brisbane, in December his firm had $68 million invested in first mortgage schemes as of December 1999, but had since repaid $33 million to investors. “The amount we’ve actually lost is only in the order of $40,000 out of a loan book that was previously $70 million”.

He said that of $35 million invested, about $24 million involved loans which had not been repaid, or where arrangements to recoup the money had not be “firmed up”. He said his firm had either taken enforcement action on those loans or sites involving loans of $11 million were about to be refinanced.

ASIC acknowledges receiving complaints about Mr Triscott. The director of enforcement, Mr Michael Burnett, said that because the investments were made when solicitor mortgage practices fell under the regulatory eye of the QLS, it was unlikely ASIC could act.

The law was changed in December 1999, and solicitors operating mortgages schemes now fall under the jurisdiction of ASIC. The Fighting Committee says if the QLS cannot help them recover their money they will take their battle to the Queensland Supreme Court.

Peter Fray

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