• Collectively valued at about $6.2m, the properties went under the hammer in a fire sale on Saturday 2 February. (NITV)Source: NITV
Toowoomba properties auctioned to recover mortgage debt incurred in a deal now being investigated by ASIC.
NITV Staff Writers

16 Mar 2019 - 10:28 PM  UPDATED 16 Mar 2019 - 10:31 PM

Up to 100 Aboriginal residents in Toowoomba could be left without adequate housing in the coming months after a private company recently defaulted on millions of dollars in mortgages made against their homes.

Late last year, the tenants of 37 properties located in suburban Toowoomba were informed they would need to vacate by May. The properties, in some cases homes occupied by the same family for over 35 years, were to be sold from under them in a matter of weeks.

“The families are broken,” said Patricia Conlon, a Wakka Wakka Traditional Owner of the Darling Downs region who has been advocating for the tenants.

“I spoke to about 20 tenants last Thursday and they were all just in tears. They’re distraught, don’t know who to turn to, or what to do.”

Collectively valued at about $6.2m, the properties went under the hammer in a fire sale on Saturday 2 February to recover about $4m in mortgage loan debt incurred by a man named Geoffrey John Hirning.

The circumstances surrounding Hirning’s acquisition of the properties is currently under investigation by the Australian Securities and Investment Commission (Asic) and the Toowoomba police are making inquiries but some of the residents have already packed up and left.

For the tenants refusing to give up their homes, the confirmation this week of Asic’s investigation and the piqued interest of the Queensland police is some small comfort, but is also accompanied with the realisation that neither avenue appears capable of immediately halting any of the property settlements.

In fact, one member of the taskforce formed by affected tenants and their allies claimed early this week they had been made aware that some of those property settlements had already been completed on Monday, five weeks after the sale at auction.

One prominent Sydney-based lawyer has said there needs to be a thorough investigation into the transfer of the houses into Downs Housing – Hirning’s private company – in 2016 from an embattled Aboriginal not-for-profit organisation that was administered by a board of local Aboriginal community members. That company was named Downs Aborigines and Islanders Company (Daic).

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Before the February fire sale of the properties, Stewart Levitt, a senior partner at Levitt Robinson Solicitors, told the taskforce there was a question mark over the probity of the transfer of the properties and that Asic or the Queensland government should, “as a matter of urgency”, approach the pertinent court to place a freeze on any sale.

“The assets should be preserved, and the right of the mortgagee to proceed should be immediately the subject of a restraining order,” he said at the time.

One significant question mark stands over the status of the document under which the houses were transferred, which carried the unwitnessed signatures of the two Daic board members who put their names and mark to the transfer documentation. Another is whether that particular document ought to have been registered.

One of those two signatories from Daic was Les Suey. In a 13 February interview with local Toowoomba newspaper The Chronicle, Suey said Hirning approached the struggling Daic in 2015 with an offer of a joint venture that would relieve some of the not-for-profit organisation’s financial troubles. Hirning’s proposed enterprise involved the redevelopment of some of the properties owned by Daic with a share of all future profits going back to the two entities.

“The board made a decision to enter the joint venture based on the expectation that it would ensure the viability and growth of Daic,” Suey told the Chronicle.“It was thought to be an opportunity that would allow Daic in the longer term to increase housing stock, to be financially secure and to provide a better standard of homes for our people. One aspect of the joint venture was that the management was in the hands of the developer.”

But according to Suey, the redevelopments never began and no profits to Daic were ever delivered.

Documentation provided to NITV News shows the Downs Housing Company was registered eight months before the transfer by William “Bill” Redmond, the owner and managing director of the legal practice, Redmond + Redmond Lawyers. On 14 August 2015 – the date of the company’s registration – Hirning’s place of business was listed at the same address as the law firm.

By December, Redmond was replaced as sole director and secretary of the Downs Housing Company by Hirning. In March 2016, Hirning also became the company’s sole shareholder.

Documentation related to Hirning’s past business dealings reveal a conviction for fraud in an unrelated case in 2002, for which he was sentenced to seven years in prison. In April 2009, Hirning was bankrupted by Bambank Pty Ltd, which traded as a business, Shipstone Accident Repair Specialists, an auto repair shop in inner city Brisbane.

On 28 April 2016 – roughly eight months after Hirning became sole administrator and shareholder of Downs Housing Company – 37 properties valued at more than $6.2m were transferred to him from Daic.

Eighteen months later, Hirning had a creditors petition filed against him and shortly after began taking out multiple mortgage loans on the properties through his company that would total in excess of $5m. The final mortgage – for a total of $62,480 against all 37 properties – was taken out on 19 October 2018. The creditors petition, which is a court document filed against someone for money owed – was later dismissed.

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Documentation reveals the interest rates for the loans were as high as 72% per annum, with most set at a rate of 48% and 52%. Daic was deregistered on 6 January.

Hirning has not responded to multiple requests for comment.

Throughout Hirning’s 12-month mortgage blitz, tenants continued to pay their rent. A hand-delivered letter to one address from solicitors acting for the mortgagees dated 24 January suggests these payments were not forwarded across to alleviate Hirning’s loan debts.

“As a result of the registered owner’s default our client is entitled to enter the property, recover rents and profits and/or evict the occupants (if it wishes to do so) and effect a sale of the property,” the notice read.

“Take note that our client does not acknowledge any interest that you may hold as tenant of the property or otherwise and we confirm that our client has not consented to any tenancy agreement or lease to you or anyone else.

“Should you fail to cooperate with our client’s sales agent and allow access to the property, steps will be taken to recover vacant possession of the property without any further notice to you.”

Before 36 of the properties were sold at the February auction, the distraught community taskforce petitioned several agencies for emergency assistance to prevent the loss of their homes. One of these was the National Congress of Australia’s First Peoples, whose chief executive, Gary Oliver, suggested the federal government purchase the properties and convert them to social housing.

A spokesperson for the federal minister for Indigenous affairs, Nigel Scullion, said responsibility rested with the Queensland state government.

The Queensland government’s housing minister, Mick de Brenni, ruled out buying the properties, claiming it wasn’t “the right move” because it did not “take into account the individual needs of families”.

Elsewhere, Asic initially claimed the matter fell outside its jurisdiction because of the federal government funding involved in assisting with the establishment of Daic as a not-for-profit organisation to provide secure housing for Toowoomba’s Indigenous community in 1983.

The Australian Charities and Not-for-profits Commission (ACNC) said the matter fell outside its purview after Daic’s charity registration was revoked in 2017.

Last Friday, Queensland Greens member for Maiwar, Michael Berkman, wrote to the Toowoomba local police command and the state’s police commissioner, Ian Stewart, requesting a “vigorous” investigation into the matter.

“The tenants dispute the legality of this transfer on the basis that a general meeting of the former company (Downs Aborigines and Islanders Company) was not held,” wrote the member for Maiwar.

“Over the next two years, the properties were mortgaged to a range of investors. Tenants continued to pay their rent, but the loans were never paid back.

“The circumstances of the auction are also suspect, since all 37 properties were sold on one day, with a very short marketing campaign.”

Meanwhile, about 10 families have already left their homes and the Queensland Housing Department says it is working with the affected residents to find alternative living arrangements. One early option, put forward by state government officials and Indigenous Business Australia, was an offer to facilitate applications for home loans.

James Boney, a former board member of Daic who could now lose his home, said on Thursday the community taskforce was in the process of attempting to re-register the not-for-profit organisation. It is their understanding that doing so would give them access to company documents now held by Asic that could provide clarity on the matter. Boney said the group also hoped it would assist in placing a freeze on the property settlements.

He said the remaining residents were shattered and exhausted, but would not give up the fight to keep their homes.

“We are prepared to sit in anyone’s office that we have to,” he said. “We’ve got nothing to lose.”

  • Reporting by Michael Carey, Ella Archibald-Binge, Keira Jenkins and Jack Latimore
  • This story was produced in conjunction with Guardian Australia