CBA sues Groves for Distinctive Homes Dome

The Commonwealth Bank is suing former ABC Learning Centres chief Eddy Groves for $5.6 million, and wants to take possession of the home of the Adelaide 36ers basketball club - Distinctive Homes Dome.

Groves, who faces the Federal Court in Sydney this week for a public examination into ABC Learning Centres' collapse, has argued the bank has no claim to the mortgage over the Dome.

He has accused it of misleading and deceptive conduct.

It is understood a mortgage on the property may be held by a relative of Groves, although property searches list Groves as owner.

The action will not affect the 36ers, who have been paying lease payments as usual.

Eddie Groves was the hight profile Chief Executive of ABC Learning Centres which, at its peak, had almost 2,200 childcare centres in four countries.

A keen basketball fan, Groves, with Mal Hemmerling, bought the Adelaide 36ers in July 2006, with Groves taking ownership of the Dome and Hemmerling the team. (Hemmerling sold the team in June last year).

Groves also owned the Brisbane Bullets basketball team from 1999 until it folded in 2008.

ABC collapsed in November 2008, with outstanding debts of $2.7 billion, it was revealed last month.

The collapse left investors in ABC and creditors, including banks, out of pocket, and threw the childcare plans of parents nationwide into turmoil.

The dispute relates to a $5 million credit line which Groves had with the bank.

The bank has argued that in May 2008 Groves offered to put up the Dome as security for the previously unsecured line of credit, in return for an extension of the payback period.

There is a dispute on if the extension was for three months, or five years, as argued by Groves.

Groves has argued the outstanding amount is not due yet, and the bank has no claim over the property. He argues the dispute has made it difficult to secure tenants for the Dome and has lowered its value.

Groves seeks orders he be granted an injunction blocking any sale of the Dome, and voiding the credit agreement. He also seeks damages and costs.

The bank seeks $5.65 million, the copy of the title for the property, and costs.

The 7,600 seat Distinctive Homes Dome (formerly known as the Clipsal Powerhouse) was opened in 1992.