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ARTICLE · 14 NOVEMBER 2022

TGIF - Success for CBA in long-running dispute with developer

Corrs Chambers Westgarth
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Financiers should consider whether a borrower's inability to pay merely reflects a temporary lack of liquidity.

AustraliaFinance and Banking
Mark Wilks
Mark Wilks
Brooke Egan
Brooke Egan
Ellie Nolan
Ellie Nolan
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This week's, TGIF considers the Court of Appeal's decision in Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd  [2022] WASCA 132, handed down on 4 November 2022 in favour of the Commonwealth Bank of Australia Ltd and Lloyds Banking Group (Financiers).  

Key takeaways

  • In assessing insolvent transactions, regard must be had to solvency, the contextual commerciality and reasonableness of the transactions and the appropriateness of the security. Debts due and payable are not always paid on time by solvent companies. Also, a period of forbearance may result in a debt not being due and payable.
  • Guarantees provided by directors or shareholders are not indicative of solvency as the company cannot compel payment to meet its debts.

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