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Australia guarantees and indemnitiesduty of care

Westpac Banking Corporation v Lenthall

(2019) 272 CLR 1
JurisdictionAustralia
CourtHigh Court of Australia
Year2019
StatusBinding authority

Summary

A bank owes a duty of care to guarantors to take reasonable steps to ensure they understand the nature and effect of the guarantee under the Code of Banking Practice.

Key Principle

The HCA considered the bank's duty of care in relation to guarantees and the principles of the Code of Banking Practice; the bank must take reasonable steps to ensure the guarantor understands the nature and effect of the guarantee.

Area of Law

banking

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Paciocco v ANZ Banking Group Ltd (Full Federal Court) (2015) 236 FCR 199

Full Federal Court held that bank late payment fees were not penalties or unconscionable under consumer protection law as they bore a genuine pre-estimate of loss or legitimate commercial interest.

Andrews v ANZ Banking Group (Exception Fees) [2012] HCA 30

Bank exception fees may constitute unenforceable penalties if they are extravagant or unconscionable in comparison to the lender's greatest loss from breach.

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