Corporations Act 2001 (Cth) · s588FD
Unfair loans
What it covers
A loan to the company where the interest or charges were extortionate when it was made, or became extortionate after a variation. It is voidable whenever it was made, up to the start of the winding up.
"…the interest on the loan was extortionate when the loan was made, or has since become extortionate because of a variation…"s588FD(1)(a)
Elements
1Interest or charges were extortionate
When the loan was made, or since then because of a variation. It still counts if they are no longer extortionate.
s588FD(1)2Judged at the time
Having regard to the lender's risk, the value of any security, the term, the repayment schedule, the amount, and any other relevant matter.
s588FD(2)
No good faith defence
The s588FG(2) defence doesn't apply to unfair loans.