NSW Court of Appeal upholds $5 million clawback in Punchbowl deal

The NSW Court of Appeal has upheld orders requiring Westwood Capital Pty Ltd to repay more than $5 million received under a failed $100 million property transaction, rejecting the vendor’s attempt to rely on the statutory defence for parties to voidable transactions.

The decision affirms a November 2025 ruling (which we summarised here) in which Justice Black found that insolvent property developer Portman Securities Pty Ltd’s agreement to acquire a Punchbowl development site was an uncommercial and voidable transaction entered into without any realistic prospect that Portman could complete the purchase.

Now, the NSW Court of Appeal (Free JA, with Ball JA and Harrison AJA agreeing) has dismissed Westwood’s appeal and ordered it to pay the liquidators’ costs.

Portman agreed in March 2020 to acquire the property from Westwood for $100 million. It paid $5,000,100 of a $10 million deposit but failed to pay the remaining $4,999,900. The contract also triggered a stamp duty liability exceeding $5.4 million, payable within three months.

After Westwood terminated the contract, Portman was wound up and Christopher Darin of Worrells was appointed liquidator. The liquidator successfully challenged the transaction, with Justice Black finding that Portman had no income stream, no committed financing and no realistic capacity to fund the balance of the deposit or the stamp duty.

Westwood did not challenge the findings that the contract was uncommercial under section 588FB of the Corporations Act 2001 and voidable under section 588FE(3). Its appeal focused on whether it had established the defence in section 588FG(2), including that it lacked reasonable grounds for suspecting Portman was insolvent or would become insolvent by entering into the transaction.

The Court rejected that argument. Westwood’s case depended heavily on evidence from its controller, Bill Gertos, that he had previously made inquiries about Portman’s financial backing and had been reassured about funding from overseas investors and Westpac.

Justice Black had rejected that evidence after finding Gertos gave materially inconsistent accounts about whether he knew Portman’s proposed backers, whether he had spoken to them and whether he had made any inquiries. The Court of Appeal upheld those credibility findings and said their rejection left a “forensic void” in Westwood’s case.

The Court accepted there is no general legal duty on a vendor to investigate a purchaser’s finances. However, the significance of the inquiries arose from the parties’ relationship and from Westwood’s own case that earlier inquiries had satisfied it about Portman’s financial capacity.

Portman had assumed obligations to pay more than $10.4 million within just over three months, despite having no apparent financial backing or committed funding. Gertos also knew Portman had not completed an earlier $68 million acquisition and that another Pamboris-controlled company allegedly owed Westwood between $1.5 million and $2.5 million.

The Court found Westwood had not proved that it lacked reasonable grounds for suspecting insolvency or that a reasonable person in its position would have lacked those grounds. It declined to decide broader questions about the meaning of good faith under section 588FG(2)(a), finding the failure under section 588FG(2)(b) was sufficient to dispose of the appeal.

Read the decision here.

Nicola Bailey of 3 St James Hall Chambers and Maddocks acted for the liquidator.

Miles Condon SC of New Chambers and Jordan Djundja Lawyers acted for Westwood.