In 2004-5 I was an expert witness for the defence in a case brought by the Australian Securities & Investments Commission in the Federal Court of Australia. My evidence went to the issue of "prudent lending practice" and I had the opportunity to offer a definition of the term and a general description of the practice that would fall within it. I also considered the nature of credit risk assessment and the value of subsidiary sources of repayment. In the end the judge preferred my evidence. Below is my full affidavit (unfortunately a version with the case identifiers blanked, but the analysis itself is still very clear). The final judgement is here (my evidence is considered at paragraphs 443-455). The underlying transaction was a "private loan" in which a firm of solicitors procured lenders for a property development. Needless to say the loan went into default.
