A mere breach of the Code of Banking Practice should not of
itself necessarily result in an adverse finding against a
bank.
The Williams v Commonwealth Bank of Australia1 case
demonstrates that even where there is a breach of the Code of
Banking Practice, the banking industry's customer charter on
good banking service, a court will not necessarily set aside a
mortgage or guarantee where it is clear on the facts that even if
the Code had been complied with, it would have made no difference
to the customer's decision to enter into the documents.
Background
An elderly grazier sought an order setting aside a guarantee and
mortgage over his property, given in favour of the Commonwealth
Bank of Australia (the Bank) for the purpose of supporting bank
facilities provided to his youngest son for the purchase of a stock
and station agency. Interestingly, despite the order sought by the
father, there was no default by the son under his arrangements with
the Bank, and nor
