We found there was, indeed, an interlocking guarantee in place. We also found the bank only became aware that Jack and his partner wanted to keep all the proceeds after receiving a request to discharge the mortgage and so had no opportunity to provide advance notice of its decision. As soon as the bank became aware of their intentions, it arranged an urgent meeting with them to assess whether it could allow them to keep proceeds. However, the bank’s decision did not change, and its assessment noted that this was in part due to the sale of the rental property, which reduced their income and ability to service the other loan. The bank then exercised its commercial judgment in deciding it needed to put the proceeds towards reducing the size of the other loan.
We did not uphold the complaint.Print this page