Martin complained that the bank had failed to act when he first told it about the problems they were having and instead allowed the overdraft to worsen. Martin complained that the bank had met with Jack privately and was favouring Jack in their dispute.

Our investigation

The core of Martin’s complaint was that the bank should have acted on his request to discharge his trust’s guarantee and mortgage if he repaid what he regarded as his share of the debt. As a result, we had to consider whether the bank was under any obligation to act on his request before the debt was fully repaid. We also had to consider whether the bank had acted fairly and reasonably when advised of the dispute between Martin and Jack.

The customer in this case was neither Martin nor Jack, but rather their company, and the bank was entitled to pursue either of their trusts – or both trusts – for all of the company's debts if unpaid. The two guarantees did not limit the bank to pursuing each trust for a share of the debt, and the bank did not have to discharge the guarantees and mortgages until the company repaid all the debt. The dispute between the pair did not alter the bank's rights under the guarantees.

The bank had acknowledged the dispute and agreed to consider reversing some interest if Martin and Jack reached an agreement with the bank about an arrangement to repay the debt in full. However, the bank was under no obligation to mediate a solution to their dispute. Meeting Jack and Martin separately was appropriate, and there was no evidence of the bank favouring either of them. We found the bank treated Martin and the company fairly and reasonably.

Outcome

We did not uphold Martin’s complaint.