A loan guarantor has failed in a bid to be relieved of his guarantee obligation, after claiming that the loan contract should be terminated because the lender failed to meet its commitments under the Code of Banking Practice.In a judgment handed down last month in Commonwealth Bank of Australia v Wood, the Supreme Court of Victoria found that Bankwest had breached the Banking Code in 2008, when it loaned more than A$6 million to a property development joint venture. But it also found that the breach was "a mere warranty" (non-essential to the contract), which did not affect the guarantor's ability to make decisions in his best interests.The court said the guarantor needed to show that he would have acted differently if the breaches had not occurred. A common defence in such cases is that the guarantor would not have entered into a guarantee if they had received all necessary documents.Robert Wood, an orthopaedic surgeon, was involved in property development with two brothers. They were shareholders in an investment company called Jackson Street Pty Ltd.In 2006 Jackson Street entered a joint venture with four other parties to acquire property in Corowa, rural New South Wales.Jackson Street took out a loan with Westpac to buy the property and a year later negotiated with Bankwest to refinance and extend the facility.In October 2007, Bankwest agreed to provide the joint venture with a $6.5 million facility in several separate loans for the purchase of the property and its development. Bankwest valued the property at $7.6 million "as is" and $16.7 million "on a completion basis". The loan was settled the following January.A year later Mato, one of the joint venture partners, defaulted on a portion of the facility. At that stage the property development collapsed. Demands were made on the guarantors but no payments were made.Wood's defence claimed there were inconsistencies in the approval process and a failure to comply with the Banking Code of Banking. Wood argued that a breach would give him the right to terminate a guarantee.The court found there were inconsistencies and mistakes in the bank's documentation. For example, the brothers' occupations were listed incorrectly and the principals of Jackson Street Pty Ltd were listed differently in different documents. The list of guarantors varied in different documents.Wood gave uncontested evidence that he never received a copy of the guarantee or a copy of Bankwest's general terms to retain for his own purposes. He also said that he never received a copy of the Banking Code at the relevant time.Clause 28.5 of the Code says a lender will not ask anyone to sign a guarantee unless it has provided them with the information relating to their rights as guarantors.The court found that Bankwest's standard "guarantor pack" was not given to Wood and the bank breached its disclosure obligations.The court said: "Ordinarily, when the provisions of the Banking Code are incorporated into a guarantee they have contractual force. In this case the Banking code was relevantly incorporated."However, the guarantor must establish