A judge in the Supreme Court of Victoria has criticised Bankwest over its lending practices in a case where the borrower's guarantees on A$18 million of loans were set aside.Justice Clyde Croft described Bankwest's execution of the loans as "somewhat disturbing" and found that its processes were at odds with the Code of Banking Practice.In 2007 Bankwest loaned a total of $18 million to a group of companies whose directors were Naseem Abdul and his wife, Theresa Abdul. The Abdul business activities included nursing homes and childcare centres.Theresa Abdul gave guarantees as part of the security for the loans.Bankwest served notice on all five loans in June 2009, citing failure to comply with the provisions of the various facility agreements and demanding payment of all amounts.The businesses went into receivership and in 2010 the receiver made a distribution of $8 million to the bank, leaving $10 million owing.Theresa Abdul claimed she did not understand what she was doing when she signed the guarantees and sought to have them set aside.As precedent, Croft cited a High Court ruling in Yerkey v Jones that "to enforce a guarantee against her if it later emerges that she did not understand the purport and effect of suretyship would be unconscionable, even though she is a willing party to it, if the lender took no steps to explain its purport and effect to her or did not reasonably believe that its purport and effect had been explained to her."Theresa Abdul submitted that she did not even understand what a guarantee was, let alone the extent of any potential liability that might flow from its execution.In evidence, she said that if she had known she could lose the family home and end up bankrupt as a result of signing the guarantee, she would not have done so.She submitted that she had no real involvement in the management of the business and that Naseem Abdul did not discuss business matters with her.The court found there was no evidence that Theresa Abdul was invited to examine the documents she was signing or told what she was signing.It found there was no evidence that she understood any of the details of the transaction beyond the broad notion of refinancing. It said this was insufficient to give her an understanding of the purport and effect of the transaction.It accepted that she had no real involvement in the management of the companies and that she received no immediate benefit from the provision of the credit.In his judgement, Croft said: "The process whereby the documents for the permanent facilities were executed was, it must be said, somewhat disturbing, having regard to the magnitude of the sums secured. "In this process, Bankwest took no steps to ensure that documents sent to the second defendant [Theresa Abdul], complete with warnings, were sent to her personally. Nor, it appears, did Bankwest ensure that the second defendant had adequate time to read the documents, much less understand them and have the opportunity to take independent legal