The Court of Appeal has upheld a decision by the Victorian Supreme Court, finding National Australia Bank breached the banking code of conduct in its dealings with a property investor.
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Justice James Elliott ruled last year that senior NAB banker John D'Angelo failed to warn businessman John Rose of the risks involved in guaranteeing multimillion-dollar loans to companies he ran with his former friend, bankrupt property speculator Timothy Rice.
The court found the actions were a breach of the Code of Banking Practice, meaning NAB could not enforce the guarantees.
NAB lost the court battle after trying to argue that the self-regulatory code had no legal effect.
It sought to appeal the case on the basis that Justice Elliot paid insufficient regard to the written notices on the documents Mr Rose signed, focusing instead on what Mr D'Angelo did or did not say.
The Court of Appeal found in favour of Justice Elliot.
