9. Aspects of the life of the contract

Updates and background for this project (Digest)

• Cooling off period
• Disclosure of information
• Changes to obligations
  

COOLING OFF PERIOD

Current law and industry standards

9.2 Under the general law, as soon as a contract has been entered into, the parties are bound by its terms, provided the legal requirements for a valid contract have been met and the contract is not attended by vitiating factors. A guarantee is governed by these general principles and, consequently, once the guarantor has entered into the contract, which in practice occurs at the signing of the guarantee document, he or she cannot unilaterally withdraw from it.

9.3 The Consumer Credit (New South Wales) Code (“Consumer Credit Code”) modifies the common law with respect to guarantees within its ambit, that is, those that relate to loans taken out by a natural person and intended for personal, domestic or household purposes. Section 53(1)(a) provides that a guarantor can “withdraw from the guarantee at any time before credit is first provided under the credit contract”. The withdrawal must be made in writing to the credit provider.¹ The limited application of the Consumer Credit Code means many guarantors miss out on the benefits of a cooling off period. This is demonstrated by the results of the empirical research conducted by the Commission and the University of Sydney (“Lovric and Millbank”)² discussed below.

9.4 The Code of Banking Practice (“Banking Code”), as a result of a recommendation from a major review, adopted the provisions of s 53(1)(a) of the Consumer Credit Code.³ Unlike the Consumer Credit Code, the Banking Code requires banks to give a cooling off period in respect of guarantees that relate to loans taken out not only for consumer purposes but also for small business purposes.⁴ The Credit Union Code of Practice does not require credit unions to grant a cooling off period to guarantors.

Empirical background

9.5 Lovric and Millbank found that many people are rushed into entering into a contract of guarantee and given little opportunity to consider the transaction:

“There was always urgency in my signing and (my husband) had always told me that if I didn’t sign the “deal would not go through”…. I was, I think without one exception, given only a few hours notice; no regard was given to the fact I had two young children or the fact that I didn’t live or work in the City. I was never asked what times would be suitable or convenient for me. I was simply told when and where [to sign].”⁵

9.7 In one litigated case, the wife said she received a telephone call from her husband who asked her to go to the bank to sign some documents.⁷ Prior to the telephone call the wife knew nothing about the proposal to use the family home to secure the debts of her husband’s business. She went to the bank with her two-year-old child and signed a mortgage in front of a bank officer who gave no explanation of the mortgage. The court ultimately held that the mortgage should be set aside.⁸

9.8 Not surprisingly, Lovric and Millbank found strong support from guarantors for the introduction of a cooling off period to allow time to reconsider guarantee transactions before they take effect.⁹

Arguments for and against

9.9 A number of submissions to this inquiry have said that a cooling off period is necessary to allow guarantors the opportunity to give proper consideration to their position.¹⁰ A cooling off period would also give guarantors time to gather more information or seek further advice about the contract. One of the submissions drew attention to the particular needs of some women and people from non-English speaking backgrounds.¹¹

9.10 On the other hand, the reasons given by the submissions opposing a cooling off period revolve around concerns about delaying and frustrating the various parties to the contract, especially where the funds borrowed were required immediately.¹² Some of these submissions suggested that it is better to focus on pre-contract requirements that ensure that a prospective guarantor understands the transaction before he or she agrees to be bound.¹³

The Commission’s conclusion

9.11 Guarantors should be given a cooling off period to allow them time to consider the transaction further. In addition, a cooling off period would assist in ensuring that the guarantor’s decision to enter into the contract is not attended by undue pressure. Such pressure may come not only from officers of the lender, who might be keen to finalise the transaction, but also from the borrower, who will want to access the funds sooner rather than later. A cooling off period would allow guarantors to reconsider their decision in their own environment away from the unfamiliar and (for some people) intimidating surroundings of a commercial office and the pressures that may be felt in the presence of the borrower and the solicitor (or other officer) of the lender.

9.12 In Chapter 6, the Commission recommends that prospective guarantors should not be asked to sign a contract of guarantee until after at least one business day from the time of disclosure of the information they are entitled to receive.¹⁴ Since guarantors would already be given an opportunity to consider their position before the signing of the contract, it is sufficient to give them one clear business day from the signing of the contract to exercise an option to withdraw from the contract. The Commission is concerned not to make the cooling off period too lengthy, since a delay in the finalisation of the loan and guarantee may result in lost business opportunities. A delay of one day in receiving the advance should not occasion a borrower any great difficulty.

RECOMMENDATION 9.1

The Model Law should provide that a guarantor should be allowed to withdraw from a guarantee within one clear business day from the execution of such contract.

Empirical background

9.13 Lovric and Millbank found that, after the execution of the guarantee, most guarantors received no information about the loan during its term, and were surprised when the lender advised them that the loan was in default and that the guarantee would be enforced, and were further shocked to discover the extent of their liability.¹⁵ These findings are consistent with other studies, which have found guarantors generally only become aware of problems when their legal responsibilities were tested in times of trouble.¹⁶

9.14 The data from the Lovric and Millbank study points to a poor level of communication between the lender and the guarantor. These failures in communication relate to all areas of the life of the guarantee, from the basic details of the obligations under the guarantee to information about the borrower’s default.¹⁷ For instance, many guarantors experienced problems getting information from the lender about the level of the debt they have guaranteed. Around three-quarters of respondents to a survey of guarantors reported that they personally received no information about whether the borrower was keeping up their repayments or any information about any increase in the amount guaranteed.¹⁸ In some cases, guarantors found out that there was a problem with the debt quite incidentally. One guarantor reported attempting to make a purchase on credit and being informed that they were “blacklisted.”¹⁹ Court judgments reflect this trend. In Charles v Parkinson²⁰ for example, Mrs Parkinson only became aware of her husband’s business debts when a writ of execution was issued and a sheriff seized goods from the family home, following a default judgment from court proceedings about which she knew nothing.

9.15 On the evidence, guarantors need better access to information from lenders during the life of the guarantee, in particular: details of guarantors’ obligations and liabilities under the guarantee; information about the status of the loan; and default by the borrower.

Obligations and liabilities

9.16 A guarantor’s obligations and liabilities are found in the contract of guarantee and in the credit contract, that is, the loan contract to which it relates. In Chapter 6, we recommend that, prior to the execution of the contract of guarantee, a prospective guarantor should receive a copy of the proposed contract of guarantee as well as the related credit contract, among other things.²¹ Those documents are intended to inform the prospective guarantor of what he or she is being asked to guarantee. In some cases, either or both documents may be revised before the guarantor finally accepts to be bound by the guarantee. In any case, once the contract of guarantee is executed, it is important that the guarantor be given a copy of the finalised documents.

9.17 Section 52 of the Consumer Credit Code provides that a credit provider must, not later than 14 days after a guarantee is signed and given to the credit provider, give the guarantor: (a) a copy of the guarantee signed by the guarantor; and (b) a copy of the credit contract or proposed credit contract. The credit provider need not comply with these requirements if it has previously given to the guarantor a copy of the relevant document.

9.18 The Banking Code contains a provision similar to s 52²² but, unlike the Consumer Credit Code, it extends to guarantees relating to small business loans. The Credit Union Code of Practice does not contain any equivalent provision.

RECOMMENDATION 9.2

The Model Law should contain requirements (similar to those found in s 52 of the Consumer Credit Code) that a lender must, not later than 14 days after a guarantee is signed and given to the lender, give the guarantor: (a) a copy of the guarantee signed by the guarantor; and (b) a copy of the credit contract.

RECOMMENDATION 9.3

The Model Law should contain requirements (similar to those found in s 163 of the Consumer Credit Code) that the lender give the guarantor, at the written request of the latter, during the life of the contract, a copy of the credit contract or guarantee.

9.20 At common law, there are cases indicating that a lender has no general obligation to supply the guarantor with ongoing information about the loan to the borrower.²³ In AD & JA Wright Pty Ltd v Custom Credit Corp Ltd,²⁴ a guarantor asserted an entitlement to inspect the documents in the possession of the lender relating to the indebtedness of the borrower on the basis that the guarantor wished to have the opportunity of calculating the extent of its indebtedness under the guarantee. The court concluded that there is no universal obligation upon a lender to disclose all facts relevant to dealings with the borrower or affecting the borrower’s credit and that, basically, it is left to the borrower to explain his financial position to the surety. In Ross v Bank of New South Wales²⁵ , the New South Wales Supreme Court held that a guarantor is entitled to know any amount due from time to time on the guaranteed loan, the interest rate charged on the loan, and the amount, if any, realised by the bank under its collateral securities. However, the court also held that the guarantor was not entitled to examine the borrower’s account or be given a copy of it, nor is the lender obliged to give to the guarantor details of the borrower’s specific transactions.

9.21 Section 34 of the Consumer Credit Code requires a credit provider to provide, at the request of the guarantor, the following information:

• the current balance of the debtor’s account;
• any amounts credited or debited during a period specified in the request;
• any amounts currently overdue and when each such amount became due; and
• any amount currently payable and the date it became due.²⁶

• 14 days if the information relates to period of one year or less, or
• 30 days if the information relates to a period of more than one year.²⁷

9.24 If a statement is not provided within the time required, s 35 of the Consumer Credit Code empowers the court to order the credit provider to provide the statement or itself determine the amounts in relation to which the statement was sought.

9.25 Under their code of practice, credit unions are required to send to a guarantor, on request by the guarantor, a copy of the latest relevant statements of account provided to the borrower.³¹ In contrast, banks do not appear to have such an obligation under their code. The Banking Code states that before taking a guarantee, banks must give notice to prospective guarantors that they can request information about the transaction or facility to be guaranteed.³² Considering its wording, it is doubtful whether the provision can be used by guarantors as a basis for access to information after signing the contract of guarantee. Even assuming it was intended to grant such access, the provision gives inadequate guidance as it does not specify its scope and limitations, in particular the types of information banks are obliged to provide to guarantors.

9.26 A number of submissions argued for the provision to guarantors of consumer and small business loans with the latest relevant statements concerning the borrower’s accounts.³³ It was said that the voluntary nature of the guarantee relationship was a strong reason for providing guarantors with information concerning the status of the loan.³⁴ Some submissions considered s 34 of the Consumer Credit Code to be an acceptable model.³⁵

The Commission’s conclusion

9.27 A guarantor’s liability is contingent on the performance by the borrower of his or her obligations under the loan contract. Amounts that are due and unpaid can potentially trigger the enforcement of the guarantee. The borrower’s current balance, especially at the time of default, may have a significant impact on the extent of the guarantor’s liability. It is, therefore, in the guarantors’ interests to keep themselves abreast of the progress of the loan that they have agreed to guarantee. There is probably a stronger argument for providing guarantors of small business loans with regular statements of amounts owing because the amounts involved are often much larger than consumer loans, and may fluctuate, and advances and repayments could be less regular. The common law remains unclear regarding the right of guarantors to acquire information about the status of the guaranteed loan, and the scope and limitations of such right, if it exists. As a consequence, both lenders and guarantors seem unaware or are confused about their specific obligations and entitlements in this context. For example, a guarantor who took part in the Lovric and Millbank study reported being told by the bank that she could not have access to information on the amount of debt then outstanding. It was only after she approached the bank on a subsequent occasion and this time armed with advice from the NSW Legal Aid Commission that the bank gave the information she needed.³⁶

9.28 To provide clarity and consistency to all parties involved, the Model Law should contain provisions on the right of guarantors to obtain information from credit providers during the life of the contract of guarantee. Those provisions should be in terms similar to s 34 of the Consumer Credit Code as to what information guarantors can access and the circumstances under which credit providers should be required to make the disclosure. The Model Law should further provide that, if a credit provider fails to provide a statement within the time required, the court may, on application by the guarantor, order the credit provider to provide the statement or itself determine the amounts in relation to which the statement was sought.

RECOMMENDATION 9.4

The Model Law should provide that guarantors should have a right to obtain information from lenders during the life of the guarantee, in terms similar to s 34 of the Consumer Credit Code. Further, the Model Law should contain a provision (similar to s 35 of the Consumer Credit Code) that, if a lender fails to give a statement within the time required, the court may, on application by the guarantor, order the lender to provide the statement or itself determine the amounts in relation to which the statement was sought.

9.29 The final type of information which guarantors should be entitled to receive from credit providers concerns default by borrowers. This is of utmost importance because it is the borrower’s default that triggers the guarantor’s liability and entitles the credit provider to enforce the guarantee. This matter is considered in Chapter 10.³⁷

Guarantor’s access to information and the Privacy Act 1988 (Cth)

9.30 Section 18N of the Privacy Act 1988 (Cth) (“Privacy Act”) regulates disclosure by credit providers of personal information in their possession or control. Section 18N(1) provides that a credit provider must not disclose a report that is in or has been in its possession or control, or personal information derived from the report. The term “report” is defined in s 18N(9) as including a record or information that has any bearing on an individual’s credit-worthiness, credit standing, credit history or credit capacity. It is arguable that a copy of the credit contract which a credit provider will be required to give to a guarantor under Recommendations 6.1, as well as the information regarding the loan which a guarantor will have access to pursuant to Recommendation 6.3, would fall within the definition of the term “report”, for purposes of s 18N of the Privacy Act, because they constitute information that have a bearing on the borrower’s credit history. The issue that arises is whether State legislation implementing these recommendations would be inconsistent with s 18N(1) of the Privacy Act. If so, such legislation would be inoperable pursuant to s 109 of the Constitution, which provides that when a law of the State is inconsistent with the law of the Commonwealth, the latter shall prevail.

9.31 Section 18N(1) is, however, subject to a number of exceptions. Particularly relevant to the issue is s 18N(1)(g), which allows disclosure of personal information if it is required or authorised by or under law. For the reasons outlined in Chapter 6, the Commission is of the view that the term “law” in s 18N(1)(g) includes State legislation.³⁸ Consequently, statutory provisions implementing Recommendations 6.1 and 6.3, which require disclosure by lenders to guarantors of personal information about borrowers, would not be inconsistent with the Privacy Act.

CHANGES TO OBLIGATIONS

9.32 The general law provides for a guarantor’s discharge from liability if the principal contract is changed in such a way that the guarantor could be prejudiced, whether or not the variation has in fact resulted in prejudice. If the borrower and lender, without the guarantor’s consent, “agree between themselves to alter the nature of the [principal] obligation the guarantor is discharged because the obligation in its altered form is not that which he guaranteed”.³⁹ However, the guarantor will remain liable where the alteration to the principal contract is either beneficial to the guarantor or is “obviously unsubstantial”, that is, it cannot by its nature increase the risk of the guarantor.⁴⁰ Examples of variations that will not discharge the guarantee are reductions in the borrower’s debt or in the interest payable by the borrower.

9.33 The principal contract may contemplate and provide for variation of its terms. An example is a mortgage permitting a variation in the interest rate. In such a case, a variation in the liabilities under the principal contract will not discharge the guarantor because there is a guarantee of a contract whose terms are not fixed and may vary from time to time.⁴¹ Alternatively, the contract of guarantee may itself allow variations to the principal contract. It may have this clause for example: “we agree that the guarantee shall not be avoided, released, or affected by the creditor making any variation or alteration in the terms of the principal agreement”. A clause of this nature will ensure that the guarantor continues to remain liable even if substantial changes to the principal loan are made.⁴² Another example is the “all moneys” clause, which is discussed in detail in Chapter 8.

9.34 Where there is no provision in the guarantee or in the loan contract preserving the liability of the guarantor in case of variations, the guarantor may still consent to changes. The general law does not prescribe a form of the guarantor’s consent, that is, it does not have to be in writing. In fact, the guarantor’s consent need not be express but may be inferred from the circumstances of the case. For example, in a case where the guarantor was a director of the borrower company and negotiated with the lender for the variation of the debt, the court rejected his argument that he did not assent to the variation in his capacity as a guarantor but only in his capacity as a director of the principal company.⁴³ Further, the issue of whether lenders are required to disclose to the guarantor all the material facts concerning the variation remains unsettled at common law.⁴⁴

Increase in liabilities

9.35 For guarantees that relate to credit contracts taken out for consumer purposes, s 56(1) of the Consumer Credit Code provides:

56. (1) If the terms of a credit contract are changed to increase or allow for an increase in liabilities, the liabilities of a guarantor under a guarantee that secures those liabilities are not increased unless-

(a) the credit provider gives to the guarantor a written notice setting out particulars of the change in the terms of the credit contract; and

(b) the credit provider has subsequently obtained from the guarantor a written acceptance of the extension of the guarantee to those increased liabilities or obtained acceptance in some other form provided for by the regulations.

9.37 Unlike the common law, s 56 requires the credit provider to notify the guarantor of changes to the principal contract that result in an increase in liabilities. Moreover, the guarantor’s consent to the changes must be given expressly and in writing. The enhanced protection to guarantors contained in this section ought to be a starting point for the Model Law. However, the Commission is of the view that the provisions of the Consumer Credit Code should be expanded in the manner suggested in the following paragraphs.

9.38 First, there is a need to clarify the nature of the information the lender needs to give to the guarantor. There is uncertainty regarding the requirement to give the guarantor “particulars of the change in the terms of the contract”. It is likely that giving the guarantor a copy of the revised credit contract would satisfy this requirement. This may not, however, adequately inform the guarantor about the proposed changes: the document may not even mean anything to the guarantor. We consider that, in addition to furnishing the guarantor a copy of the proposed revised contract, the lender must also explain in plain language the details of the changes, in particular the old and new positions. In other words, the written notice should include details of the existing term of the contract to be changed (for example, the original amount of loan or current interest rate option) and details of the terms as changed (for example, the new loan amount or revised interest option). The lender should disclose all the material facts concerning the proposed variation to make the guarantor understand the full implications of the changes and enable him or her to make an informed decision.

9.39 Secondly, s 56 of the Consumer Credit Code is silent on when the requirements it contains must be met. Can the lender notify the guarantor after it has already settled the variations to the principal contract with the borrower? Would a guarantor’s acceptance after the variation has been made be effective to preserve the contract of guarantee? A liberal construction of the section would allow a lender to secure compliance with both requirements after it has already agreed with the borrower for an increase in liabilities. The better approach is for the lender to comply with these requirements before settling with the borrower the proposed increase in liabilities.

9.40 Thirdly, where a guarantor does not agree to the increase in liabilities but the lender and borrower go ahead with the changes in any event, the Model Law should provide that the guarantor will not be liable for the increased amount but his or her liability for the amount originally guaranteed remains. This would be a departure from the common law position under which the guarantee in its totality would be discharged.⁴⁶

RECOMMENDATION 9.5

The Model Law should contain provisions governing increases in liabilities similar to those in s 56 of the Consumer Credit Code, subject to some clarifications. First, the lender must give the guarantor, in addition to a copy of the proposed revised contract, a written notice explaining in plain language all the material facts concerning the proposed changes in the loan transaction to which the guarantee relates. Secondly, the lender must comply with these requirements before the changes have been settled with the borrower. Finally, failure by the lender to comply with these requirements should result in the guarantor not being liable for the increased amount although remaining liable for the amount originally guaranteed.

9.41 Section 65 of the Consumer Credit Code requires a credit provider to notify the relevant parties of agreed changes to a credit contract, mortgage or guarantee. It contains what is essentially a post-change notice requirement intended to reinforce the Code’s protections to guarantors and which therefore ought to be adopted in the Model Law. Its subsection (1) provides:

If the parties under a credit contract, mortgage or guarantee agree to change its terms, the credit provider must, no later than 30 days after the date of the agreement, give to the other party under the agreement a written notice setting out—

(a) particulars of the change in the terms of the credit contract, mortgage or guarantee; and

(b) any information required by the regulations.

Maximum penalty — 100 penalty units.

9.43 Section 65(2) provides that subsection (1) does not apply to

• a change which defers or otherwise reduces the obligations of the debtor for a period not exceeding 90 days, or
• an agreement to increase the amount of credit under the credit contract.

9.45 For purposes of the Model Law, s 65 should be improved as regards the contents of the notice. Section 65(1) provides that the notice must include “particulars of the change in the terms of the credit contract, mortgage or guarantee”. However, s 65(3) allows the credit provider to give a person particulars only of a matter as changed instead of particulars of the change if the credit provider:

• makes it clear to the person that the matter has changed; or
• issues to the person a new set of terms and conditions relating to the credit provider a new set of terms and conditions.

RECOMMENDATION 9.6

The Model Law should adopt s 65 of the Consumer Credit Code concerning the notice requirement in relation to changes by agreement to the credit contract or guarantee. It should, however, state that in every case the written notice must explain in plain language all the material facts concerning the changes.

9.46 Section 63 of the Consumer Credit Code governs unilateral changes to the terms of the guarantee by the credit provider where the guarantee contains a provision authorising the credit provider to do so.

63. (1) A credit provider must not exercise a power under a credit contract, mortgage or guarantee to unilaterally change its terms without giving the other party, not less than 20 days before the change takes effect, written notice setting out-

(a) particulars of the change in the terms of the contract, mortgage or guarantee; and

(b) any information required by the regulations.

Maximum penalty – 100 units

(2) Subsection (1) does not apply to a change that reduces the obligations of the debtor, or extends the time for payment, under the credit contract. The credit provider must, however, give particulars of any change before or when the next statement of the account is sent to the debtor after the change takes effect.

Maximum penalty – 100 penalty units.

9.48 It has been suggested that it is unusual for a guarantee to contain a provision empowering the credit provider to make unilateral changes to the terms of the guarantee.⁵⁰ Nevertheless, the Model Law should have provisions similar to those in s 63 to regulate such situations, rare as they might be. However, the provision in s 53 concerning the contents of the notice - that it should contain “particulars of the change” - needs to be modified. Consistent with Recommendations 9.5 and 9.6, the Mode Law should state that the notice must explain in plain language all the material facts concerning the proposed changes to the guarantee.

RECOMMENDATION 9.7

The Model Law should contain provisions regulating unilateral changes by the lender to the terms of the guarantee, similar to those found in s 63 of the Consumer Credit Code. It should, however, clarify that the written notice should explain in plain language all the material facts concerning the proposed changes.

1. Consumer Credit (New South Wales) Code s 53(1).

2. J Lovric and J Millbank, Darling, please sign this form: a report on the practice of third party guarantees in New South Wales (NSW Law Reform Commission and the University of Sydney, Research Report 11, 2003).

3. R Viney, Review of the Code of Banking Practice ((RTV Consulting Pty Ltd, 2001) at 62.

4. Code of Banking Practice (2004) cl 28.11(a).

5. Lovric and Millbank at para 5.38 quoting an extract from the guarantor wife’s evidence in Brueckner v The Satellite Group (Ultimo) Pty Ltd [2002] NSWSC 378.

6. Lovric and Millbank at para 5.39.

7. Lovric and Millbank at para 5.40.

8. Westpac Banking Corporation v Mitros [2000] VSC 465. Similarly, in Robinson v Watts [2000] NSWSC 584, the wife found out that she was to sign documents giving security over her home for her husband’s business debts when in the car with her husband driving to the solicitor’s office. The solicitor was the lender’s solicitor who advised the wife and provided a certificate that the wife understood the documents. In addition, the husband was present at the time. The wife was unsuccessful in defending the bank’s enforcement of the security.

9. Lovric and Millbank at para 5.41.

10. Women Lawyers Association of NSW, Submission at 7; Women’s Legal Resources Centre, Submission at 9; Country Women’s Association of NSW, Submission at 2; Financial Counsellors’ Association of NSW, Submission at 3, 4; Ryde-Eastwood Financial Counselling Service, Submission at 6.

11. Financial Counsellors’ Association of NSW, Submission at 3.

12. St George Bank, Submission at 4; Commonwealth Bank, Submission at 11; Australian Finance Conference, Submission at 18; NSW Young Lawyers, Submission at 7; Australian Credit Forum, Submission at 3.

13. St George Bank, Submission at 4; NSW Legal Aid Commission, Submission at 17; Commonwealth Bank, Submission at 11.

14. Recommendation 6.6.

15. Lovric and Millbank at para 6.1

16. See, for example, S Singh, For Love Not Money: Women, Information and the Family Business (Consumer Advocacy and Financial Counselling Association of Victoria Inc, 1995) at 18-19. See also B Fehlberg, Sexually Transmitted Debt: Surety Experience and English Law (Clarendon Press, 1997) at 236.

17. Lovric and Millbank at para 6.4.

18. Lovric and Millbank at para 6.8, 6.11.

19. Lovric and Millbank at para 6.12.

20. [2000] FCA 1467.

21. Recommendation 6.1.

22. Code of Banking Practice (2004) cl 28.7.

23. Davies v London & Provincial Marine Insurance Co (1878) 8 Ch D 469 at 474-476 (Fry J); Small v Currie (1854) 2 Drew 102 at 120-121; 61 ER 657 at 664 (Sir R T Kindersley VC).

24. (1992) 108 FLR 45.

25. (1928) 28 SR (NSW) 539.

26. Consumer Credit (New South Wales) Code s 34(1). Although the provision is silent on this point, it is presumed that the 14 and 30-day periods are to be calculated from the date of receipt of the request.

27. Consumer Credit (New South Wales) Code s 34(2).

28. Consumer Credit (New South Wales) Code s 34(3).

29. Consumer Credit (New South Wales) Code s 34(4).

30. Consumer Credit (New South Wales) Code s 34(5).

31. Credit Union Code of Practice (1994) s 17.6(iii).

32. Code of Banking Practice (2004) cl 28.4(v). Emphasis supplied.

33. Women’s Legal Resources Centre, Submission at 7-8; NSW Department of Fair Trading, Submission at 5; Women Lawyers Association, Submission at 4; NSW Legal Aid Commission, Submission at 15; St George Bank, Submission at 4. See also Country Women’s Association of NSW, Submission at 2; Financial Counsellors’ Association of NSW, Submission at 3.

34. NSW Legal Aid Commission, Submission at 15.

35. St George Bank, Submission at 3; Australian Finance Conference, Submission at 15.

36. Lovric and Millbank at para 6.9.

37. See para 10.11-10.19.

38. See para 6.17-6.29.

39. Hancock v Williams (1942) 42 SR (NSW) 22 at 255 (Jordan CJ).

40. Ankar Pty Ltd v National Westminster Finance (Australia) Pty Ltd (1987) 162 CLR 549; Bond v Hongkong Bank of Australia Ltd (1991) 25 NSWLR 286.

41. J O’Donovan and J Phillips, The Modern Contract of Guarantee (3rd edition, LBC Information Services, North Ryde NSW, 1996) at 346.

42. See for example British Motor Trust Ltd v Hyams (1934) 50 TLR 230.

43. Winstone Ltd v Bourne [1978] 1 NZLR 94.

44. It is possible that Australian courts may require a lender to give the guarantor a detailed explanation of the type of variation envisaged: J O’Donovan and J Phillips The Modern Contract of Guarantee (3rd edition, LBC Information Services, North Ryde NSW, 1996) at 353.

45. See Consumer Credit (New South Wales) Code s 56(2) in relation to s 58(2)(a), 58(2)(b), 59-61.

46. See para 9.32.

47. Morton v Hampson [1962] VR 364 at 365.

48. Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 444 (Gibbs J).

49. See Consumer Credit (New South Wales) Code s 63(3).

50. Consumer Credit Legislation Commentary (CCH Australia Limited, Sydney, 2004) at ¶39-420.