| Jay of the Wood |
Sounds like your Paladin broke a truce, which I consider dishonorable. His overall goal seems fine, by and large freeing prisoners is both lawful and good, but Paladins are judged by their means as well. Breaking a truce is not lawful, even if he believed his enemy was about to do the same.
If your player disputes the that it was dishonorable, point out that he lied, which is also disallowed by the Code. Whether or not he falls is up to you, but if I were his GM (based on limited knowledge) I wouldn't fall him but give him some kind of warning. Maybe that night he has dream from his diety, telling him to mend his ways. Or maybe he loses his powers for a day. Sounds like your player will be skirting that line for much of his career, a good warning might convince them to straighten up. If not, it gives you rhetorical cover for later when you finally fall him.
Playing a Paladin isn't easy, nor should it be. They are meant to be moral paragons, the best humanity (or whomever) has to offer. They are chosen by the gods for their purity and moral strength. Few people can measure up to that kind of example.