BankWest v Tannous [2010] NSWSC 1319

The borrowers alleged their son forged the mortgage. Normally under these circumstances the borrowers would still have to give the lender credit for any amount paid by the lender to discharge a previous mortgage. However in this case the borrowers alleged the previous mortgage was also forged by their son. To make out their claim they cross-claimed against the previous lender. The Judge held that it is unnecessary to join a prior lender for this purpose commenting:

If it can be shown that the pre-existing liability was itself unenforceable or unjust in whole or in part, the discretionary order made in respect of the unjust contract sued upon would take account of that unenforceability or that unjustness. To do so, there would be no necessity to join the prior mortgagee because no order or relief would be sought, nor would need to be sought, against that mortgagee. Because that loan agreement has been fully performed and discharged, and because any pre-existing mortgage has itself been discharged, there is no longer a justiciable issue between the borrower and the prior mortgagee/lender.

Click here to read the full judgment

Scroll to Top