Bidmonta v Georgiou [2011] NSWSC 227

A son raised a loan secured over his mother’s land and made no repayments. A director of the lender swore in an affidavit that he had a conversation with the son in which the son said he had forged his mother’s signature. The lender claimed possession and lodged a caveat claiming under the unregistered mortgage and also damages against the son for forging his mother’s signature.

The solicitor witnessing the mother’s signature on the mortgage did not verify the mother’s identify. The mother claimed she was not fluent in English. The court did not believe her. Nevertheless the court found that the signature was not that of the mother but a forgery (noting it was strikingly different from her signatures on her passport and other cards) and committed by the son. 

The court rejected the lender’s claim:

  1. that the mortgage was valid and binding; and
  2. for possession.

This was because, being unregistered the mortgage did not have the benefit of indefeasibility. Once a finding of forgery was made the document became a nullity at law and it bestowed no more right to the land than a sheet of blank paper would.

The son ceased instructing his solicitor the day before the trial and the solicitor was given leave to file a notice of ceasing to act. As he did not appear in person his defence was struck out. The lender then sought judgment against the son. The court noted the test for a finding of fraud was an actual persuasion of its occurrence and found that the son had forged his mother’s signature, consistently with his admission. Judgment entered for the amount outstanding under the loan.

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