C & M Duran v Zhong Bao Liu [2007] NSWSC 893

In this case one of two guarantors (Ms Hou and Mr Liu) claimed her signature on the mortgage and guarantee were forgeries. The solicitor who witnessed her signature (Mr Woo) admitting to fraudulently witnessing her signature but claimed she told him to do so. Mr Liu admitted to forging Ms Hou’s signature but said Mr Duran (the principal of the lender) told him to. Referring to the evidence of Woo, Liu and Duran Justice Simpson said:

“Other than where there existed documentary or other objectively verifiable evidence to confirm what any of these witnesses said, I am hesitant to accept any account, or, indeed, any single fact, asserted by any of them. Putting it as neutrally as I can, I am not satisfied that any was telling, or attempting to tell, the truth. I would not be prepared to act upon the evidence of any of the three unless it were corroborated … Not only am I not satisfied that these witnesses were not telling the truth. I am affirmatively satisfied that each was positively untruthful. I am quite satisfied that the correct version of events has never seen the light of day in these proceedings”

His Honour determined that the lender knew of the forgery of Ms Hou’s signature and therefore held that indefeasibility of title failed he could not have recourse to her half of the security. His Honour referred the judgement to the authorities to investigate the forgeries of Mr Liu and the false witnessing of signatures by Mr Woo (a solicitor).

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