Hadid v Khan (No 2) [2008] NSWSC 119

In this case the registered mortgage was a forgery. Normally that would not stop it from being enforceable due to the principle of indefeasibility of title. As the judge in this case put it:

The most fundamental feature of the system of land title in Australia is indefeasibility of title under which feature the State guarantees the title of those with a registered interest in land to the extent of that interest. The principle is so important, and adherence to it so essential, that registered title can be successfully challenged only in the most exceptional circumstances.

The court found however that because the lender, through its agents, became aware the owners of the property denied signing prior to registration (in between settlement and registration) and because the letter of offer promised to only register if there was a default in payment of interest it was found there was additional fraud by the lender which defeated the indefeasibility principle. This was a case where the lender would have prevailed but for their poorly drafted documents. If you are concerned that your documents are poorly drafted contact Bransgroves Lawyers to fix them.

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