Permanent Custodians v Tony Geagea [2010] NSWSC 117

In this case the borrowers were three brothers who mortgaged their jointly-owned property. Two of the brothers alleged that the third brother (who is bankrupt) forged their signature. One of them had a very convincing alibi. He pointed out that at the time the document was executed he was in custody in Lebanon in respect of a criminal charge. At the time of this judgment he was still in that custody in Lebanon.

As always with forged mortgages, the question comes down to whether or not the mortgage was drafted so as to take advantage of the concept of indefeasibility. Bransgroves Lawyers continually warns lenders not to use all monies mortgages. However, despite the raft of recent cases – Perpetual Trustees Victoria Limited v Tsai [2004], Printy v Provident Capital Limited [2007], Chandra v Perpetual Trustees Victoria Ltd [2007], Yazgi v Permanent Custodians Limited [2007], Perpetual Limited v Costa [2007], Perpetual Trustees Victoria Limited v Ford [2008], Perpetual Trustees Victoria Ltd v Van den Heuvel [2008], Vella v Permanent Mortgages [2008], Provident Capital v Printy [2008] CA, Perpetual Trustees Australia v Richards [2008], Australian Regional Credit v Mula [2009], Perpetual Trustees Victoria v Ann-Marie Menzies [2009], Perpetual Trustees Victoria v English [2009] – lenders continue to use them.

As can be seen from the list above there are some recurring names. Some lenders just do not learn their lesson. The lender in this case already lost in the Yazgi case but continued to use them. In this case, on the basis the lender used an all monies clause, the borrower sought an immediate determination (without having to go to full blown trial) of the separate question as to whether or not the mortgage was indefeasible. The judge agreed and the discrete issue will be decided in advance of a full blown trial.

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