Perpetual Trustees Victoria v Cipri [2009] NSWSC 335

This decision of Hall J was the tail end of protracted proceedings concerning a forged mortgage. The substantive judgment was handed down in October 2008 in Perpetual Trustees Victoria v Cipri [2008] NSWSC 1128. This decision dealt with the question of costs.

The defrauded owner of the property hedged his bets by: cross-claiming against the lender’s possession proceedings; and suing the Torrens Assurance Fund for compensation. The cross-claim sought Contracts Review Act relief notwithstanding that it is settled law that such an application is incompatible with a claim of non est factum (forgery). He failed against the lender but succeeded against the Torrens Assurance Fund (The Registrar of Land Titles). At one point during the proceedings the lender issued a Calderbank letter and now sought indemnity costs against the owner from that date. The Court determined that the offer did not represented a true offer of compromise and in any event the owner was not behaving unreasonably in rejecting it.

A surprising turn came when His Honour refused to make an order that the Torrens Fund re-imburse the owner for the costs he had to pay to the lender. In this regard, His Honour noted:

By reason of the absence of a basis for the cross-claim against Perpetual, I do not believe it can be said that any loss associated with its pursuit, namely, a costs order against Mr Cipri, can be said to have the requisite causal connection with the principal subject of the litigation.

The case is therefore authority for the proposition that the Registrar General will not be liable for unreasonable actions taken by defrauded owners. Those defrauded are therefore well advised to obtained experienced and competent legal representation to avoid being left seriously out of pocket – as this owner was.

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