Perpetual Trustees Victoria v Van den Heuval No 2 [2009] NSWSC 483

In this case the husband left his wife the following note:

“I’m very sorry what I have done but I have had a very bad gambling problem and I have borrowed money on the house and I can’t repay it. Now they are taking the house…”

The drafting of the mortgage meant that it was indefeasible and the lender was entitled, notwithstanding the forgery, to recover its entire debt from the sale of the house. This meant that as the victim of a fraud which had cheated her out of a registered interest, the wife was entitled to compensation from the Torrens Assurance Fund.

The wife brought proceedings against the Registrar General of the Land Title Office, seeking more compensation than the Registrar General was prepared to give. The wife claimed she should be entitled to compensation to put her back in the position she was in prior to the registration of the forged mortgage. Under this formula, she sought enough money to pay out the entire mortgage.

However, the Registrar General argued that as she only had a one-half interest in the property, she had only lost the value of a half share of the property being unencumbered. The judge agreed and set the measure of compensation accordingly.

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