Abdullah Hadid v Abeedah Khan (as trustee for the Khan Family Trust)

Abdullah Hadid (the claimant) sought to strike out the defence and cross-claim of Abeedah Khan (the defendant), as trustee for the Khan Family Trust, in proceedings concerning a forged mortgage. The dispute arose from a mortgage registered over land owned by the claimant, which the claimant alleged was a forgery. The claimant argued that the defendant had notice of the forgery prior to registration, making the mortgage void under section 42(1) of the *Real Property Act 1900* (NSW). The matter came before the Court of Appeal of New South Wales.

The primary legal issue before the Court of Appeal was whether the claimant had an arguable case for the fraud exception to indefeasibility of title under section 42(1) of the *Real Property Act 1900* (NSW). Specifically, the court had to determine if the defendant's knowledge of the forgery prior to registration was sufficient to establish fraud in the context of the Act, thereby rendering the registered mortgage defeasible.

The Court of Appeal found that the claimant had an arguable case for fraud. The court reasoned that if the defendant, through its agent, was aware that the mortgage was a forgery before it was registered, this knowledge could constitute fraud for the purposes of section 42(1). The court noted that the claimant's assertion that he had informed the mortgagee of the forgery prior to registration, causing the mortgagee anxiety to register as soon as possible, supported the existence of an arguable case. The court allowed the appeal, set aside the order for summary judgment, and dismissed the application for summary judgment. The claimant was granted leave to re-plead the fraud exception in their defence and, if advised, by way of cross-claim, with this issue to be the sole matter for trial.