Bank of South Australia Limited v Kenneth Edward Ferguson No. SCGRG 94/816 Judgment No. 5521 Number of Pages 37 Mortgages Real Property

The appeal by the Bank of South Australia Limited against the decision of Legoe AJ in the Supreme Court of South Australia was dismissed. The cross-appeal by Kenneth Edward Ferguson was also dismissed. The central issue in the case was whether the bank could recover the loans it had advanced to Ferguson, and if not, whether Ferguson was entitled to any damages or restitution from the bank. The Full Court of the Supreme Court of South Australia, comprising Matheson, Bollen, and Millhouse JJ, held that the bank could not recover the loans due to the fraudulent actions of its employee, Mr McMellon, who forged Ferguson's signature on a statement of position document and altered other financial documents without Ferguson's knowledge. The court found that the parties were not ad idem when the mortgage was executed and the facility offer was accepted, which rendered the contract unenforceable. Additionally, the court held that the bank could not rely on its own fraudulent actions to seek restitution of the loans advanced, as this would contravene principles of good conscience and practical justice. The case was remitted back to the trial court for further consideration of Ferguson's claims for damages and restitution, subject to any limitations imposed by the Limitation of Actions Act.