CTC Group Pty Ltd v Perpetual Trustee Company Limited

CTC GROUP PTY LTD
V
PERPETUAL TRUSTEE COMPANY LIMITED
[2013] HCASL 16
S250/2012

The applicant ("CTC") submitted an application for a secured loan in the sum of $480,000 to be advanced by the respondent, Perpetual Trustee Company Limited ("Perpetual") to Mr David El-Bayeh. Attached to the application was a form apparently signed by Mr El-Bayeh together with a document signed by Mr Naaman of CTC verifying Mr El-Bayeh's identity as the loan applicant. Funds were subsequently advanced pursuant to a loan agreement, which was also apparently signed by Mr El-Bayeh.
Perpetual commenced proceedings in the Supreme Court of New South Wales against Mr El-Bayeh and CTC following default under the loan agreement. The primary judge (McCallum J) accepted Mr El-Bayeh's evidence that the signatures on the loan application, loan agreement and mortgage were forgeries. Her Honour was not satisfied that CTC was in breach of the terms of a deed between CTC and Perpetual, which required it to take reasonable care to identify the proposed borrower. The proceedings against each of the defendants were dismissed.
The Court of Appeal of New South Wales (Macfarlan, Meagher and Barrett JJA) upheld Perpetual's appeal against the dismissal of its claim against CTC. The Court found, contrary to the view taken by the primary judge, that it was probable that Mr Naaman had not compared the original passport photograph with any person purporting to be Mr El-Bayeh. It observed that a comparison between an individual and an original passport photograph provides a highly reliable means of identification[1]. A further reason for upholding Perpetual's appeal was a statement made by CTC's managing director, Michael Saadie, to Mr El-Bayeh, which the Court of Appeal held amounted to an admission that CTC submitted the loan application to Perpetual without interviewing the applicant[2].
[1]Perpetual Trustee Company Ltd v CTC Group Pty Ltd [2012] NSWCA 252 at [27]-[28].
[2]Perpetual Trustee Company Ltd v CTC Group Pty Ltd [2012] NSWCA 252 at [30]-[31].
The applicant seeks special leave to appeal. No question of law of public importance is raised by the application, which seeks to canvass unremarkable conclusions drawn by the Court of Appeal from the unchallenged evidence. If special leave were granted the appeal would have insufficient prospects of success.
The application is refused.
Pursuant to r 41.11.1 we direct the Registrar to draw up, sign and seal an order dismissing the application with costs.

J.D. Heydon
26 February 2013 V.M. Bell

CaseChat Overview and Summary

In this case, CTC Group Pty Ltd applied for special leave to appeal a decision of the Court of Appeal of New South Wales in a matter concerning the liability of CTC for a forged signature on a loan application. The loan application, which was submitted to Perpetual Trustee Company Limited, was purportedly signed by Mr David El-Bayeh, who sought a loan of $480,000. The loan was granted, but Perpetual later discovered that the signatures on the application and related documents were forgeries. The Supreme Court of New South Wales dismissed Perpetual's claims against both CTC and Mr El-Bayeh, but this decision was overturned by the Court of Appeal.

The primary legal issue before the Court was whether special leave should be granted to appeal the decision of the Court of Appeal. The applicant argued that the Court of Appeal had erred in its interpretation of the evidence and had overlooked certain factors. However, the Court held that the Court of Appeal's decision was based on the unchallenged evidence presented to it and did not involve any question of law of public importance. Additionally, the Court found that the appeal had insufficient prospects of success.

The Court rejected the applicant's argument that the Court of Appeal had erred in its interpretation of the evidence, stating that the Court of Appeal had drawn conclusions from the evidence that were not unreasonable. The Court also held that the statement made by CTC's managing director, Michael Saadie, amounted to an admission that CTC had submitted the loan application to Perpetual without interviewing the applicant, which was a breach of the terms of the deed between CTC and Perpetual. The Court further held that the Court of Appeal's finding that it was probable that Mr Naaman had not compared the original passport photograph with any person purporting to be Mr El-Bayeh was not unreasonable.

The Court refused the applicant's application for special leave to appeal and directed the Registrar to draw up, sign and seal an order dismissing the application with costs. The Court held that the application did not raise any question of law of public importance and that the appeal had insufficient prospects of success. The Court also held that the Court of Appeal's decision was based on the unchallenged evidence and that there was no basis for the applicant to argue that the Court of Appeal had overlooked certain factors.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established