Perpetual Trustees Victoria Ltd v English

Perpetual Trustees Victoria Ltd (the mortgagee) appealed to the Court of Appeal of New South Wales against the dismissal of its claims against Ms English and Mr English. The dispute concerned a registered mortgage over property jointly owned by Ms English and Mr English. Mr English had forged Ms English's signature on the mortgage documents and on a loan agreement to which the mortgage referred. Perpetual sought to enforce the mortgage against Ms English, who was an innocent joint proprietor, and to obtain remedies against Mr English, the perpetrator of the forgery.

The central legal issues before the Court of Appeal were whether the registered mortgage, on its proper construction, secured a debt owed by both joint proprietors, whether the mortgagee was entitled to possession of the property as against the innocent joint proprietor, and whether the mortgagee was entitled to a remedy against the joint proprietor who committed the forgery.

The Court of Appeal reasoned that the mortgage, by its terms, secured a loan agreement which Mr English had forged. As Ms English had not signed the loan agreement, she was not indebted to Perpetual under that agreement. Consequently, the mortgage did not secure any debt owed by Ms English, and Perpetual was not entitled to enforce the mortgage against her interest in the property. However, the Court found that Mr English was liable for the debt and had acted fraudulently. The Court allowed Perpetual's appeal against the dismissal of its claim against Mr English, granting leave to amend the statement of claim to pursue relief against him. Perpetual was ordered to pay Ms English's costs of the appeal, while Mr English was ordered to pay Perpetual's costs of the appeal against him.