Provident Capital Ltd v Printy

Provident Capital Ltd appealed to the New South Wales Court of Appeal against a decision of the primary judge concerning a forged mortgage. The dispute involved the enforceability of a registered mortgage over land owned by the respondents, Mr. and Mrs. Printy, which had been executed by Mr. Printy using a forged signature of Mrs. Printy. Provident Capital sought to enforce the mortgage and exercise its power of sale.

The Court of Appeal was required to determine whether the indefeasibility of title provisions under the *Real Property Act 1900* (NSW) extended to the payment covenants contained within the registered mortgage, despite the forgery. It also had to consider the interaction between the principles of contractual interpretation and the *Real Property Act*, specifically whether a separate deed of loan, to which the mortgage referred, was incorporated into the registered mortgage in a way that affected the enforceability of the payment obligations. The court also considered whether a default had occurred that would activate the power of sale.

The Court of Appeal, by majority, held that the indefeasibility of title conferred by registration under section 42 of the *Real Property Act* extended to the personal covenants within the registered mortgage, including the covenant to repay the loan. The court reasoned that the mortgage, as a registered instrument, conferred an indefeasible title to the mortgagee, Provident Capital, in respect of the rights and obligations it created, notwithstanding the forgery of Mrs. Printy's signature. The court found that the deed of loan was incorporated by reference into the mortgage, and the terms of the deed, including the payment obligations, were therefore part of the registered mortgage. The court also found that a default had occurred, activating the power of sale.

Consequently, the Court of Appeal dismissed Provident Capital's appeal and also dismissed the cross-appeal filed by the first respondent.