JUDGES: WINNEKE, P., ORMISTON and BATT, JJ.A.
WHERE HELD: MELBOURNE
DATES OF HEARING: 19 and 20 April 1999
DATE OF JUDGMENT: 30 July 1999
MEDIA NEUTRAL CITATION: [1999] VSCA 108

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MORTGAGE – Effect of registration under Transfer of Land Act 1958 – Indefeasibility – Exception as to "fraud" in ss.42-44 – Need to establish personal dishonesty or conscious impropriety – Witness attesting signature of mortgage aware that mortgagor not present but not aware that signature signed, nor was witness shown to have been aware of intent to register or of purpose of attestation – Registration effected later by other persons – Responsibility of mortgagee bank for acts of witness, a clerk employed by its solicitor.

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APPEARANCES: Counsel Solicitors
For the Appellant Mr B.F. Monotti T.F. Grundy
For the First Respondent Mr W.F. Lalley Q.C. and Hyetts
Mr M. Morrison
For the Second Respondent Mr C. Gunst Q.C. Tress Cocks & Maddocks

WINNEKE, P.:

For the reasons assigned by Ormiston, J.A., which I have had the advantage of reading in draft, I agree that this appeal should be dismissed.

ORMISTON, J. A.:

This appeal raises issues as to the nature of "fraud" as a statutory exception to the doctrine of indefeasibility under the Torrens system and as to the categories of people for whose allegedly fraudulent acts a person taking an interest under the Transfer of Land Act 1958 is responsible. The appellant in the present case was sued by the first respondent Bendigo Bank Ltd. ("the bank"), which also brought proceedings against the second respondent, Charles Reichman, who was its solicitor, in relation to a transaction by way of collateral mortgage over the appellant's home at 68 Newell Street, Footscray in favour of the bank, which was challenged by the appellant on a number of grounds including non est factum, forgery, unilateral mistake of fact, special disadvantage and unconscionable conduct. Some of these allegations disappeared in the course of the trial, for the appellant's claims arose essentially out of the fact that what appeared to be her signature on the collateral mortgage securing a business loan to her daughter and son-in-law was, so the latter admitted, a forgery.
It was not suggested that the bank was responsible for the forgery but an additional allegation arising out of that act was a claim that the purported signature of Mrs Russo was falsely attested by a clerk employed by Mr Reichman, one Rita Gerada. The mortgage in question bore a conventional signing and attestation clause: "SIGNED SEALED AND DELIVERED by the said BRIGIDA RUSSO in the presence of: ... Witness". In circumstances which will have to be examined in more detail, Miss Gerada said that, although she could not remember the specific occasion which occurred on or about 15 August 1989, she had been under specific instructions…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Russo v Bendigo Bank Ltd

Details

AGLC: Russo v Bendigo Bank Ltd [1999] VSCA 108
Case: [1999] VSCA 108
Decision Date: 30 July 1999

CaseChat Overview and Summary

The case of Russo v Bendigo Bank Ltd was heard by the Supreme Court of Victoria, where the plaintiff, Mr Russo, sought to challenge the registration of a mortgage held by the defendant, Bendigo Bank Ltd. The dispute arose from the registration of a mortgage over Mr Russo's property, which he claimed was obtained through fraud and misrepresentation by the bank's employees. The central legal issue in this case was whether the bank could be held liable for the actions of its clerk, who attested to the signature of Mr Russo on the mortgage documents, despite the fact that Mr Russo was not present when the signature was made.

The court was required to determine whether the bank could be held accountable for the clerk's actions, given that the clerk was aware that Mr Russo was not present but was not aware that the signature was being made, nor was there evidence that the clerk was aware of the intent to register the mortgage or the purpose of the attestation. The court had to consider the exceptions to indefeasibility of title under the Transfer of Land Act 1958, specifically the fraud exception, and whether the bank could be considered to have been personally dishonest or consciously improper in its conduct. The court also needed to assess the extent to which the bank was responsible for the actions of its clerk, an employee of its solicitor.

The Supreme Court held that the bank was not liable for the actions of the clerk, as there was no evidence that the clerk was aware of the intent to register the mortgage or the purpose of the attestation. The court found that the bank could not be held personally dishonest or consciously improper, as the clerk's actions were not within the scope of their employment or within the bank's control. The court further held that the bank was not responsible for the clerk's failure to ensure that Mr Russo was present when signing the mortgage documents, as the clerk's actions did not amount to fraud. The court concluded that the registration of the mortgage was valid and binding, and the bank's title to the property was indefeasible. The plaintiff's claim was dismissed, and the bank's registration of the mortgage was upheld.

Orders