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Titles Strata Management Pty Ltd v Nirta

Titles Strata Management Pty Ltd v Nirta

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Case Copied 15 May 2015 81 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2011 7030

TITLES STRATA MANAGEMENT PTY LTD (ABN 32 001 119 331)	Plaintiff
v
FRANK NIRTA AND OTHERS (according to the schedule attached)	Defendants

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	17-18 June, 20 June, 14-15 and 22 August 2014
DATE OF JUDGMENT:	15 May 2015
CASE MAY BE CITED AS:	Titles Strata Management Pty Ltd v Nirta
MEDIUM NEUTRAL CITATION:	[2015] VSC 187 Revised 26 May 2015

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EVIDENCE – Standard of proof – Civil proceedings – Whether signatures were forged – Strength of evidence required to meet standard – Briginshaw v Briginshaw (1938) 60 CLR 336 applied.

EVIDENCE – Credibility and weight – Party’s failure to adduce evidence on fact in issue – Adverse inference – Application of Jones v Dunkel (1959) 101 CLR 298.

PRINCIPAL AND AGENT – Whether finance broker agent of lender – Whether broker acting for borrower or lender – Sub-agent.

REAL PROPERTY – Torrens system – Registration – Indefeasibility of title – Exception in case of fraud – Forged signature – Transfer of Land Act 1958 s 42 – Followed Perpetual Trustees Victoria Ltd v Xiao and anor [2015] VSC 21 – Fraud not imputed to lender – Russo v Bendigo Bank Ltd [1999] 3 VR 376, Macquarie Bank Ltd v Sixty Fourth Throne Pty Ltd [1998] 3 VR 133, Pyramid Building Society (in liq) v Scorpion Holdings Pty Ltd [1998] 1 VR 188, Beatty v Australian and New Zealand Banking Group Ltd [1995] 2 VR 301 and Australian Guarantee Corporation Ltd v De Jager [1984] VR 483 considered.

REAL PROPERTY – Torrens system land – Whether registered mortgage secures amount owing under forged loan agreement – Perpetual Trustees Victoria Ltd v Xiao and anor [2015] VSC 21 followed and applied – Solak v Bank of Western Australia Ltd [2009] VSC 82 not followed.

SUBROGATION – Whether third party payer of an extinguished debt entitled to the benefit of all contractual rights of previous lender – Equitable remedy – Held: not entitled to interest at rate of previous lender.

PRACTICE AND PROCEDURE – Interest – Penalty Interest Rates Act 1983 (Vic) s 2 – Supreme Court Act 1986 (Vic) s 58 – Whether ‘good cause to the contrary’ for not awarding interest on the statutory basis – Whether rate of interest should be calculated on a simple or compounding basis – Talacko v Talacko [2009] VSC 579 applied.

CONTRACT – Default Interest Clause – Penalty – Robophone Facilities Ltd v Blank [1996] 1 WLR 1428 applied.

REAL PROPERTY – Claim under s 110 of Transfer of Land Act 1958 (Vic) – Joint tenants – Registration of mortgage – Signature of one mortgagor forged – Whether loss crystallises before severance of joint tenancy.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Selimi	Pasha Legal
For the First Defendant	No appearance
For the Second Defendant	The Second Defendant appeared in person
For the…

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.

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Details

Case: [2015] VSC 187
Decision Date: 15 May 2015

CaseChat Overview and Summary

In Titles Strata Management Pty Ltd v Nirta, the dispute involved the authenticity of signatures on loan documents and the implications of a forged signature in the context of Torrens title land. The case was heard in the Supreme Court of Victoria. The plaintiff, Titles Strata Management, sought to enforce a mortgage over Torrens title land held by the defendants, Nirta, on the basis of a loan agreement allegedly signed by the defendants. However, Titles Strata Management claimed that one of the signatures on the loan agreement was forged, which would render the mortgage void.

The primary legal issues revolved around the standard of proof required to establish forgery in civil proceedings, the credibility of evidence, and the effect of a forged signature on the indefeasibility of title under the Torrens system. The court had to determine whether the signatures were indeed forged and if so, whether this would nullify the mortgage and the lender's rights.

The court applied the Briginshaw standard of proof, requiring the plaintiff to demonstrate that forgery was more probable than not. It also considered the failure of the plaintiff to adduce evidence on certain facts and applied adverse inferences accordingly. The court found that the plaintiff had not met the required standard of proof for forgery. The court further held that even if forgery had been established, fraud would not be imputed to the lender as the broker was not acting as an agent of the lender but as a sub-agent for the borrower. The mortgage did not secure the amount owing under the forged loan agreement and the lender was not entitled to interest at the previous rate. The court also held that a third party payer of an extinguished debt was not entitled to the benefit of all contractual rights of the previous lender.

The final orders of the court were that the mortgage was void due to the forged signature, but the lender was not entitled to interest at the previous rate and the third party payer was not entitled to the benefit of the previous lender's contractual rights.

Orders