Perpetual Trustees Victoria Ltd v English & Anor - [2009] NSWSC 478 - NSWSC 2009 case summary — Zoe

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Perpetual Trustees Victoria Ltd v English & Anor

[2009] NSWSC 478

Supreme Court of NSW|2009-02-12|Before: Simpson J

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Court

Supreme Court of NSW

Decision date

2009-02-12

Before

Simpson J

Source

Original judgment source is linked above.

Judgment (61 paragraphs)

[1]

Background 5 There is no dispute about the background facts, which may therefore be stated briefly. 6 In March 1982 Mr and Ms English married. In 1985 they purchased (as joint tenants) the property at Castle Hill, which became their matrimonial home. The property was purchased with the assistance of a loan from National Mutual Royal Bank, which loan was secured by a mortgage over the property. 7 In late 1990 the couple separated and Ms English removed herself from the property. Mr English remained in possession and occupation. 8 The marriage has never been dissolved, and no property claim under the Family Law Act 1975 has been made. Mr and Ms English remained owners of the property in joint tenancy. 9 In March 2003 Mr English made a loan application to an organisation whose stationery identifies it as "Cornerstone Mortgages". (The documentation discloses a variety of entities involved, but since there is no issue that the appropriate plaintiff is Perpetual, and if any entity other than Mr and Ms English is entitled to possession it is Perpetual, I do not propose to differentiate between those entities.) 10 Mr English sought to borrow $536,000. He offered the Castle Hill property as security. He did not disclose this application to Ms English. He signed the application in his own name, and forged on it the signature of Ms English. 11 In response to the application, Perpetual offered, in writing, to lend the requested sum to Mr and Ms English. The offer is expressed to be made to "Niel William English and Kerrie Diane Therese English". The written offer opens with the following: "The Lender offers You a Loan on the terms and conditions of this Loan Offer and the additional terms and conditions contained in the Interstar Loan Terms and Conditions Booklet (' Terms and Conditions '.)" (bold in original) 12 Towards the end of the offer document (which consists of ten pages) the following appears: "5 … By accepting this Offer You agree that the following new Security is to be provided to the Lender for the Loan:

[2]

[21]

At this point, it is worth flagging, for future reference, the terminology of the definition of "Secured Agreement". The words I have italicised, "which I acknowledge in writing to be an agreement secured by the Mortgage", are important. 25 It is not in dispute that Mr English defaulted on the mortgage obligations, nor that the necessary preliminary steps towards enforcement of its rights under Clause 8.1 were taken by Perpetual. At issue between the active parties (Perpetual and Ms English) is whether, on those undisputed facts, Perpetual is entitled to an order for possession of the entire property. Perpetual contends that it is. Ms English contends to the contrary. Her primary contention is that, on the proper construction of the contractual documents, the mortgage "secures nothing" and Perpetual has no interest in the property. As an alternative, it was suggested on her behalf, an order that would have the effect of transferring the half interest of Mr English to Perpetual, and leave her half interest in her name, ought to be made. (The alternative has the immediate attraction of appearing to achieve a just result; it may or may not properly reflect the consequence of the contractual arrangements between Perpetual and Mr English, and the effect of the registration of the mortgage.) Resolution of the issue depends purely upon the construction of the contractual documents. 26 Underlying, and fundamental to, Perpetual's claim for possession is recognition of the concept of indefeasibility provided for in s 42 of the Act. That that principle applies is not in contest. It was accepted that the registration of the forged mortgage confers upon Perpetual, pursuant to s 42, an indefeasible right to enforce "the estate or interest" in the land conferred by the mortgage (and its associated documents). What is at issue is what that "estate or interest" or title is. 27 It seems to me that this is the position. The principle of indefeasibility is not in doubt, is not difficult to state, and is not difficult to comprehend. It is in its application that difficulties arise. It is, therefore, worth reproducing s 42 of the Real Property Act. It is in the following terms: "42(1) Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except …" (italics added; there follows a list of exceptions that need not be here recorded) (2) In subsection (1), a reference to an estate or interest in land recorded in a folio of the Register includes a reference to an estate or interest recorded in a registered mortgage, charge or lease that may be directly or indirectly identified from a distinctive reference in that folio." 28 It seems that subs (2) is necessary because s 57(1) provides that a mortgage has effect as a security, but does not operate as a transfer of the land mortgaged. Absent the provisions of s 42(2), some doubt may have existed as to whether a mortgage of land subject to the Act created an "estate or interest in land". 29 Section 58 confers on a mortgagee a power to sell the mortgaged property in the event of default in the obligations of the mortgage, on the proviso that certain steps and procedures prescribed by s 57 have been taken and implemented. 30 To adopt the language commonly used, the effect of s 42 is that, upon registration, the "estate or interest" registered is indefeasible, and this is so no matter how flawed (absent fraud affecting the mortgagee, and absent the existence of any of the exceptions listed in s 42(1)) its acquisition may have been. 31 The crucial issue is not whether registration confers or creates indefeasibility: that is undoubted. The crucial issue is the identification of the "estate or interest" that, upon registration, is made indefeasible. In PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643, Giles J (as his Honour then was) said: "Registration does not validate all the terms and conditions of the instrument which is registered. It validates those which delimit or qualify the estate or interest or are otherwise necessary to assure that estate or interest to the registered proprietor." (p 679) 32 In each case, identification of "the estate or interest" is to be made by reference to and analysis of the contractual documents that bring the "estate or interest" into existence, to the extent that those documents are, or are part of, what is registered. 33 It is that exercise that has given rise to significant difficulty, perhaps because, if and when applied strictly, the principle of indefeasibility can produce patently unjust results. (That that potential was recognised at the time of passing the Real Property Act emerges plainly from the enactment of Pt 14 thereof, creating a "Torrens Assurance Fund".) 34 Counsel for Perpetual formulated the issue for determination as: " … whether, given the forgery, the Mortgage over Mrs English's interest in the Property secures the obligation of Mr English to repay to [Perpetual] the amount borrowed by him (plus interest etc) under the Loan Agreement." (underlining in original)

[23]

PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643 (Giles J) 37 This was a case in which an elderly woman in dubious health (Mrs Thompson) was induced to sign, in favour of a company of which PT Ltd ("PT") became assignee, a mortgage over a property in her name that was her matrimonial home. The purpose of the mortgage was to secure money advanced by PT's assignor company to a company (Maradona Pty Ltd - "Maradona") of which her husband and son were directors. 38 The mortgage was registered. Mrs Thompson also signed a personal guarantee for the same purpose. On default by Maradona in the repayment of the principle and interest, PT brought proceedings against Maradona and, relying on their guarantees, against Messrs Thompson senior and junior, and against Mrs Thompson. As against Mrs Thompson, PT sought (relevantly) possession of the land the subject of the mortgage. The proceedings against Maradona and the two Thompson men may, for present purposes, be disregarded. 39 For reasons that need not here be explained, Giles J held that Mrs Thompson had made out a defence of non est factum. That being so, her personal guarantee was unenforceable. 40 The question that then arose concerned the effect (if any) of the finding of non est factum on PT's entitlement to enforce the mortgage and take possession of the property. 41 Giles J held that, on the proper construction of the mortgage documents, no monies owed by Mrs Thompson were thereby secured. This was because Mrs Thompson herself did not owe money, either on her guarantee (because of the non est factum defence) or otherwise, and, by reason of the terminology of the definition of "secured moneys" in the mortgage, neither did any other person. Put as briefly as possible, "Moneys Hereby Secured" was defined to mean moneys owing - by the mortgagor, Mrs Thompson (of which, by reason of the successful defence of non est factum, there were none); or moneys owing by any "other indebted person", which, in turn, was defined to mean any person jointly or severally liable with the mortgagor (and by reason of the fact that Mrs Thompson was not liable, there could be no person jointly or severally liable with her). Accordingly, "Moneys Hereby Secured" was an empty phrase, devoid of content. 42 In a passage that has since been widely quoted, Giles J said: "The general position thus indicated is, I think, as follows. That which is attained by registration is, in the words of s 42, an estate or interest in the land. Registration does not validate all the terms and conditions of the instrument which is registered. It validates those which delimit or qualify the estate or interest or are otherwise necessary to assure that estate or interest to the registered proprietor." 43 It was because of the successful defence of non est factum that the claim on the personal guarantee failed. That had, in effect, a chain reaction. By its terminology, the mortgage depended upon there being a personal debt owed by Mrs Thompson. That personal debt was the substratum of the mortgage. Once it fell away, there was no debt owing by Mrs Thompson to PT, and the requirements of the definition of "Moneys Hereby Secured" could not be met. 44 But what is, I think, implicit in the judgment is that, if the mortgage had been effective to identify a debt which it secured, then its registration would have achieved indefeasibility for PT's title, notwithstanding Mrs Thompson's lack of capacity. 45 By way of illustration, had the mortgage secured a debt owing by a third person, independently of Mrs Thompson, then her lack of capacity in signing the mortgage would not have prevented s 42 from operating to secure PT's title. 46 It must be observed that the decision turned very much upon the interpretation of the language in which the definition of "secured monies" was expressed, and, leaving aside the statement of principle I have extracted above, the decision itself provides little guidance to me in the present exercise. Essential to the result, however, was the conclusion that, because Mrs Thompson was not liable under the guarantee she had signed, no debt, owing by her or anybody else, came within the definition of "Moneys Hereby Secured" contained in the mortgage.

[24]

Small v Tomassetti [2001] NSWSC 1112 (Campbell J) 47 This matter came before Campbell J (as his Honour then was) by way of application for continuation of an injunction restraining the plaintiffs in the principal proceedings (mortgagees) from disposing of the proceeds of sale of real estate. This his Honour declined to do. 48 The real estate had been subject to two mortgages, which were registered. Mrs Tomassetti (the second defendant) was one of two joint proprietors. Her husband was the other. Mrs Tomassetti's signature on the mortgages was forged. 49 The mortgages were expressed to be security for debts in specified sums owed by "the mortgagor" to the mortgagees, and at specified interest rates. (The judgment was delivered ex-tempore. I assume that, as is usual, the mortgages identified or defined "the mortgagor" to mean the two co-owners, Mr and Mrs Tomassetti.) 50 It was recognised that the registration of the mortgage conferred indefeasibility on the mortgagees, to the extent of their "estate or interest" in the land. 51 What was put in issue on Mrs Tomassetti's behalf was whether the mortgagees had any such "estate or interest", since there was no debt owing to them by Mrs Tomassetti (see s 56 of the Act. The existence of "a debt" provides the foundation for a mortgage.) If there were no "debt", there was no mortgage or, on the approach taken by Giles J in Maradona, nothing secured by the mortgage. 52 It was in this context that Campbell J posed the question, which has since been repeatedly quoted: "Indefeasibility for what?" 53 Notwithstanding that Mrs Tomassetti was not personally liable for any of the debts secured by the mortgage, Campbell J declined to continue the injunction. This was because registration of the mortgages achieved indefeasibility of the "estate or interest" of the mortgagees in the land to the extent that it secured repayment of the specified sums. 54 It is clear that, so far as Mr Tomassetti was concerned, there was a "debt" secured by the mortgage. However, that does not appear to me to have been the critical factor in the decision. Campbell J, having referred to the terms of the mortgages (which specified the sums owing), said: "In these circumstances, it is, in my view, clear that the estate or interest in the land which is created by the registration is a charge which secures at the least [the specified sums] together with interest which accrues on [them] and is unpaid …" 55 It seems to me that it was the specification of the sums owing that defined and delineated "the estate or interest" in the land secured by the mortgage, and achieved indefeasibility. That result, it seems to me, would have followed even if the signatures of both Mr and Mrs Tomassetti had been forged. And that result is in accordance with the decision of the High Court in Breskvar v Wall [1971] HCA 70; 126 CLR 376. 56 Because the sums secured were specified in the mortgages, it was unnecessary to embark upon an analysis of the terminology of those contractual provisions that delineated the "estate or interest" secured. That is not the present case because the mortgage did not (expressly) incorporate the Loan Agreement documents, and the sum advanced was not specified in the mortgage. Accordingly, Small v Tomassetti does not provide guidance of the kind I am seeking.

[25]

Perpetual Trustees Victoria Ltd v Tsai [2004] NSWSC 745 (Young CJ in Eq) 57 Tsai is another decision that is frequently cited, not always for the same proposition. In a later case (Chandra v Perpetual Trustees Victoria Ltd, see below) Bryson AJ disagreed with two of the propositions stated therein. 58 Tsai was an ex tempore decision of Young CJ in Eq (as his Honour then was), on an appeal from an order for summary judgment for possession of real estate given by a master (as associate judges were then known). The property was subject to a mortgage which was registered, but which had been forged. Registration had the consequence of indefeasibility. Young CJ in Eq adopted the approach taken by Campbell J in Tomassetti and asked "indefeasibility for what?". He considered that the answer to the question will "to a great degree" depend upon the wording of the covenant conferring the "estate or interest". The mortgage was expressed in clause 2.2 to secure payment to the mortgagee of "the Secured Money", the amount of which was, in a schedule to the mortgage, specified. However, what was said in the schedule to be granted was not the loan of money, but a facility to draw down the specified sum. There was no assertion of an actual advance having been completed. 59 Young CJ in Eq set aside the order of the master. It appears to me, on my reading of the ex tempore judgment, that this was because the statement of claim by which the proceedings were commenced omitted to plead that any money had actually been advanced ([10]) and that the evidence that a loan was made, and made to the (purported) mortgagor was deficient ([27]). 60 Those deficiencies do not afflict the present case. 61 At [16] - [17] his Honour referred to and adopted a statement of Powell JA in the Court of Appeal in Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202, to the effect that, notwithstanding indefeasibility, a personal covenant contained in a forged document is not enforceable; Young CJ in Eq considered this to be consistent with what he regarded as "first principles" - that a personal covenant (including a guarantee) is part of the "package of rights" protected by the indefeasibility principle. That is because it "maps out or may map out the extent of the quantum of the interest of the mortgagee in the land" and is therefore closely related to title, requiring it to be considered as limiting the rights conferred. 62 At first sight, those two statements do not appear to sit easily together. However, when Grgic is read closely, any difficulties dissipate. In Grgic a mortgage was forged, and registered. The Court of Appeal held that, notwithstanding the forgery, the indefeasibility conferred by s 42 of the Act applied, and the mortgagee was entitled to enforce it against the entirely innocent owner of the land the subject of the mortgage. None of that is surprising. 63 What, it seems to me, Powell JA was saying, in the short passage referred to, was that the personal covenant contained in the mortgage was not enforceable independently of, or other than by way of, the enforcement provisions of the Act and against the land. In the event of a shortfall, the mortgagee had no recourse against the landowner by way of the personal covenant. When that is recognised, there is nothing inconsistent about saying that a personal covenant in a forged document is unenforceable, and that a personal covenant (even one that is forged) is part of the "package of rights" that, on registration, is indefeasible and therefore enforceable. 64 That statement by Young CJ in Eq about the effect of the personal covenants appears helpful. But, since Bryson AJ later expressly disagreed with it (see Chandra, below), it is difficult to regard it as authoritative.

[31]

Chandra & Anor v Perpetual Trustees Victoria Ltd & Ors [2007] NSWSC 694 (Bryson AJ) 72 This matter came before Bryson AJ by way of an application by husband and wife owners of real estate for a declaration that a mortgage, which named them jointly as "mortgagor" and was forged, on its proper construction, secured no debt. The mortgage was registered. 73 Bryson AJ accepted that the mortgage created an indefeasible title "to the estate or interest in land which it purports to create". There appears to have been no dispute about this. 74 The mortgagee (which, it will be noticed, happened to be Perpetual, the present plaintiff) began the processes necessary to take possession of the property. Mr and Mrs Chandra commenced proceedings, claiming declarations that no money was secured to Perpetual by the mortgage. Bryson AJ made an order in those terms. It appears from the judgment that the Chandras accepted that Perpetual had acquired an indefeasible title to "the estate or interest" in the land secured by the mortgage, even though it was forged. The question was what that "estate or interest" was. 75 Bryson AJ also adopted as his starting point Campbell J's (becoming immortal) question "indefeasibility for what?" His Honour also quoted the almost as frequently cited passage of Giles J from Maradona. Campbell J's question was to be answered by construction of the relevant contractual documents. 76 Bryson AJ discerned a distinction (not always readily identifiable, but a distinction nevertheless) between an obligation charged on the land (which, upon registration, confers the benefit of indefeasibility) and a personal obligation to pay a debt (which, even when the instrument in which it is contained is registered, does not have the benefit of indefeasibility). His Honour observed (at [28]) that Campbell J's question: " … must receive an answer that identifies an estate or interest in land, or some obligation which is part of or secured by an estate or interest in land."

[38]

The answer to that question depended upon what was encompassed in the definition of "Mortgage Debt" in the schedule. 100 It was also common ground that, because of the forgery, the personal covenant was not enforceable: Grgic; Tsai. (On one interpretation of this paragraph, the personal covenant was not enforceable against Mr Yazgi as well as Mrs Yazgi. I do not think this is what her Honour meant.) 101 It was also accepted by the parties that registration gave indefeasible title in respect of the mortgaged interests, notwithstanding the forgery; but that indefeasibility was not in general terms - it was necessary to ascertain the extent of the mortgagee's interest. 102 The positions of the parties are stated at [16] of the judgment. It was Mrs Yazgi's contention that the (admittedly indefeasible) title created by the registered mortgage was limited to Mr Yazgi's interest in the property and did not extend to hers: the mortgagee contended that its indefeasible title extended to the whole of the property. 103 The Court of Appeal set aside the judgment of Harrison AsJ and declared that, in respect of the interest of Mrs Yazgi in the property, the total amount secured by the mortgage was nil; that Mrs Yazgi was entitled to a discharge of the mortgage insofar as it affected her interest in the property, and ordered a discharge accordingly; and made orders to the effect that trustees for sale of the property be appointed, and that half the proceeds of the sale be allocated to Mrs Yazgi, half to the mortgagee. 104 Two things need here be noted: firstly, the case proceeded on the basis of substantial agreement (not present here) as to the entitlements of the parties and the applicable law; and, in the ultimate, its resolution depended upon the construction of the documents. In particular, the Court found that an inconsistency in the definitions of "mortgage debt" existed, and that the Mortgage Debt, as defined in the schedule (which prevailed) contemplated a joint (not a joint and/or several) borrowing under the loan contract. By reason of the forgery, there was no such joint borrowing.

[47]

Surprising it may be, but that appears to me to be the conclusion to which his Honour ultimately came. It appears to me that this is the position. 123 Where a mortgage (including its incorporated documents) expressly states the quantum of the debt, even if the "debt" is created by a forgery, then, upon registration, indefeasibility is conferred. That must be because quantifying the debt marks out or delimits (see Maradona) the "estate or interest" of the mortgagee that is registered. 124 Where the mortgage does not expressly state the quantum of the debt, but adopts it by reference to a separate document (that is not incorporated in the mortgage), that does not confer indefeasibility, because what is contained in the separate document is merely a personal covenant: see Chandra, Printy. 125 Of course, the "debt" (where the documents are forged) is no more a "debt", just because it is contained in the mortgage, than it is when contained only in the loan documents. However, it seems to me, in those circumstances, s 42 creates an irrebuttable fiction that it is a debt. 126 It may seem odd that the fate of an innocent owner, entirely ignorant of a purported loan and mortgage in his/her name, can depend upon the fortuitous circumstance that the mortgagee has or has not included, with sufficient specificity in the mortgage documents, the debt the subject of the mortgage. Yet that appears to be the position. Printy provides a fine illustration. 127 Where, as in the second mortgage in Printy, an amount is specified - even though the owner of the property was wholly unaware of, and did not receive, any loan - registration rules and indefeasibility renders the loan security for that amount. But where, as in the first mortgage in Printy, it is necessary to look to documents other than the mortgage and those expressly incorporated in it - even if they are identified and the sum said to be owing is therein quantified - registration fails to achieve indefeasibility. 128 Odd, perhaps, and even unsatisfactory, but that appears, on the authority of Chandra and Printy, to be the position.

[57]

They therefore argued that, in the definition of "Secured Agreement", "I" ought to be read as importing the singular. 148 Counsel for Perpetual also set out a number of instances in the mortgage (and memorandum) where the word "I" appears. They argued that each makes: "perfectly good commercial sense if read in an ambulatory way". · Conclusion: 149 Perpetual's approach cannot survive the most cursory examination of the language of the contractual documents. The mortgage document itself refers to "the Mortgagor" in the singular, even though two individuals are named. The use of the pronoun "I" to stand for both individuals indicates that, for the purpose of the contractual arrangements, they are to be regarded as a single entity, or a composite. 150 The fallacy in Perpetual's argument can readily be seen in the last proposition put. It was: "Each [of two mortgagors] mortgaged his or her own interest in the land." 151 It is patently clear that this is not so. Ms English certainly did not mortgage her interest in the land. She knew nothing of the loan, and nothing of the mortgage. Registration of a forged mortgage may create a fiction that the purported mortgagor mortgaged the land, but that does not carry over to the construction of the mortgage documents. 152 I also reject the proposition that, in the definition of "Secured Agreement", "I" ought to be read as meaning Mr English only. Firstly, clause 1.2 should not be taken to affect the definitions contained in clause 1.1. Clause 1.2 is directed to the interpretation of words and phrases contained in the mortgage, not otherwise defined. "I" is given a clear and comprehensive definition in clause 1.1, and for good reasons. It is not altered or modified by clause 1.2. Secondly, even if the point otherwise had merit, I am satisfied that the context requires otherwise. My reasons for that conclusion are set out below. 153 It may be true that the various clauses in which the word "I" appears make "perfectly good commercial sense" if read in an ambulatory way; but they also make "perfectly good commercial sense" if read in accordance with the definition. There is nothing in the documents that requires or permits departure from the definition, and much to support adhering to it. 154 And Ms English's construction has the advantage of reasonableness, fairness and justice. If "I" could be construed as meaning any or either of a plurality of mortgagors, then one or more of the original borrowers could further encumber an already mortgaged property without the knowledge or consent of the other or others. For a construction with that consequence to be accepted, the language would need to be very clear. What Ms English's construction does is to allow for further borrowing by any individual mortgagor, and for that borrowing to be secured on the property; but only if all of the individuals constituting "the Mortgagor" acknowledge that the document recording the subsequent borrowing is "a Secured Agreement". 155 I take by way of illustration the following scenario. Five co-owners of property enter into a loan agreement and each acknowledges the loan agreement to be a "Secured Agreement" for which, therefore, the interests of all co-owners become security. Subsequently, one co-owner, unknown to the others, enters into a further loan agreement with the mortgagee. By reason of the definition of "Secured Agreement" ("any present or future agreement between me and us, or any of us …"), that can also become a "secured agreement". If Perpetual's construction were adopted, the individual borrower, without the knowledge or consent of the co-owners, could acknowledge in writing that the second agreement was a "Secured Agreement", thereby encumbering the property to the extent of the second loan, without any knowledge of that on the part of the co-owners. That cannot be what the contract meant. Indeed, I would be surprised if any financial institution would prepare a document that would allow that to happen - if only because no responsible legal adviser would permit a client to sign it. I reject Perpetual's construction. 156 The consequence is that there is no "Secured Agreement", and the mortgage secures nothing, including Mr English's interest in the property. I recognise the unfairness to Perpetual of this result, but the principle of indefeasibility is apt to create unfairness.

[58]

(b) is the Loan Agreement unenforceable against Ms English?: 157 The second point made on behalf of Ms English is not dissimilar to the first, except that it concerns the construction of the Loan Agreement. 158 Clause 10 of the offer document requires acceptance by signature of all [named] borrowers. Since Ms English did not sign the offer, there was, within the meaning of the document, no acceptance, and the Loan Agreement must meet the same fate as the mortgage and memorandum. 159 This point, it seems to me, is directed to the extent (if any) to which the Loan Agreement, as a separate document and independently of its association with the mortgage documents, imposed binding obligations on either Mr or Ms English. Certainly, so far as Ms English is concerned, it does not and cannot do so, and it was not suggested otherwise. 160 But it would be a surprising - and unfair - result if that also were the case in respect of Mr English, merely because, by his own engineering, one of the named offerees had not signed the offer. 161 The offer document incorporates the Terms and Conditions Booklet; together, on acceptance, the two make up the Loan Agreement. In the booklet, "You" is defined as meaning "the person or persons to whom the offer is made …" 162 The offer is addressed to Mr English and Ms English. 163 Although I have concluded that the absence of Ms English's acknowledgement that the Loan Agreement is a Secured Agreement is fatal to Perpetual's reliance on the security of the mortgage, it does not follow that the absence of her signature on the Loan Agreement is fatal to Perpetual's reliance on that document as creating a personal liability in Mr English. Unlike the requirements of the mortgage, in my opinion the requirement that both purported borrowers sign the loan offer is severable. 164 However, the issue can be put to one side as, at best, peripheral. Mr English has not participated in these proceedings. Perpetual's claim against Ms English is for possession of the property. It has abandoned any claim against her based on the Loan Agreement independently of the mortgage. I have already concluded that it cannot enforce the mortgage against either Mr or Ms English's interest in the property. Whether it can enforce the Loan Agreement against Mr English is not a matter for present resolution.

Perpetual Trustees Victoria Ltd v English & Anor

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Judgment (61 paragraphs)

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Cases Cited (12)

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