Liability for mortgage where one party to the marriage forges the signature of the other

The New South Wales Supreme Court has handed down a decision in Bay Bon Investments Pty Ltd v Sultana which has decided that where a wife forges the signature of a husband (or vice versa), the liability for mortgage repayments is joint and several.

The proceedings were commenced by Bay Bon Investments in an attempt to receive possession of a property in Nabiac following the Sultanas default in paying their mortgage.

Mr Sultana, the first Defendant, claimed that he did consent to his signature being placed on mortgage documents and that his signature had been forged by his wife, who was joined as the second Defendant. Mr Sultana argued that on this basis, liability for the repayments was not joint and several and that he should not be found liable.

The court found that Mr Sultana was never a party to the mortgage agreement and that Mrs Sultana had an obligation to pay the principal sum.  As such, the Plaintiff was entitled to take possession of the whole of the land.

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