CONTRACTS — sale of land — deposit bond — counter indemnity — whether plaintiff signed deposit bond application and counter indemnity to facilitate purchase of property — plaintiff alleging signatures forged by finance broker — uncontradicted forensic handwriting evidence supporting forgery — whether indemnity a nullity — whether agreement should be declared wholly void — Contracts Review Act 1980 (NSW), s 7
AGENCY — actual authority — ostensible authority — finance broker — whether finance broker authorised to sign or submit deposit bond application and counter indemnity on behalf of proposed purchasers — provision of identification and financial documents — whether finance broker on a frolic of his own — scope of finance broker’s engagement — where plaintiffs authorised broker to do all things necessary to secure property
CONTRACTS — ratification — whether plaintiffs ratified or adopted unauthorised deposit bond application, counter indemnity and deposit bond by subsequently taking steps to obtain finance and complete purchase — whether knowledge of transaction and deposit bond sufficient — whether forged signature capable of ratification — extensive contemporaneous evidence demonstrating plaintiff’s knowledge of financial agreements to facilitate purchase of property
CONSUMER LAW — misleading or deceptive conduct — silence or omission — whether plaintiffs failed to disclose alleged forgery before deposit bond was called upon and paid — whether alleged conduct was in trade or commerce — whether duty to disclose arose
Quick Take
1Where a principal authorises an agent to do 'all things necessary' to secure a property purchase, that authority extends to the agent signing a deposit bond application and counter indemnity on the principal's behalf, and such signing does not constitute forgery even where the agent applied the principal's signatures without their physical participation in the signing process.
2A party who becomes aware that a financial instrument bearing their name was signed fraudulently is obliged to disclose that fact to the third party who issued the instrument before it is called upon; failure to do so while continuing to rely on the instrument gives rise to an estoppel precluding denial of liability under the instrument.
3On the facts, the plaintiffs' narrative that they were unaware of the property purchase until late January 2024 was rejected as inconsistent with extensive contemporaneous text messages, emails, independent witness evidence and the plaintiffs' own conduct in signing engagement documents and seeking finance to complete the purchase.
