Which case won? Could a bank enforce a loan agreement where one of the signatures was forged?
Dispute concerning mortgages and loan documents with allegedly forged signatures
A company was established in 1991 and operated a paintball field on a property in Sydney. In 2004 and in 2009 the company entered into loan agreements with a bank. The amounts totalled approximately $100,000, with a further advance of $50,000, and two overdraft facilities of $15,000 and $20,000.
The company had two directors, who had both personally guaranteed an overdraft facility provided by the bank in 1996, and this same guarantee was used as security for both the 2004 and 2009 loans.
Company defaults on loan and bank commences legal proceedings
The bank commenced proceedings against the company as principal debtor, and against the two directors under their personal guarantees, following a default by the company.
One of the directors claimed that although he was liable to the bank under his guarantee for the sum outstanding from the 2004 loan, he was not liable in respect of the 2009 loan – which had subsumed the 2004 loan – as he had not signed the letter of offer, the letter of acceptance or the guarantee acknowledgement for the 2009 loan. He contended that the signatures on those documents were not his.