Australia: Enforcing mortgages and loan documents with allegedly forged signatures

Australia and New Zealand Banking Group Limited v Adventure Quest Paintball-Skirmish Pty Limited [2016] NSWSC 188


Australia and New Zealand Banking Group Limited v Adventure Quest Paintball-Skirmish Pty Limited, has reinforced the assumptions a lender is entitled to have when dealing with loan documents that bear allegedly forged signatures.


Adventure Quest Paintball-Skirmish Pty Limited (Adventure Quest) entered into loan agreements with ANZ in 2004 (2004 Loan) and 2009 (2009 Loan). The 2009 Loan subsumed the debt from the 2004 Loan, being approximately $100,000, and advanced a further $50,000. Two further overdraft facilities of $15,000 and $20,000 were also made available to Adventure Quest.

In 1996 Mr Woollard and Mr Hodgson personally guaranteed an overdraft facility that ANZ previously provided to Adventure Quest. The terms of the guarantee included the obligation to pay all the 'guaranteed money', being at any time all the money owing by Adventure Quest to ANZ for any reason. The same guarantee was used as security for the 2004 Loan and 2009 Loan.

Following a default by Adventure Quest, ANZ commenced proceedings for the outstanding sum against Adventure Quest as principal debtor and against Mr Woollard and Mr Hodgson under their guarantees.

Mr Woollard defended the principal proceedings and, by cross-claim against ANZ, sought relief under the Contracts Review Act 1980 (Cth).

2009 Loan

At the commencement of the proceedings Mr Woollard acknowledged that he was liable to ANZ under his guarantee for the sum outstanding under the 2004 Loan.

However, in respect of the 2009 Loan, Mr Woollard argued, amongst other things, that he was not liable because he did not sign the letter of offer, the letter of acceptance or the guarantor acknowledgment for the 2009 Loan. He alleged that the signatures on those documents were not his. He also alleged that any liability that he might have had under the 2004 Loan was discharged when Adventure Quest entered into the 2009 Loan.

Because there was no argument from Mr Woollard as to his liability to ANZ under his guarantee for the sum outstanding under the 2004 Loan, the question for the Court became to what extent Mr Woollard was bound by the 2009 Loan.

ANZ did not dispute that the signatures on the 2009 letter of offer, the acceptance and guarantor acknowledgment were not Mr Woollard's. However, it sought to rely on the statutory assumptions of regularity, being sections 127, 128 & 129 of the Corporations Act 2001 (Cth) (Act), with the result that the alleged forgery is irrelevant and Adventure Quest could not deny its appropriate execution of the acceptance of the 2009 Loan.

In order to rely on the statutory assumptions of regularity, ANZ had to satisfy the Court that there were dealings between itself and Adventure Quest in relation to the 2009 Loan. In this case there was no issue that ANZ dealt with Adventure Quest at least through its communications with Mr Hodgson who, by way of either explicit or implicit agreement with Mr Woollard, was its intermediary with ANZ and acted as its agent.


The Court found in favour of ANZ and held that:

  1. there were dealings between ANZ and Adventure Quest as defined within the meaning of section 128(1) of the Act;
  2. on its face, the acceptance of the letter of offer for the 2009 Loan appeared to comply with section 127(1) of the Act, being that the acceptance was executed by the signatures of Adventure Quest's two directors; and
  3. ANZ was entitled to rely on the provisions of section 129(5) of the Act, being that ANZ could rely on the assumption that the acceptance of the letter of offer had been duly executed as it appeared to have been signed in accordance with section 127(1) of the Act.

As Adventure Quest was unable to assert that any of the assumptions relied upon by ANZ were incorrect, it was held that Adventure Quest had entered into the 2009 Loan and that it was indebted to ANZ despite any allegations of forgeries of Mr Woollard's signature. Accordingly, ANZ was entitled to enforce the guarantees given by Mr Hodgson and Mr Woollard.

Knowledge or suspicion of forgery

ANZ would not have been able to rely on the statutory assumptions of regularity if it had known, or even suspected, that one or more of the signatures on the loan documents had been forged.

In this case, Mr Woollard was not able to point to any evidence which would enable the Court to draw the inference that ANZ, or any of its officers, knew or suspected that Mr Woollard's signature may have been forged.


The decision in Adventure Quest has further cemented the position that a lender is entitled to rely on documents which bear allegedly forged signatures in circumstances where the signatures appear to be compliant with s127(1) of the Act and the lender had no knowledge, or suspicion, of the forgery. Further, it has confirmed that this approach applies equally to corporate and individual guarantors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Kemp Strang has received acknowledgements for the quality of our work in the most recent editions of Chambers & Partners, Best Lawyers and IFLR1000.

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