By Tony Reynolds and Deborah Morris -
Snapshot
- The recent Supreme Court decision of Mascarello & Anor v Registrar-General of NSW emphasises the importance of identifying clients before witnessing their signatures on loan and associated security documents.
- While cases about a solicitors’ level of responsibility for mortgage fraud turn on their own facts, solicitors will have a better chance of defending claims if they insist on seeing original photographic identification, keep colour copies of identification documents on file and ensure the people before them resemble the photographs in identification documents.
The recent decision of Mascarello& Anor v Registrar-General of New South Wales [2018] NSWSC 284 illustrates the importance of a solicitors’ duty when identifying clients before witnessing their signatures on loan and associated security documents.
The facts
Mr and Mrs Mascarello owned three properties outright. Their son, Dennis, conceived of a plan to raise money fraudulently using his parents’ properties as collateral. He obtained his parents’ original passports and driver’s licences and found two impostors to masquerade as the Mascarellos.
Dennis was assisted in the scheme by a now-banned mortgage broker. Dennis arranged for a company to be registered with Mr and Mrs Mascarello as directors.The company then took out consecutive short-term loans supported by guarantees from Mr and Mrs Mascarello and mortgages over their properties. A solicitor was retained to review the identification documents and witness the imposter’s signatures on the loan documents.
