Question 1

A thirty year old conman calling himself Dean Kors approaches Jenny Wild, a clerk at the local

Helping Hand Bank (HHB) about a loan to purchase a local fitness centre business and for 'other

business purposes.'

He is in the company of a forty year old man who says he is Alex Kors who is introduced to Jenny

as Dean's father. Alex states that he would like to provide security for the loan to help his son.

Jenny asks Alex for identification and she is shown a car drivers licence; a passport and an

employee photo identification card that identify Alex Kors.

Jenny agrees to make a loan of $500,000 to Dean secured by a mortgage on what Alex states is his

registered fee simple interest in a house at Tallai. The mortgage is at the high interest rate of 12%

per annum owing to Dean's lack of credit history, but based on the promise of a lucrative income

stream from the fitness centre. Dean offers a recent valuation that values the Tallai property at

$750,000. The valuation of the Tallai property is fraudulent as the value was changed from

$250,000 (the real value) to $750,000. The mortgage document, which is a traditional mortgage, is

duly signed in the presence of Jenny. The mortgage is registered. No mortgage payments are ever

made.

The identification documents produced by Alex were all forged. Their real names are brothers Ed

and Ron Kelly. To convince HHB of their bona fides, fifty-five thousand dollars ($55,000) of the loan

is used to purchase a run-down fitness centre business (including lease) from the tenant Janet

Fondi. Dean and Alex disappear with the rest of the loan.

The registered owner of the Tallai property is Alex Kors (a woman), who is currently overseas. Ed

Kelly had been house-sitting for the real Alex Kors. HHB is preparing to exercise its power of sale

over the Tallai property to recover the loan monies.

The main value in the fitness centre lease is 2 'Multi Station' fitness machines (bolted into the floor);

a large free standing glass brick reception counter and 3 stationary bikes affixed to the floor. These

items have a total estimated value of $20,000. The landlord Priscilla states that all these items of

equipment are now hers as the lease has been terminated because of non-payment of rent. The

lease does not deal with the issue of ownership of the equipment.

Advise the real Alex Kors and Priscilla about their legal positions. Refer to all relevant

statutory provisions, common law principles and case law.