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Posted on August 1, 2010 | Posted in Collections

On occasion, we see a defence that alleges that the signature of the debtor has been forged, usually by a spouse who is either long gone or bankrupt. A defence of forgery, if it is believed, is a full defence. This was again confirmed in CIT Financial v. Kingsley, a 2007 decision of the Ontario Superior Court of Justice. 


Unfortunately, CIT never met the husband; it accepted the documents with the husband’s signature purportedly on them. The judge decided that the wife forged her husband’s name on the lease documents. The judge did not accept the wife’s evidence that CIT had encouraged the wife to forge her husband’s signature. Regardless, however, the judge held that spouses have independent legal personalities and the actions of one do not bind the other, unless the other agrees. Since there was no evidence that the husband agreed, the judge held that the husband was not liable. The reasons for decision did not mention a handwriting analysis, something that we would have obtained.         

When the husband requested his costs of the action against CIT, the judge refused. The judge stated that it was reasonable for CIT to sue the husband since he was seemingly a party to the lease. Instead, the judge awarded the costs of the action in favour of the husband against the wife. A fitting result. We suspect that collection efforts for these costs would make interesting dinner conversation between the spouses. “What do you mean you’re garnishing my wages.” “Sorry dear. Would you pass the peas please.”


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