Australia, June 16 -- New South Wales Land and Environment Court issued text of the following judgement May 16:

1. On 2 July 2015, Nikolce (Nick) and Lena Kolevski (the first and second plaintiffs) exchanged standard form contracts for the sale of two residential properties in New South Wales with Timber Creek Holdings Pty Ltd (Timber Creek, the defendant). Nick and Lena were the vendors. Timber Creek was the purchaser. One of the properties was the Kolevskis' family home in Shell Cove. The other was a home in Port Kembla occupied by Lena's elderly parents. Timber Creek was a company associated with the Kolevskis' friend, Ken Stevens. I will adopt the naming convention used by the parties and refer to Mr Stevens and the members of the Kolevski family by their first names.

2. Settlement occurred on 21 July 2015, whereupon Timber Creek became the registered proprietor of each property.

3. To an outside observer, the distinctive feature of these otherwise unremarkable transactions was that the price paid by Timber Creek for each property was well below market value. As at 21 July 2015, the Shell Cove property had a market value of $1,025,000 but the purchase price was $400,000. The Port Kembla property had a market value of $320,000 but the purchase price was $222,000. The total purchase price for the two properties was almost exactly equal to the amount required to discharge mortgages held by the ANZ Bank over the properties.

4. The Kolevskis have continued to live in the properties since the sale to Timber Creek. During the whole of the time that Timber Creek has owned the properties, the Kolevskis, including their son Cameron (the third plaintiff), have made monthly payments of $3,600 to Timber Creek, as well as some other payments to which I will refer in due course.

5. The plaintiffs say that Nick and Lena, on the one hand, and Ken on behalf of Timber Creek, on the other, reached an oral agreement in May or June 2015 by which Timber Creek agreed to lend Nick and Lena $620,000 at 6.5% interest per annum in order to pay out the ANZ Bank mortgages and that the properties would be conveyed to Timber Creek in order to secure repayment. They say their regular monthly $3,600 payments have always been by way of loan repayment.

6. The plaintiffs' principal case is that the transaction considered as a whole (that is, the oral agreement plus the contracts for sale and the transfers) was akin to a loan and mortgage transaction. They say that they have performed all of their obligations under the arrangement save for repayment and that they are now ready, willing and able to repay what is owing in order to recover title to the properties.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/196d6b40191bdfcce6188e29)

Disclaimer: Curated by HT Syndication.