A Supreme Court judge has set aside the sale of City of Greater Bendigo councillor Julie Hoskin’s Kennington home.
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Justice Michelle Quigley’s orders come after she ruled the sheriff sold the property for an unfair price at auction to cover a debt of almost $387,000.
The property’s buyer, Mouhammad Merhabi, will effectively be refunded the $387,000 he invested on November 23.
The court ordered that lending company Ask Funding pay the sheriff’s office about $39,131.72 for Mr Merhabi’s deposit.
The sheriff’s office was then to pay Mr Merhabi the full $387,000 he invested in the property, which sold for just $180 more than the debt Cr Hoskin owed Ask Funding in relation to a family law matter.
Cr Hoskin will be spared the bulk of the costs of the court proceedings, with the sheriff’s office ordered to shoulder most of the burden.
Ask Funding will also pay some of Cr Hoskin’s costs in relation to injunction proceedings.
All six parties to the case were largely in agreement about the resolutions sought from Justice Quigley, with costs and a proposed stay period the only two points of contention.
The orders confirmed by the Supreme Court on Monday were largely consistent with those suggested to Justice Quigley by the parties at the bar table on Friday.
Justice Quigley last week ruled the process by which the sheriff assessed Cr Hoskin’s equity was flawed and led to a sale significantly undervalue, “which in all the circumstances was unfair”.
She found the sheriff and the authorised officer, Kelvin Griffin, breached their duty to act reasonably in the interests of both the creditor and debtor to obtain a fair price for the Kennington property.
Justice Quigley ruled that a “reasonable person” in the sheriff’s position should have revisited the assessed market value of the property before auctioning it.
She found that the sheriff also should have stepped in to stop the November 23 auction.
The legal proceedings in relation to the sale started on December 22.
Cr Hoskin was contacted for comment.