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Staff Reporter
An auction ‘buyer’ whose cheque for the 10 per cent deposit bounced was successfully sued by the home's owners in the NSW Supreme Court.
The Sydney house, based in Collaroy, was initially sold for $2.3 million to Lily Gubbay, beating two other bidders.
But, as The Daily Telegraph reported, Ms Gubbay left a dud cheque for the compulsory 10 per cent deposit.
The owner, who eventually sold the house for $1.95 million, successfully sued Ms Gubbay in what the report said was believed to be the first case of its kind.
On Friday, Justice Bergin ordered the ‘buyer’, Ms Gubbay, to pay the $350,000 difference plus interest, costs of the first auction and the cost of reselling the house.
The total amount payable was estimated at $447,000 compensation plus legal costs of more than $50,000.
After Ms Gubbay's $230,000 cheque bounced, her lawyer Damon Hall told the sellers his client "had no money," Justice Patricia Bergin said.
Seller Pamela Clancy, who put the family house on the market along with her cousin David Burnet, said she would never sell a house by auction again.
"It gives you a nasty feeling," Ms Clancy told the newspaper.
Real Estate Institute of Australia president Pamela Bennett told the Daily Telegraph that she had never heard of this happening in her 35 years in the business but it shouldn't put people off selling at auction as it simply reinforced that the process was legally binding.
"At all auctions you must be able to pay the deposit. It is unconditional," she said.
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