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The Federal Court has ruled in favour of a bank after two borrowers challenged its right to seize their house.
Alexander van der Kooij and Jeanne Ada van der Kooij took out a $279,000 mortgage with MyState in 2005 and then a $121,000 loan contract in 2010, according to Justice Richard Tracey.
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The Tasmanian lender took possession of their home in August 2012 after the van der Kooijs defaulted on their loans in December 2010.
MyState then sold the Kingston property at auction for $380,000 in February 2013.
The court case centred on MyState’s decision to offer a 28-day grace period in November 2012. It promised to suspend the auction if its debt was repaid by bank cheque by November 30.
However, the van der Kooijs responding by presenting a promissory note that promised payment by December 2014. The promissory note was twice rejected by MyState.
The van der Kooijs admitted in court that they had defaulted on the loans, but argued that MyState had unlawfully sold their home because MyState should have accepted the promissory note.
This argument was rejected by the court.
Justice Tracey also rejected the van der Kooijs’ claim that MyState had not received “the best price reasonably obtainable” when auctioning their home and its contents.
MyState successfully filed a $108,000 cross-claim against the van der Kooijs in which it asked for the shortfall between the value of the loans and the proceeds of the auctions.
The van der Kooijs were also ordered to pay interest on the cross-claim and MyState’s costs.
