Sheriff selling $630,000 Braybrook house for $1,000 had duty to obtain fair price, court told

By Larry Schlesinger
Friday, 10 February 2012

The Victorian sheriff had a duty to “obtain a fair and reasonable price,” the Supreme Court was told in the trial surrounding the $1,000 sale of a Braybrook house.

Lawyers for the retailer Zhiping Zhou told the court that Zhou was “vulnerable to the sheriff properly exercising his duty under law.”

“He was exceptionally vulnerable to the price accepted by the sheriff,” barrister Paul Hayes said during the second day of the hearing. The court case continues into the third day on Monday February 13.

The Melbourne man is fighting to reverse the sheriff’s extraordinary $1,000 sale last year of his six-bedroom Braybrook home.

Lawyers for the buyer said their client had no case to answer with regard to acting unconscionably.

Lawyers for Zhou highlighted submissions in the buyer Ronald Kousal’s affidavit that he would search the Government Gazette every Thursday looking for properties coming up for auction. A week before the auction he would contact the sheriff’s office to find out if the auction was going ahead and following a review of the assets, land and any encumbrances set a budget for purchase.

Zhiping Zhou's house was repossessed by the sheriff. It still remains in Zhou’s registered name, according to a title search, although there are warrants of claim registered on title.

There was $465,000 owing on the property.

The Victoria Supreme Court heard the imposing two-storey brick house had an estimated value of $630,000 but was sold at the Swanston Street, Carlton sheriff's room at 2.30 pm December 16, 2010 in a without reserve auction.

Kousal bought the Wirraway Avenue home for $1,000, apparently beating off a $200 bidder. Its been suggested the costs without actually gaining occupancy and title had already surpassed $119,000 in legal fees, stamp duty and costs.

Anthony Strahan, for the sheriff, had argued the Sheriff's Act made the office ''immune'' from being held responsible for the outcome of such an auction, and the buyer must be protected.

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Comments (3) Add Comment

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written by Mike Butler of Paddington Brisbane, February 10, 2012

This is one of the most disgraceful abuses of power I have ever heard of in my 31 years in the property industry. I have acted on behalf of receiver/managers to sell property on many occasions, and most are very fearful of being accused of acting in bad faith. If this travesty of justice is not overturned in the courts, I despair at our legal system!

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written by Josiah Seet, February 12, 2012

The Common law is to protect the common man with common sense. It's a no brainer that its an absurd carriage of law. Hopefully the Court is not as stupid as the Sheriff office by abusing the judiciary power to protect the abusive Sheriff power. We will be the laughing stock for the world and it will give new meaning to "Kangeroo" Court of Australia. I feel sorry for the victim that he had to suffer such injustice and damages because of such idiotic action. The auction could have been put on stay. Perhaps there is corruption involved and it should be investigated.

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written by Ro of Brisbane, February 18, 2012

The buyer takes on the encumbrances, including the existing mortgage, which is noted in the gazette entry. How much is that? It's not the $100k debt that was mentioned, surely that is a separate issue otherwise the Sheriff would not be auctioning the property (the mortgagee would).