Government appeals $2.7m order for couple's lost home

·2-min read
Russell Freeman/AAP PHOTOS

The Queensland government has appealed a $2.7 million compensation order to a couple who lost their house due to the property being sold to them on a fraudulent basis.

Jess and Jackie Morecroft bought a three-bedroom house in the Gold Coast suburb of Mermaid Beach for $1.265 million via a mortgagee auction in March 2018.

When the Morecrofts went to transfer the property title to their names, they found out the property had a caveat placed on it by 83-year-old Hind Issa, who had bought the home in the early 2000s using the profits from the convenience and takeaway stores she had owned.

Ms Issa had contacted the Registrar of Titles to place a caveat on the property, claiming her Mermaid Beach house had been "fraudulently mortgaged by criminals".

The Morecrofts were completely unaware of any fraud but were never able to take ownership of the property.

Supreme Court Justice Lincoln Crowley ruled in February that the mortgage and title transfer were void after finding "clear and compelling evidence" that Ms Issa's son James Karbotli, or associates, forged Ms Issa's signature to "procure by fraud" a $1 million loan against the house.

Mr Karbotli denied forging Ms Issa's signature and insisted he had her permission to mortgage the house to provide a loan to the family's business.

Former solicitor Stephen Picken had stated he witnessed Ms Issa sign the documents but has now pleaded guilty to a charge of making false declarations and received a suspended jail sentence.

Justice Crowley also awarded the Morecrofts $2,751,666.32 for damages for breach of contract with the Queensland government liable to pay under a section of the Land Titles act that protects persons "deprived of an interest in a lot" in circumstances such as fraud or incorrect titles.

During the case hearings, the Queensland government denied any liability to pay compensation to the Morecrofts, arguing their interest in the house had never existed, had no value and the other parties in the case were responsible for any losses.

On Friday last week, Crown solicitor Greg Cooper filed a notice of appeal seeking to dismiss the order for compensation to the Morecrofts, arguing they were not protected by the Land Titles Act.

Mr Cooper also argued that the Morecrofts caused their own losses as they should have searched the property title before entering into a contract to purchase the house.

The Supreme Court has yet to record the Morecrofts filing a response to the notice of appeal.