When NAB comes calling

Sprawled over 165 squares and featuring five upstairs bedrooms with marble ensuites, a wine cellar with room for 1008 bottles and a six-car garage, Toorak Road mansion Towart Lodge appears to have it all.

What it lacks, though, is an owner, after its previous owners lost a $10 million injunction against the National Australia Bank in the Supreme Court.

Owners Amanda and Warren Thompson defaulted on their mortgage last year and the bank claimed $8.22 million was owed. Nothing was paid, and by July 18 this year, with interest, the NAB was owed $9.84 million.

In early July, the bank began a case in the Supreme Court to recoup the money after the Thompsons failed to sell the Toorak home.

The Thompsons had no way to repay the money, said Justice James Elliott in his judgment earlier this week, and on July 9, Mrs Thompson successfully sought an injunction preventing the NAB from selling the property.

The couple leased at $8000-a-week the home to packaging billionaire and Carlton Football Club board member Raphael Geminder and his family. His wife, Fiona, is daughter of the late Visy chairman and billionaire Richard Pratt.

The Geminders needed to relocate while they renovated their Kooyong home – also the envy of home-hunters, with the proposed renovations reported to include at least three swimming pools, a separate wing for the four children, a 12-car garage and car wash.

Since the default, the Geminders' rent has been directly sent to the bank. But the Thompsons claimed that the Geminders agreed to buy the home for $8.5 million, with an option for the Thompsons to buy the property back at the end of the two-year lease.

At the same time as those negotiations, Mrs Thompson was discussing with the bank a possible compromise about the money being demanded.

She suggested that once the property was sold, the money be paid as settlement of the NAB's claims. But a lawyer for the Geminders told the court that they no longer wanted to buy the house at all.

Mrs Thompson has since made an application to the court to enforce the "agreement" that they buy the house, with the option to buy the house back. Justice Elliott adjourned that part of the case until the Thompsons had time to consider his judgment.

Justice Elliott said there was a real risk associated with extending the injunction again, particularly in relation to the value of the property.

"Clearly, the property is a prestige property and there is a significant risk of the value of the property decreasing if an injunction were granted until the trial and determination of the proceeding [including any possible appeals]," he said.

In contrast, Justice Elliott said, nothing had been offered by the Thompsons to protect the bank from that risk, and it had a buyer ready and willing to purchase the property.

"I accept that there must be a real risk that, if the sale to the alternate purchaser is not allowed to proceed in the near future, that prospective purchaser may not be either able or willing to acquire the property in the event that [Mrs] Thompson were unsuccessful at trial," he said.

The only prejudice to Mrs Thompson, Justice Elliott said, was the loss of the option to buy the property back at the end of the lease – and there was no evidence to show she would be able to.

The judge allowed the injunction to lapse.

The story When NAB comes calling first appeared on The Sydney Morning Herald.

Smartphone
Tablet - Narrow
Tablet - Wide
Desktop