A Gold Coast couple who found out the house they bought never belonged to them five years after they moved in has been ordered to pay the legal costs of the woman who sued them.
In February, the Queensland Supreme Court ruled Jess and Jackie Morecroft’s Mermaid Beach home still belonged to the previous owner – 83-year-old Hind Issa – and was never transferred into their names, despite being sold and paid for.
The couple spent hundreds of thousands of dollars trying to keep their family home, which they purchased for $1.265 million at a mortgagee auction in 2018.
But it was later found the property still belonged to Ms Issa.
Court documents show that, soon after the settlement in 2018, the couple were unable to transfer the home into their names because the Registrar of Titles had placed a caveat over the property after Ms Issa contacted them saying her home had been "fraudulently mortgaged by criminals".
The court later found that mortgage was fraudulent and accepted Ms Issa's signature had been forged.
She had alleged the house had been unlawfully mortgaged as security for a loan, by a relative who later defaulted.
The court also found the several mortgagees – described in the documents as "lenders of last resort" -- were not entitled to exercise the power of sale over the house.
After a five-year court battle that saw them forced to move from the house, Justice Crowley ruled the Morecrofts were entitled to recover $2.7 million from the Queensland government because they had been deprived of the property due to the mortgage fraud.
On Wednesday, Justice Crowley ordered the Morecrofts pay one-third of Ms Issa's legal costs.
They were also ordered to pay one-third of the state of Queensland's legal costs, according to the court judgement.
The costs were awarded on a standard basis.
Court ruling 'terrifying'
Mr Morecroft said it was not yet clear exactly how much they would have to pay.
"We have no idea what the net figure will be, but it will be big," he said.
"It's terrifying for us because if the government now appeals and they win, with this costs order and any additional appeal costs we'd have to spend, that will be the end of us financially."
Mr Morecroft said the couple was now at their "wits' end" over the ordeal.
"After losing the house, we just want it to be over so we can raise our kids and live a quiet life," he said.
"It was a huge relief to have that compensation order made but there is a road that we always saw that was game over in relation to a costs and possible appeal, and we just feel we're getting closer to that."
Who has to pay?
The mortgagees were ordered to pay the costs of the Morecrofts' third-party claim against them, which involved the couple suing them for a breach of contract.
The state government was also ordered to pay the Morecrofts' costs in relation to their third-party claim for compensation.
There were several other costs orders made relating to other parties to the action.
Ms Issa had sought costs against all defendants except for the state government, the judgement published on Wednesday said.
The Morecrofts had argued they should only pay 10 per cent of Ms Issa's costs because they were "innocent parties that have been caught up in the fraud".
Court documents show Ms Issa argued they should pay more because the Morecrofts had "sought to divest her of her interest in the property".
The Queensland government still has the right to appeal the compensation order to pay the Morecrofts $2.7 million.
