The advertising for Teralba Waters Estate, on Cockle Creek, that featured in a glossy Newcastle magazine looked just the thing.

“Waterfront estate,” the ad read. “17 brand new three bedroom homes. Access to Lake Macquarie.” And all this starting from just $432,500…how could you go wrong?

They went and had a look at the site, called the real estate agent the same day. There were only four left, they picked the one they thought they liked, paid a $1000 holding deposit and signed up on the spot. It was July, 2016. 

All 17 house and land packages were sold in just four weeks. Why did people come running?

“It was in a price bracket,” Mrs Conroy said. “It attracted people with not a great deal of money. It was a new three-bedroom house that was affordable.”

A year later, Mrs Conroy was speechless. “It’s just destroyed us, we’re second marriage and we put everything we had into this,” she said. “We worked so hard to save for a place…we planned to retire there.”

She was told by a friend last month that he'd seen the Teralba Waters development site relisted for sale on the internet. Not only that, it was advertised as a mortgagee in possession sale.

“No-one told us a thing,” she said. “Then we find out the place is back up for sale.” They want to know what happened to their $50,000 deposit.

Like the majority of buyers, the Conroys signed a contract that stipulated their deposit would be released to the vendor. About $700,000 was paid upfront, the money was to be used for civil works.

Steve David, whose parents worked night shift for years to save the $48,000 deposit they gave him as a wedding present, summed up the feelings of the buyers.

“To put it bluntly, we are furious and we want answers about how this could happen,” he said. “It’s all of my parents’ hard-earned money, that’s what I can't stop thinking about. They worked for years putting that money away from a host of cleaning and other tough jobs. It’s just not right this can happen.”

Mr David, who is getting married next year, planned to move to Teralba to start a new life. Instead, he's been forced to take a job in Orange.

“I’m going to have to put my retirement on hold now,” said Margaret Morgan-King, another unhappy purchaser, who at 63 is the main bread winner in her family.

“It’s not just the $50,000 we put in, we sold our home and have been wasting money on rent. Prices have gone up a lot while we have been waiting for this to progress.

“It’s been a financial disaster for us. For a while it was all happening, but then everything just stopped.”   

Sydney fireman Lloyd Mulder set up a self-managed super fund to invest in Teralba, putting down a deposit of $86,000.

It’s money his young family, that has been living with relatives for four years to save, can’t afford to lose.

“I’m a firie and my wife is a midwife so we’re never going to be making big dollars, we did this to invest in our future,” Mr Mulder said. “This was our retirement savings.”

It all began several years ago when businessman, Colin Wallace, and real estate agent and developer, Jamin Ryan, both prominent members of the Christadelphian Church, bought a three-acre block in William Street, Teralba, for $1 million.

Back at that time the men were good friends. They had high hopes for their $8.7 million plan to develop Teralba Waters Estate.

They formed a company called R & W Design (Teralba) and embarked on an ambitious plan to sell the house and land packages.

Their company signed a loan last year for $1 million with Home Savers Group, trading as Finance Wise, a lender that is run by Mr Wallace’s step-daughter’s partner’s family. 

The artist’s impressions thrust into the hands of potential buyers shows a small, neat subdivision with brand new brick homes. They were all proposed to be built by Mr Wallace’s company, Castle Eco Build.

Mr Ryan's wife Janett Bazouni Ryan, who runs My Home Company, was signed on as the real estate agent.  

By March, according to Mr Wallace, Castle Eco Build, should have completed all 17 three-bedroom homes.

None of this, Mr Wallace reluctantly conceded last month, was now likely to happen.

Almost 18 months after the buyers signed onto the project and most handed over their deposits, the site looks like a ghost town, covered by grass, with large dirt mounds from partially completed earthworks.

Mr Ryan and Mr Wallace, both former bankrupts, disagree on the cause of the development’s demise and how their business relationship exploded at the start of the year: needless to say money is at the heart of the dispute.

The feud became so acrimonious it ended in Mr Ryan taking legal action against his former business partner.

Mr Wallace, who went bankrupt in 1991, alleges the Teralba project couldn't get further finance.

Mr Ryan, who went bankrupt in 2008 and was convicted by ASIC in 2009 for breaches of the Corporations Act involving company collapses, said his control of the development ceased in February when he was “removed” as a director of R & W Design (Teralba) against his wishes.

“As far as I was concerned it was all moving ahead,” he said. “Everything was going fine, it was all smooth.”

He said 80 per cent of the civil works had been completed and there were “finance offers on the table”. The men agree a significant amount of money was spent on earthworks and installing services at the site.

In the 10 months since the business relationship ended, the Teralba Waters saga unfolded dramatically.

The secured first mortgage to Finance Wise went into default and the finance company called on the loan. 

Mr Wallace estimates W & R Design (Teralba) now owes about $1.3 million, partially due to defaults and penalties.

The 65-year-old claims to have mortgaged his house and said at one stage last month he had just $25 in the bank. 

“I’ve put in $800,000 of my own money and I don’t have any more money,” he said. “I’m going to come out of this with nothing. I’m driving a borrowed car, I’m going to end up in a caravan on the pension.”

The issue was complicated further last month when Mr Wallace’s Castle Eco Build was placed in liquidation owing more than $1 million. Legal action to wind up the company was initiated by Mr Ryan’s wife, Mrs Bazouni Ryan, claiming $145,000 owed to My Home Company from unrelated business transactions. 

An expressions of interest campaign to sell the Teralba site, initiated by Finance Wise, ended unsuccessfully last month. 

Real estate agent Joe Di Claudio, of Dowling Mayfield, said there had been “plenty” of interest, but not in the right price range.

Stuart Scoles, a disability support worker from Maitland, who handed over $200,000 to secure a house and land package at Teralba Waters said he has “no idea” what he’d do if he doesn’t get his “life savings” back.

The 58-year-old said he had known Mr Wallace for years because his partner used to work for Castle Eco Build. He’s taken a caveat out on Mr Wallace’s Central Coast home, but doesn’t believe Mr Wallace has done anything wrong.

“It’s really messy,” he said. “If I don’t get my money back it will really hurt me bad.” 

Amid the dispute there is one thing Mr Ryan and Mr Wallace agree on. 

The value of the house and land packages has increased about $80,000 each since the project was first sold. 

That is way beyond the means of the purchasers interviewed by Fairfax Media for this article.

Mr Wallace said he was still hopeful the land would sell for a “decent price” and the buyers would get their money back. 

“I’ve had hate mail addressed to my wife,” he said. “I’ve never done property development before, it’s my first time, and in all honesty it’s failed abysmally. At the end of the day it’s an investment and it hasn’t worked.”

Newcastle Herald