In a cul de sac in the city's south lies a waterfront mansion the Sydney property boom forgot.
Former brothel madam Jamelie Lahood bought the Yowie Bay home for $3 million five years ago. Despite skyrocketing Sydney property prices since then, Ms Lahood has curiously agreed to sell it for $2.8 million.
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Kings Cross identity v former brothel madam in mystery mansion sale
A curious legal stoush is brewing over a Sydney mansion between King's Cross identity Fadi Ibrahim and former brothel madam Jamelie Lahood.
But not if Fadi Ibrahim has his way.
The Kings Cross identity appeared in the NSW Supreme Court on Tuesday afternoon, his lawyers arguing he has a stake in a markedly undervalued property.
Barrister Craig Wilson said Ms Lahood owed Mr Ibrahim $2.9 million, loans secured in part by a caveat on the Yowie Bay home.
As long as the caveat remains in place, any sale requires permission from Mr Ibrahim, the brother of nightclub boss John Ibrahim, who survived a near-fatal shooting in 2009.
For years, Ms Lahood ran the Stiletto brothel at Camperdown with her former fiance, the prodigious gambler Eddie Hayson. She bought the five-bedroom Yowie Bay home from the Fantastic Furniture chairman Julian Tertini for $3 million in November 2011.
Since then, Sydney property prices have risen nearly 70 per cent, according to Australian Bureau of Statistics figures released in December last year.
McGrath real estate agents announced last month the sale of the Yowie Bay property - a piece of "unrivalled luxury waterfront living" - for an undisclosed sum.
In court on Tuesday, Mr Wilson said Ms Lahood had contracted to sell for $2.8 million when it was in fact worth $3.8 million to $4.2 million.
A law firm and the Australian Taxation Office also have registered caveats on the property, the court heard.
The ATO last year pursued Ms Lahood for $16 million in unpaid income tax. It dropped the case but retained stakes in several of her properties.
Ms Lahood also had a mortgage for the Yowie Bay home of $2.2 million with Westpac bank, which has commenced separate legal proceedings against her.
The bank is still considering whether to repossess the Yowie Bay home, a Westpac lawyer said.
With a potential fight over whom should be paid first looming, Mr Wilson said Mr Ibrahim and the others wanted the mansion to sell for as much as possible.
Justice Michael Slattery agreed to extend Mr Ibrahim's caveat on the property, as long as he paid missing stamp duty on it, before the dispute was resolved.
Mr Ibrahim, wearing a blue suit and blue tie, indicated through his lawyer he would pay the duty.
Ms Lahood did not appear. While the sale has been complicated by court action, she recently received good news about another property.
Ryde City Council has granted her conditional approval to develop a block on Stansell Street in Gladesville into a 6-storey, 23-unit residential building with three storeys of basement parking.
Ms Lahood snapped up the unassuming property next to a service station in 2015 for $2.8 million, a price so far above the reserve the vendors reportedly compared it to a Lotto win.
Since then, a number of parties including the ATO have taken out caveats on the property.
The Yowie Bay matter is set to return to court on Friday.