Malachy and Lorraine Eastwood agreed a deal to buy the run-down cottage in Ardara in 1998 for £10,000 from businesswoman Suzanne Rafferty.
However, despite moving into the home and spending up to €50,000 renovating it, the sale of the home was never formalised.
This week auctioneer Ms Rafferty took the Eastwoods to court claiming the contract was not valid and sought damages.
Ms Rafferty, a mother-of-twins who had lived in Sweden for several years between 1998 and 2007, claimed the Eastwoods never paid rent and excluded her from the property.
However, barrister for the Eastwoods, Peter Nolan, told Letterkenny Civil Circuit Court that his clients had tried their utmost to complete the sale over the years.
He said part of the deal was that Ms Rafferty would also seek a section 49 application for adverse possession of some lands around the cottage. He produced a series of letters from his client’s legal team to Ms Rafferty and her legal team asking for her to complete the sale, including the section 49 application.
It was also agreed in court that the Eastwoods had paid £3,000 for the contents of the house as well as a £1,000 deposit.
Ms Rafferty said she also gave Mrs Eastwood a diamond ring as part of the deal, but this was denied by the defendants.
Mr Nolan said the reality was one borne out of greed on behalf of the now London-based Ms Rafferty.
He claimed that despite agreeing £10,000 for the cottage at Sandfield, Ardara, its value had increased substantially due to the arrival of the Celtic Tiger.
Ms Rafferty claimed there had been “nepotism” used as the estate agent handling the sale of the cottage, Belfast-based Brendan Eastwood, is a cousin of the buyer Malachy Eastwood.
Judge Mary Faherty found in favour of the defendants for the original price of £10,000 minus the deposit and allowed one month for the balance to be paid.
No order was made for costs.