Council acknowledges High Court class action decision

Redland City Council acknowledges the High Court’s recent decision in relation to the class action against Council regarding historic canal and lake maintenance charges.

While disappointed, Council respects the Court’s decision to dismiss Council’s appeal.

The decision means Council will be ordered to repay the approximately $3.79m that was being claimed by the plaintiffs.

Council has not been ordered to repay $10m as inaccurately reported by some media outlets this week.

Following the High Court’s directives, the Queensland Supreme Court will now determine the terms of the settlement.

The monies sought by the plaintiffs in the case, was money that had been raised historically by a special charge on lake and canal properties and which had already been spent by Council to carry out canal and lake maintenance works and repairs to revetment walls bordering their properties.

It was one of Council’s arguments to the High Court that the canal and lakefront class action plaintiffs would effectively benefit twice from this decision.

Council notes the ruling was a split decision (three to two) by the High Court Justices, which indicates there was merit to Council’s argument that also had the support of the Queensland Attorney General.

During the High Court deliberations, Chief Justice Gageler and Justice Jagot concluded that the appeal should be allowed and that “Council acted at all times in good faith, honestly believing that it had complied with the processes required to levy the special charges”.

In 2016, Council reviewed and determined that an error had been made in the administration of the special charge and subsequently it was discontinued in the third quarter of financial year 2016/17. The reserve funds holding this revenue were frozen at that time, and a repayment scheme was instigated for the property owners.

At this time Council formed a community advisory panel with the support of key stakeholders to assist deliberations on the maintenance regime.

Council’s belief is that it has an obligation to properly test legal matters, such as the High Court appeal, through the courts when it has significant impact for the city.

Ongoing maintenance work on private marine infrastructure such as canal revetment walls is now largely funded through a rating category for lake and canal properties that was introduced in June 2018 with the adoption of the 2018/2019 Council Budget.

Council pays for 10 per cent of the cost of works on revetment walls at Raby Bay, which closely reflects the percentage of revetment walls that are owned by Council, bordering public facilities such as parks.

Council will now await further information regarding the High Court’s directives to the Queensland Supreme Court regarding the appeal decision.

How much is claimed?

There is a total of $3,791,536.80 of unrefunded special charges that was collected and spent on the works at three estates (Raby Bay, Aquatic Paradise and Sovereign Waters) during the six years of the claim period from 2011/2012 to 2016/2017.

How many claimants are there?

There are 1055 claimants across the three estates.

How will the claimed amounts be repaid?

A repayment scheme will be decided by the Supreme Court. This will include what percentage of the settlement – estimated to be between 25 and 50 per cent – will be returned to the litigation company that funded the class action.

When is the repayment scheme anticipated to completed?

We anticipate the repayment scheme to be decided over the next few months noting it is subject to the Court assessment of other factors including the repayment amount being reduced to pay the class action funder and submissions on interests and legal costs.

How does the decision effect current property owners in the three estates?

This is a historical claim that may not affect the current property owners in the three estates unless they are part of the claim who paid special charges during the relevant period of 2011/12 to 2016/17. The decision does not affect the current rating or ongoing maintenance work on canal revetment walls that is now largely funded through a rating category for lake and canal properties that was introduced in June 2018.

Is Council insured in these matters?

Council is insured for such events and will be making application for the claim amount as well as legal and administrative costs.