Redland City Council is disappointed in the Supreme Court decision this week in favour of a class action against Council regarding canal maintenance charges from 5 to 10 years ago.
Redland City Council CEO Andrew Chesterman said Council will look at all avenues of appeal of the judgement that it argues is unreasonable, with the class-action ratepayers set to benefit twice.
“In 2011 Council’s budget supported the raising of funds from the canal and lakefront estate ratepayers through a special charge that was then spent directly within, and to benefit, the canal estates from which the money was collected.
“This decision followed Council receiving independent legal advice supporting the formation of the charge, with Council acting in good faith in the interests of all ratepayers,” Mr Chesterman said.
“Over years Council has spent many millions on revetment walls and dredging in these canal estates.
“Given we have spent the money in these canals and lake, we strongly defended not refunding these spent funds as it means the rest of the community has to pay for the work that ultimately benefits the residents of these canal estates.
“Council contends that if it were to refund the spent portion of charges, these class-action canal and lakefront ratepayers would benefit twice.
“Council has strongly defended not refunding the spent portion of the funds. Funds were collected from canal and lakefront ratepayers in good faith and spent on maintenance work on those same properties. There was no suggestion the charges were not spent on the works adjacent to those properties.
“Importantly, the Court accepted that Council performed the canal and lake maintenance funded by the charges to ratepayers.”
The Court judgement relates to Council decisions between July 2011 and July 2016 for special charges levied to canal and lakefront ratepayers at Raby Bay, Aquatic Paradise and Sovereign Waters.
Mr Chesterman said the Court found that while Council had a legal right to impose a special charge, a legal technicality led to it finding that Council should refund monies spent on canal works and maintenance.
“Council’s historical error was not including in its special charges overall plan, the estimated cost of carrying out maintenance works or defining an end date for the works,” Mr Chesterman said.
“The Court also accepted that Council had several years ago, on its own undertaking after an internal review, returned to canal and lakefront ratepayers more than $8 million of special charges collected for, but not yet spent on, the canals and lake. This figure included interest.”
Mr Chesterman said these types of class actions come at a cost to all Redland City ratepayers and of course benefit the no-win, no-fee lawyers.
“We don’t think it is right that the rest of the community has to pick up this bill and we are looking at all appeal options,” Mr Chesterman said.
“There is also now the question of equity and fairness for those canal and lakefront ratepayers who formally opted out of the class action, many because they believed it was intrinsically unreasonable.
“The yet-to-be determined refund and legal costs affect all Redland City ratepayers including those in the canals and lake estates, who typically pay higher rates based on higher property values.”
Council understands that more than 1000 canal and lakefront property owners from Raby Bay at Cleveland, Aquatic Paradise at Birkdale and Sovereign Waters at Wellington Point were represented in the action.
Under the class action, ratepayers were required to opt-out to not automatically be included, with up to 652 persons believed to have formally opted out.
As far back as 2018 the Raby Bay Ratepayers Association urged its members to opt-out of the class action.
