‘Pay up now’: Redland council to repay millions to wealthy waterfront landowners after losing class action appeal

UPDATED: A southeast Queensland council is considering lodging a costly High Court challenge after it lost an appeal decision which has forced it to repay millions to waterfront ratepayers in a landmark class action.

A southeast Queensland council is considering lodging a costly High Court challenge after it lost an appeal forcing it to repay millions to waterfront ratepayers in a landmark class action.

Redland City Council said it was reviewing last Friday’s Appeal Court decision and may consider a further appeal to the High Court of Australia.

It failed in its bid to overturn a 2021 decision which ordered it to repay waterfront property owners a portion of the rates they paid for a canal and lake levy, which had been “wrongly charged”.

This Appeal Court order will ensure affected ratepayers will receive reimbursement for the special charges paid to the council between July 2011 and July 2017.

It is estimated that $7,782,556.82 was levied over the period from 2011 and $3,791,536.80, plus interest, remains owed to the affected ratepayers.

It was the first class action to be won in the Supreme Court of Queensland and only the second to be heard in the court.

The council now has 28 days to lodge a second appeal in the High Court of Australia after three Court of Appeal judges upheld the original 2021 Supreme Court order for the money to be repaid.

Residents living in ritzy canal estates won a landmark Supreme Court class action last year and Redland City Council has lost an appeal on that decision.

In its defence, the council said it used the rates money to maintain canals and lakes in the exclusive Raby Bay, Aquatic Paradise and Sovereign Waters estates and refunding the full amount would unjustly enrich the ratepayers.

But last year, the Supreme Court found the council had passed resolutions which did not comply with mandatory regulations to levy special charges to fund lake and canal works and ordered the council to return the spent portion of the special charges to the ratepayers.

The council said its “historical error” was due to not including an overall plan outlining maintenance costs and an end date for the works in its special charges between 2011 and 2017.

A letter to canal ratepayers from Redland City Council.

“Having already benefited from the works undertaken with special charge funding, the return of these funds would further benefit the plaintiffs at the expense of other ratepayers,” a council spokesperson said.

“Council is also aware that in a class-action lawsuit, a significant portion of any funds awarded goes to the solicitors and class action funder, with class action plaintiffs usually receiving only a small portion.

“In this case, a significant portion of any funds awarded will go to the solicitors and the overseas class-action funder.

“Council acknowledges that the Raby Bay Ratepayers Association and Aquatic Paradise Residents Association have supported the council and advocated for class action members to opt-out of the claim.”

Canal estate owners first banded together in October 2018 and took the matter to court after the council advised them that a canal maintenance levy was invalid and sent 1650 ratepayers a refund after ceasing the charge in 2017.

Wellington Point ratepayers Simon and Sarah Akero, who have lived on the lake at Sovereign Waters for more than 20 years, said the latest decision was a victory for canal and lakeside ratepayers.

Simon and Sarah Akero at their Wellington Point home.

They joined the class action, which included 1055 members, after they received $104 as a refund, when their canal and lake levy was about $750 a year.

The group engaged Shine Lawyers to recover the remaining amount, which Mr Akero estimated to be more than $12,000 for his property alone.

“It’s now time for Redland City Council to accept the decision of the three judges in their appeal to the Supreme Court,” Mr Akero said.

“The council now needs to repay the outstanding monies to the impacted ratepayers as soon as possible.

“To continue with a second appeal to the High Court of Australia, will incur a costly waste of further ratepayers’ dollars and be seen as a complete disregard for accepting the decision of four judges.

“I am disappointed that Redland City Council continually charged a lake levy without providing any transparency on what the collected funds were used for.

“Transparency and accountability are a crucial element, particularly when it comes to government bodies,” he said.

“This will make councils think about what they’re asking residents for, and will ensure that there is accountability for every dollar asked of us in future.”

Shine’s class actions practice leader Tristan Gaven said it was a big win for the ratepayers.

“This result is further vindication for those who were overcharged thousands of dollars by Redlands City Council,” he said.

“Council itself said this levy was invalid, so to then only refund a fraction of the money collected was an insult to residents.

“We welcome the court’s decision to dismiss the council’s appeal, and congratulate our group members on their determination to see that council was held to account.”

Appeal Court Justice Philip McMurdo upheld the original court decision and said repaying the levy would not unjustly enrich the waterfront ratepayers.

In his decision, Justice McMurdo said the council had failed to stipulate an overall plan for where and when the funds would be spent and the council’s defence should be rejected.

He found Redland council had previously accepted the charges were wrongly levied.

“The repayment of the monies would not result in an unjust enrichment of the payers where the consideration for the payments … was that they were discharging their legal obligation and that consideration failed.”