Supreme Court hears golf club’s $24m case against Logan City Council sewerage works
A South East Queensland council is defending a $24 million lawsuit brought by a golf club, which claims it suffered a decade of financial turmoil after council dug up the links for sewerage pipes.
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A southside council is defending a multimillion-dollar lawsuit brought by a golf club, which claims the council subjected it to a decade of financial turmoil after digging up the links for sewerage pipes.
Australian Golf Management Corporation, which operates the golf course at Meadowbrook, took Logan City Council to court in 2019, suing for $24 million for trespass, breach of quiet enjoyment and damages for breach of contract.
Lawyers for both the golf corporation and Logan City Council appeared before Supreme Court Judge Tom Sullivan in Brisbane on Monday for the beginning of a 15-day civil trial hearing over the damages claim.
Barrister for AGMC Michael Stewart said the business, and that of a previous subtenant, Cosmo Pty Ltd, were devastated because the council took five years to rip up the links and put down sewer pipes, shutting 10 holes of the course during that time.
The site is owned by the council but under a 90-year lease with the AGMC.
In its claim, AGMC argued that Logan council breached its lease agreement when it went onto the golf course and started digging it up causing damage to the business and loss of membership.
The golf corporation claimed the total losses were estimated at more than $24 million.
Mr Stewart told the court that the sublessee’s business failed because parts of the course were constantly closed and resulted in a drop in membership, leaving Cosmo unable to pay its monthly $15,500 rent.
The court also heard that the golf course lost its accreditation for handicap purposes after the closure of 10 holes from 2014-2015 with income from membership fees also decreasing.
The club house also went into disrepair, Mr Stewart said.
The court was told that AGMC claimed it lost rent and interest of $464,909 before Cosmo went into administration and one of its directors declared bankrupt in November 2016.
Henderson Group helped bail out AGMC with a $6 million loan, which AGMC said has since been used to restore the grounds and for improvements.
Although the council had the powers and right to carry out the works as they were for public benefit, the court was told, it had not signed a contract with AGMC before digging started.
“It’s a breach of the lease and that needs to be looked at in that context,” Mr Stewart said.
“Cosmo allowed the council to do the works because it signed a contract with the council for compensation.
“AGMC should have also been made a party and have the right to compensation but no consent was ever asked for or given.”
Mr Stewart also told the court that the council changed its original pipeline plans which did not encroach on the links to go through the course to save more than $70 million.
Judge Sullivan questioned the golf course’s claims about trespass and cited the council’s right to carry out its duty in the public interest to build sewerage pipes.
Judge Sullivan also asked for evidence to show that the council had issued threatening notices to quit to the golf club operators before and during the excavation works.
The court also heard Judge Sullivan question why AGMC, which had given up possession of the land to a third party, Cosmo, should be entitled to a compensation claim.
Lawyers for Logan City Council said the council did not require consent from AGMC to carry out the works as the sublessee was in possession of the lease.
“We did not need to ask for consent and this does not constitute a breach of contract.”
Logan council is yet to address the court.
Previously, it has been reported that the golf corporation has said it built a state-of-the-art driving range, training school, a minigolf course, opened a wedding and restaurant venue and bought 60 electric golf carts in an effort to boost dwindling membership and turn around its financial woes after the pipeline works and during the court case.
Club members also applied to the Office of Liquor And Gaming Regulation to install the pokie machines at the Meadowbrook site.
Logan City Council took eight months to approve the pokie application, which the club said was granted in August 2022 with conditions.
One of the conditions the council stipulated was that AGMC had to re-sign a new lease with council rendering the 1987 lease outdated.
Logan City Council was asked outside court how much compensation was paid to the previous golf club tenants Carl Evans and Craig Baldwin after Logan City Council dug up the golf course and the links were closed.
The council also did not respond to questions about calls for out-of-court negotiations and claims that councillors had been threatened with disciplinary action if they spoke publicly on the issue.
Other questions about a sewer drilling machine still missing on the golf course land and a 2017 council master plan showing designs for offices and residential buildings on the golf course land were also not answered.
The 15-day trial continues in the Supreme Court on Tuesday morning.
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