Double Island case: Lawyer argues daily kayaker visits show island used for tourism

The verdict on billionaire Benny Wu’s Fortune Island Holding Company’s fight to hold onto Double Island – one of the Far North’s crown jewel tourism assets – has been delivered. Here’s what will happen next.

Jonathan Horton KC, acting for the Department of Resources, outside Cairns court today.

Benny Wu’s Fortune Island Holding Company looks set to forfeit its tourism jewel after the Land Court ruled it would not block any moves by the Minister for Resources to strip the billionaire’s company of its Double Island lease.

At Cairns courthouse on Tuesday afternoon Acting President of the Land Court of Queensland Peta Stilgoe OAM ruled that Fortune Island Holding Company’s $5.68m lease “could be forfeited” and that the Land Court would not intervene in the Minister for Resources Scott Stewart stripping the lease.

Acting President Stilgoe said the role of the Land Court was to see if a factual basis for a forfeiture had been made out and said there was evidence to suggest Fortune Island Holding Company had breached the lease conditions at Double Island near Palm Cove.

The alleged breach related to the lease condition that the island operate for “tourism purposes” – it had previously been an exclusive high end retreat for international celebrities – and that there be public mooring and boardwalk facilities, as well as public toilets and showers.

It’s understood the Minister for Resources Scott Stewart will now move to strip the lease from Fortune Island Holding Company, pending the finalisation of the appeal process.

Millionaire Hong Kong businessman Benny Wu’s Fortune Island Holding Company has owned Double Island Resort, off the coast of Palm Cove in Far North Queensland, since 2012. Picture: Brendan Radke

Fortune Island Holding Company’s barrister Douglas Quayle told the court earlier in the day “tourism purposes” did not mean the same thing as “tourist resort” in arguing the conditions of the $5m lease had not been breached.

“The lease operated on the basis the term ‘tourism resort’ be applied in a very a loose way,” he said.

“The island for a decade has been used, subject to weather, by people from kayaking groups.

“That is for tourism use … the noncompliance of the lease conditions has not been made out.”

Mr Quayle told the court that state land laws set out “tourism purposes” but that the department “entangled this meaning with tourism resort”.

He also argued that prior to the lease being signed in 2012, the island had been “predominantly for private use” and was only letted out at “$30,000 per night”.

Acting President Stilgoe said the state land law was clear in that tourism purposes meant use of a “major tourist facility or major resort development”.

“This would mean the provision of overnight accommodation, facilities such as food and beverages, and other activities available to people going on holiday – Double Island has none of these things,” Ms Stilgoe said.

Acting President Stilgoe described the island as “dilapidated and uncared for”.

Acting President Stilgoe described the island as “dilapidated and uncared for … without even toilet facilities”.

It follows an affidavit filed by the state government in court detailing an audit, which said the current state of the island created too much of an unacceptable risk to permit public use and visitors should not be permitted or encouraged to access and use the island.

The pier and moorings were rotted, the diesel tank was unsafe, buildings would require a full redesign, plunge pools were unfenced, and there was a risk of electrocution, the audit found.

Under state law, the minister’s office was required to apply to the Land Court before the minister could exercise their discretion as to whether or not it will they will strip the lessee of the lease.

Minister for Resources Scott Stewart said in a statement he welcomed the Land Court’s decision.

“It was this government that decided to take this action,” Mr Stewart said.

“I know the community and the local members want to see Double Island open and available to use, as do I, which is why we took this action.

“We have always maintained lessees on government property are required to meet the conditions on their leases.

“We will always work with lessees wherever they are in Queensland to make sure they are complying with conditions but we will take action as this shows.”

The government was represented by Jonathon Horton KC and instructed by top tier law firm Clayton Utz.

Mr Wu’s Fortune Island Holdings Company paid $5.68m to former owner Sean Howard 12 years ago for the lease of the island.

The lease expires November 26, 2099.

Mr Wu was not personally party to the claim against his company.

Originally published as Double Island case: Lawyer argues daily kayaker visits show island used for tourism