Double Island lessee Fortune Island Holdings will go to Land Court in Cairns on Tuesday as the state government seeks to have it stripped of the lease
Documents lodged by the Department of Resources in the Land Court claim progress could have been made on Double Island and wasn’t and monthly reports contained false information in relation to work to restore it.
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Hong Kong-based Benny Wu’s Fortune Island Holdings sought to sell the Double Island lease after the Department of Resources issued its first warning notice about the state of disrepair of the former A-list holiday destination, court documents reveal.
The department is taking Fortune Island Holdings to court to strip it of the lease with the matter set down for hearing on May 7 in Cairns.
Mr Wu is not personally party to the claim.
The department filed a 450-page affidavit in December last year, in which a letter from Lanza Legal dated June 5, 2023, sought on behalf of Fortune Island to sell the lease.
The affidavit also claims monthly reports sent by Fortune Island to the department contained false information, stating that work had progressed when it hadn’t.
Mr Wu, paid $5.68m to former owner Sean Howard 12 years ago for the lease of the island.
The lease expires November 26, 2099.
Conditions included that it operated a tourist resort – it had previously been an exclusive high end retreat for international celebrities – and that there were public mooring and boardwalk facilities and public toilets and showers.
The department listed items for remedial action in March 2022 and demanded monthly progress reports.
“The lessee did not respond specifically to the letter but sent periodic updates regarding the status of remedial actions,” the affidavit stated.
Fortune Island’s reports, contained in the affidavit, did not change much each month, with the company making statements such as “repair work continuing on boardwalk mooring” and “the toilets and showers that are not in working order will be repaired once we have personnel on the island”.
It advised it was waiting on quotes, materials, and council information and stated “supply chain and labour shortage factors are still a matter of concern” and “limited transportation facilities to the island are a major concern”.
It was granted an extension of time in 2022.
The affidavit reveals the Resources Minister sought information on compliance issues in 2021 and Cairns Regional Council had been receiving complaints since 2017.
Fortune Island missed a March, 2023 deadline to have things in order and in May of that year the department advised it intended to seek forfeiture of the lease.
The document reveals Department of Resources officers took police from Smithfield with them on a site inspection last August.
Council advised the department in mid-2023 its ability to inspect the island was hampered due to safety issues.
“Evidence and information obtained during the recent on site inspection confirmed that further progress of the remedial actions could have been achieved and information provided on the monthly updates was observed to be false,” the affidavit stated.
The audit stated the current state of the island created 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, according to the court documents.
The affidavit contained an email from caretaker Jack Wojtas in March 2023, who outlined the mammoth task of clearing vegetation and weeds, and saying the island was infested with cane toads.
He told the Cairns Post at the time work was under way and “everything is brand new” and said in January 2023 he was picking up workers daily and taking them to the island.
The affidavit submitted by Department of Resources principal project officer Simon Leavers, said the lessee had provided details of difficulties progressing remedial action due to staff shortages and material supply chain issues.
“However, observations and information obtained during the site inspection identified that a number of remedial actions could have progressed,” he stated.
“The new generator has arrived and is being stored in Mareeba instead of being installed as required, a barge company has been engaged and awaiting approval to commence removing building waste material and transporting materials and generator to the island.
“The engaged builder, R.A. Building and Services, is ready to commence and awaiting approval from the registered lessee to order materials and commence work,” he stated.
In its defence filed with the court, Fortune Island argued: “Without reliable and regular barge access to the island, improved compliance with the conditions of the lease, is impossible.”
The company denied breaching lease conditions and added if there were breaches then “regularisation of such breaches is imminent”.
Mr Wu was enthusiastically welcomed by civic leaders in 2012 when he bought Double Island and forked out $18m for Acacia Hotel.
He also bought historic Whitfield House for $3.25m in 2013, and paid more than $5m for a trophy home at 21 Knott Court, Whitfield.
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