What used to be the bustling South Stradbroke Island resort of Couran Cove – which opened in 1998 to much fanfare as a jewel in South East Queensland’s tourism crown – is now an eerie ghost town, abandoned by visitors since a bitter battle left it without water, electricity, gas and sewerage connection for the past two years.

While many fled back to the mainland when essential services were cut to the 330 resort properties in February 2023, about 40 long-term residents chose to remain and live off-grid at the island resort which is just 20 minutes from the Gold Coast.

They’ve watched their idyllic paradise rot over the past two years.

They’ve watched the investment in their homes evaporate.

And they say they’ve been abandoned by all levels of government – including Premier David Crisafulli, whose electorate takes in Couran Cove.

Now the latest court-ordered twist in the complicated, multi-layered body corporate legal battle has landed a brutal blow to many, with residents slugged a “special debt levy” bill of up to $25,000 each and given just 30 days to pay.

ASTRONOMICAL BILLS AND RELENTLESS INFIGHTING

At the heart of the tangled nestof the island’s troubles lies – as is often the case – a dispute that is largely about money.

Years before essential services were cut, the island was already in the grip of bitter infighting as debts owed to its complex web of body corporates mounted.

As the unpaid fees hit $24m and countless legal challenges unfolded, the ruling resort body corporate fell into receivership and two companies directed Sydney businessman Simon Napoli, 51, allegedly disconnected basic services, including power.

The sudden loss of those services sparked an exodus of residents from the island, many selling their dream homes at extreme losses.

Those who remained faced ongoing legal challenges, denying they owed most of the unpaid fees and claiming companies directed by Napoli, the owner of 25 properties on the island, and another long-time owner of 90, Brisbane-born accountant Lachlan McIntosh, were responsible for a majority of the debt – a claim they have both fiercely denied.

A Supreme Court order in October last year dealt a major blow for property owners, allowing receivers to issue a special debt levy bill in an effort to recover the outstanding money.

Residents were hit with demands to pay between $15,000 to $25,000 each in the days before Christmas.

They fear an expected second special levy bill is only weeks away.

For long-term resident Paul Wilson, it is the final straw.

He’s now on strike – refusing to pay any more money including his annual body corporate fee.

“I got a $20,000 bill before Christmas and given a month to pay … on top of our normal levy,” he says, adding the financial stress had caused several residents to suffer catastrophic health issues.

“We pay our rates and body corporate and now they want us to pay for a levy that is not our debt.

“It’s a beautiful place and I love it here which is why I’ve paid $110,000 in body corporate fees over the past nine years … but now I’m not going to pay any more.

“They can chase me, but I’m not paying it.”

Wilson – an Air Force veteran who says he enjoys the peace of effectively “glamping” at the deserted resort – is resolute. He’s not going anywhere.

But for others including eco village resident Tony Watson, the political infighting has become too much. He’d sold up and was hopping on a plane back to Melbourne the next day when we visited.

“It’s bloody terrible,” he says, when asked what life is like at the former island paradise.

“I thought it would be different than what it is, I thought it would be a good fun community to move into but there’s all this in-house fighting.

“It’s too stressful living out here.

“I’ve written to the state government and council but no one (seems to give) a damn, we feel abandoned.”

Ernie Johnson, long-term resident and former chair of one of the subsidiary body corporates, is also refusing to pay the special levy until he’s confident receivers have sought to recoup the money from those he believes were originally responsible for racking up the debt.

He also wants guarantees they won’t come knocking for a second wad of cash.

“Before we consider paying, we need to know what the receivers are doing to collect the old debts and if we do pay, how do we know they’re not going to come and collect again,” he says.

Johnson and his wife Barbara say the endless battle is starting to take its toll but they’re “prepared to hang in there and try and see an outcome”.

“We want to retire on the island … but at the moment it’s not a good place for 75-year-olds without the services,” Johnson says.

INSIDE THE DECAYING PARADISE

There’s a sea of for sale signs plastered across villa after villa at the resort in what’s become a boulevard of broken dreams.

Beside the door of one overwater villa languishing on the market is a sign “Beach house – life is better here” – a sad reminder this used to be a dream holiday home for many.

Golf buggies that once ferried visitors around the island sit covered up and idle, leaf litter covers verandas, fishing rods are stacked against railings and tarpaulins are draped over rusting bikes sitting in racks.

The boardwalks buckle under foot and Red Cross-supplied slabs of water sit at the door of the few residences still occupied.

Crime scene tape still blocks access to the shell of a burnt out apartment which was gutted by fire five months ago. Electrical appliances are stacked on the veranda with a gaping hole in the structure exposing daylight where the roof once was.

Thousands of resort hire bicycles are jammed row-by-row in the old activity centre while the weatherboard buildings show signs of deterioration.

The pool area is barricaded by temporary fencing, hiding the lagoon pool filled with leaves floating in deep green water while a kids’ pool is black under a dangling shade sail. Abandoned furniture languishes in the shallows and palm fronds pile up in the garden beds.

At the entrance to the eco villas, which are nestled among dense bushland, sit large plastic drums marked FIRE – without running water it’s the only weapon residents have to fight any flames.

A sports complex, which was opened to much fanfare by Olympic gold medallists Carl Lewis and Cathy Freeman in 1998, is in disrepair.

Broken metal poles spear a running track covered by leaf litter; the beach volleyball court is overgrown; and the mini-golf course is distinguishable only by a few signs protruding from a carpet of vegetation.

Giant chess pieces lay scattered while expensive gym equipment sits rusting under a coat of dust.

The ripped and muddied panels of an event marquee – which once hosted stunning waterside weddings – are left to dangle in the breeze.

Over at the once thriving restaurant and bar hub, furniture is stacked to one side, while artificial flower bouquets sit on tables in the other half – the only indication it hasn’t hosted anyone for years is what looks like animal droppings covering the floor.

The outdoor tables on the pier remain in place exactly how they were left on the final night of service.

It’s like one day they just shut and never reopened.

And that’s exactly what happened.

When the protracted infighting hit crisis point, water, electricity and gas were cut off to about 100 homes on the island on February 15, 2023. It soon extended to the entire resort.

And it was never restored.

Those who stayed were forced to live totally off-grid – spending upwards of $20,000 fitting out their homes with solar systems, batteries and spear pumps.

‘IT’S THE HUNGER GAMES’

“The thing stinks, your Honour … what’s happened is Couran Cove is being cut up like salami and you’re given one piece of the puzzle and the other piece of the puzzle and that’s it. And the whole thing is rotten.”

These words, spoken before the Supreme Court by long-time resident Tony Duncan, broadly sum up the sentiment of the island’s long-suffering locals.

The cove’s past and present corporate setup is stunningly complex – with a procession of bureaucrats, administrators and courts failing to provide the clarity or enforcement required to restore basic services.

Couran Cove has a multi-layered body corporate setup, with the Couran Cove Island Resort Community Body Corporate (CBC), effectively ruling over five smaller bodies.

The four with disputed debts represent the different precincts of the resort – its Eco lodges, Broadwater villas, Lagoon lodges and Marine apartments.

The fifth is the Resort body corporate, which is not alleged to have any outstanding debt.

Each body is required to collect levies from owners to pass on to the overarching CBC, and each is liable for a set amount of debt, regardless of whether the individual property holders have paid their share.

The system has left those who have paid their levies on the hook along with those who haven’t. Who’s who in that sentence goes to the $24m crux of the issue.

A Supreme Court Judgment in 2023 found the overarching CBC owed $13.8m to two utility companies – an amount that had blown out to $15.9m by the time a receiver was appointed in October 2024.

That receiver, Bill Karageozis, was appointed to the CBC and the four smaller bodies corporate and given sweeping powers to collect debts on their behalf.

A month later he sent multimillion-dollar invoices to management of each of the four bodies, leading to residents being slapped with special levy bills for up to $25,000 just before Christmas.

Heads of the four smaller bodies argue older debts, owed by individual property owners, should have been targeted first, rather than lumping all property owners with a shared debt.

In his receiver’s report, Karageozis said existing debts – owed by a range of companies and residents of the island – would be “uncommercial to pursue” individually.

The report said the four smaller bodies had not consistently pursued debts from residents and had “instead proceeded with debt collection as against only some lot owners”.

It said the body corporate system was “dysfunctional”, adding that if it were a corporation with directors, he would have requested action from ASIC.

Duncan, chair of the Marine body corporate, told the court the situation there was like Hunger Games.

“It’s an eat or be eaten type scenario. And the reason why the body corporates cannot pay their bill – the subsidiary body corporates – is because the same two protagonists do not pay their bills,” he told Justice Paul Freeburn.

The two “protagonists” referred to before the court were Napoli and McIntosh, both of whom have always strongly denied this claim, which they say is inconsistent with the receiver’s report on the issue.

Representing Napoli’s companies in court, Damien O’Brien KC said debts had not been levied against lot owners, saying it would be the receiver’s job to chase them when appointed.

While acknowledging the alleged debts owed by the two businessmen, court-appointed Karageozis blasted the smaller bodies for picking and choosing which debts they pursued.

Karageozis said 129 of the 192 lots in the Marine body corporate, which represents 40 per cent of the lots at Couran Cove, had outstanding levies.

He said the Eco body corporate, which represented another 40 per cent of the lots, had not kept up to date with their payments to the CBC for five years, giving one example where it paid just $20,000 of their $2m levies for a year.

He argued that the body needed “professional external management”.

According to the receiver’s report, at least 70 property owners – apart from McIntosh and Napoli – were behind on their levies, some owing up to $79,000 each.

MONOPOLY BOARD

When it comes to the Couran Cove game board, McIntosh holds the most tokens as director of companies which own more than 90 South Stradbroke properties.

Following the trail of debt, the court-appointed receiver found much of it – almost $20m – was assigned to one of McIntosh’s companies, CCH Developments No 1.

That company, which has been in administration since 2016, is contesting the debt in a protracted Supreme Court case which appears to have stalled.

Other McIntosh companies owe a combined $6.7m between them, according to the receiver’s report.

The accountant’s ties with the island resort go back a decade, when it was purchased by a company he co-directed, which then on-sold it to ASX-listed Eureka Group, of which he was also a director.

Eureka then sold it to ASX-listed Onterran – of which McIntosh was executive director.

Onterran went into administration with debts of more than $63m in 2019.

McIntosh told the receiver his companies and “affiliates” had invested more than $30m in the island, but had allegedly faced “prolonged opposition” from some of the body corporate managers.

According to the report, McIntosh alleged the smaller bodies “conspired to close the resort” by “redirecting funds”.

He said he intended to pursue damages of up to $25m through the resort’s insurance scheme.

The body corporate members have strongly rejected the claims.

Responding to The Courier-Mail’s questions via a lawyer, McIntosh said levies raised by the bodies corporate had been “squandered on lawyers”.

“Instead of paying the Community Body Corporate for essential services like water and power, the Body Corporate squandered millions of dollars of owners’ funds on matters not relating to the Body Corporate and litigation which was wholly unsuccessful,” he said.

“(They) spent every dollar of our sinking funds and millions of dollars of money paid for essential services, leading to the closure of the resort.

“I am aware that well over 100 owners at Couran Cove are considering launching a class action against the Broadwater and Eco Bodies Corporate and individual committee members.”

McIntosh was approached for comment about how much his companies may owe to the bodies corporate and what part those debts might have played in the disconnection of services.

McIntosh is not the only big island player: Napoli, a Sydney businessman with his fingers in property pies across Australia, is director of a company that owns 25 Couran Cove properties. He’s joint shareholder in the company with fellow Sydneysider Graeme Douglas Webb, his co-founder at EDG Capital.

The receiver’s report said Napoli’s company owed the Eco body corporate more than $1m, but that Napoli had contested that amount. That contested debt is also before the court.

Companies directed by Napoli owe another $189,473 to other bodies, the receiver’s report said.

As well as directing companies that hold properties, Napoli is director of the two utility companies which are owed the $20m-plus debts by the ruling body corporate.

It was during his directorship that services to the island were switched off two years ago.

Before services stopped, four companies involved in restaurant venues, water and sewerage operations collapsed owing millions of dollars. Napoli was not a director of any of the companies.

In a report to creditors for one of the companies, South Stradbroke Caretaking Services, liquidator Gavin Morton said he would apply to ASIC for funding to further his investigation.

There is no suggestion that Napoli’s entities or McIntosh’s entities are linked in any way, despite the legal proceedings.

In a statement to The Courier-Mail, Napoli’s lawyers said “none of any of Napoli’s entities are associated in any way whatsoever with Lachlan McIntosh and/or any of his entities”. The lawyer also said that any debts which may be owed by McIntosh or his entities are “in no way linked” to Napoli.

There are also new players on the island, with its key commercial properties – including the 20ha parklands, marina, arrivals building and hotel – selling via share transfer in 2022.

The owner, Sydney-based investment firm Option Group, is directed by co-founder Jason Meares - the brother of James Packer’s ex-wife Jodhi Meares.

Neither Meares, nor Option Group are involved with the legal proceedings.

IT’S A DISASTER: NEW INVESTOR UNLEASHES

For Meares, the South Stradbroke foray has not gone to plan, and he is vocal about why.

“As a fund manager I have a responsibility to my investors and the way this great investment is currently going is a disaster for them,” he says.

“I can’t really see the end of the road at the moment, something has to give.”

Meares, who manages the only subsidiary body corporate not entangled in debt disputes, says the remaining bodies had “starved the Community Body Corporate of the funds it requires to undertake the essential services and caretaking functions at the resort”.

“Why would anyone expect something that they haven’t paid for?” he says.

“(They have) gone to the media to paint themselves as victims but the reality is if the service providers were paid, everything would function as normal.”

Meares says the fund had planned to commercially lease each of the areas of the resort to hospitality businesses and marina managers to “create one of the most popular Gold Coast destinations for boaties, day trippers, hotel guests and residents”.

“The asset is unique and a stunning setting that was previously very popular with over 1000 visitors and guests most weekends,” he says.

“When functioning, it is a remarkable investment that is unique to the Gold Coast, one of the best tourist destinations in the country.”

THE TANGLED WEB OF COURT STOUSHES

After all four bodies corporate declined to pay the special levies issued by the receiver, the CBC lodged a new Supreme Court claim in December, demanding payment of $15.6m, plus costs and interest.

The bodies lodged a counterclaim and notice of intent to defend in January, saying they were not responsible for most of the debts, arguing that the McIntosh and Napoli companies owed historical debts of $28m.

And so it goes on.

The case is just the latest court stoush for the community, whose various entities have been listed in the Supreme Court more than 30 times since 2015 – mostly for debt claims.

One case has drawn in 104 people, 29 companies and five years of court time and involves the largest alleged debt of the entire debacle.

In it, the Eco Body Corporate pursued McIntosh’s CCH Developments for almost $20m in allegedly unpaid levies.

But CCH, which owns seven properties on the island, claims it should not have been charged at all, as its properties are vacant land.

CCH has been in administration since 2016, and subject to a deed of company arrangement.

In his report, receiver Karageozis said the alleged debt was worth far more than the land itself. That matter remains unresolved before the court.

‘HURTING INNOCENT OWNERS’

Napoli says he is “distressed” by the saga but maintained Supreme Court judgments supported his claim that $25m was “legitimately and legally” owed to his companies which provided essential services to the island.

He says services will not be restored until the debts are paid.

“Unfortunately Couran Cove was placed in this dire situation because levies paid by innocent owners were diverted away from the purpose for which they were raised – to pay the bills as required by legislation – over a period of more than five years,” he alleges.

“The resort closed because the Couran Cove Community Body Corporate (CBC) owed the operator companies well in excess of $25m and the operator companies could not afford to continue providing services to the body corporate without getting paid.

“We hope the bodies corporate can stop hurting innocent owners so that the massive debts accumulated can be repaid and the island (and staff) can resume operating and Couran Cove can be restored to its former glory.

“I love Couran Cove and it is very distressing to see such a beautiful place destroyed by the actions of a few committee members and their cohort.”

He refuted residents’ allegations he was responsible for the majority of the debt.

LIFE OFF GRID

Those left on the island now relish the quieter life.

They’ve become used to getting their power from the sun and firing up generators to keep the lights on at night.

They only get the bare amount of groceries needed when they head to the mainland to shop – a feat in itself given ferries to the resort also ceased when operations stopped.

They transport their own fuel and gas over and pay more than $7000 a fortnight for a barge to remove their sewage.

They use rainwater and spear pumps and are accustomed to the total blackness which envelops them at night.

When Watson’s grandson visited, he likened conditions to walking into Jurassic Park.

Real estate agent John Quinn lives off-grid in the Marine section and says island life remains “amazing”.

“There’s no traffic, no people, I’m semi-retired and enjoy it,” he says.

He’s spent $25,000 on an advanced off-grid system, including an alarm system which sends real-time, motion-activated video alerts and warns trespassers they’re on private property via a speaker.

But the residents say they’d love an end to the infighting and lawsuits.

They want essential services restored and resort amenities maintained.

They’d love the pool and restaurant reopened.

And, most importantly, they desperately want help from the government.

“We’ve been pushed aside and forgotten,” says Quinn.

His comments are echoed by Wilson: “Authorities don’t want to hear anything, this is the major problem … we are on our own. We want the government to intervene. We feel abandoned.”

Residents have questions about the process involved for the examination of the debts.

They say only an independent mediator can broker a resolution.

Current Eco lodges body corporate chair Dave Bowden says: “We want an independent mediator and we need to substantiate those debts through independent analysis based on factual data.”

Johnson says the mediator is the “most critical issue”.

“We acknowledge there is a debt but our research suggests it’s $7-9m.”

They also want further tightening of body corporate legislation to allow debts to be collected from specific people rather than the entire cooperative being liable for it.

AN INVESTOR’S PARADISE?

The juxtaposition is brutal.

On the right side of the waterway riding into Couran Cove by boat are $3m waterfront mansions in the South Stradbroke Island Waters estate.

On the left hand side are Couran Cove’s villas and apartments which are selling for as little as $60,000.

The difference? One side has essential services, the other does not.

Many Couran Cove homeowners have copped a massive loss and offloaded their properties.

But as prices tumbled, a new wave of investors have come knocking.

Many buyers are victims of the housing crisis, unable to afford to buy on the mainland.

Others are investors picking up a bargain and hoping one day the infighting would end and prices would rise again.

Astras and Bond Estate Agents director Critton Astras has sold 15 Couran Cove homes in the past three months and has another 20 listings.

He says he’s seen the tide turn in the past two months – from mass exodus to buyers swooping on some of the cheapest waterfront real estate in the world.

His clients range from a young family with four kids snapping up a waterfront villa for $300,000 and a surf-mad young guy buying an Eco cabin, to an investor purchasing five properties and making a 15 per cent rental yield.

“They say to me, we’ll buy this for $300,000, spend $30k-$40k making it off-grid, it’s still way cheaper than the mainland,” Astras says.

“The prices are low because of the uncertainty about the future and ongoing legal cases but once the legal situation is sorted and the resort is open to full capacity, I expect property prices will increase considerably.

“I think we are at the bottom and people are realising that.”

Likewise, Quinn says he’s fielding multiple calls a day from potential investors and has sold 12 properties this year.

“Where else can you buy a two-bedroom home for $80,000,” he says.

With 15 current listings starting at $60,000 for a studio apartment right up to $300,000 for a four-bedroom waterfront villa, Quinn was zipping one interested investor around the island in his fancy golf cart the day we visited.

The only catch is the purchase has to be cash. Banks currently won’t lend for properties on the island.

In its heyday, the lower end of the market would fetch $120k-$150k while the upper end would command more than $500k.

THIRD WORLD CONDITIONS IN PREMIER’S BACKYARD

Premier David Crisafulli was outspoken about residents’ plight while in Opposition but since winning power in October last year, his government has made little impact on resolving the crisis.

In a speech to parliament as Opposition Leader in April 2023, Crisafulli took aim at then Attorney-General Shannon Fentiman for alleged inaction as he read a resident’s letter pleading for help.

“These are not comments from one individual. They are comments from dozens of residents living on Couran Cove, dozens of residents who need help and they need it urgently,” he said.

“I have written repeatedly to the Attorney. I have written repeatedly asking for their cries of help to be heard. They need help, and they need it now.”

At the time, a spokesman for Fentiman said she was “deeply concerned” about the loss of basic services, but that it was “not appropriate for the Attorney-General to intervene in individual disputes or proceedings”.

Crisafulli’s plea said it was up to the parliament to work out “what form that assistance takes”.

“There are people living in conditions that are like a war zone. We are not talking about some impoverished nation. It is on the Gold Coast. It is in my electorate of Broadwater. These residents need help.”

Now as Premier, he has the power to take action but those residents he was so sympathetic towards, have waited 161 days and counting.