Nine Entertainment faces a multimillion-dollar payout over Palm Island spending story

The Nine Network faces an enormous financial payout after broadcasting stories falsely accusing Palm Island residents of blowing a $30m payment on things such as cars and boats.

Nine is facing a multimillion-dollar payout to hundreds of Palm Island residents following a television report that falsely claimed the locals blew $30m in compensation awarded to them on items including boats and luxury cars.

Documents lodged in the Federal Court last month state the class action by 437 Palm Island residents over the news reports would result in a settlement amount of up to $5200 for each person – or $2.27m in total.

The legal action is in relation to the original $30m compensation payout awarded to the residents after it was found illegal police conduct took place on the island in 2004.

In addition to the damages bill Nine faces, a commission rate of 28 per cent will also apply on top of the gross settlement sum – taking the total payout to about $2.9m.

It is not yet clear if the final agreed settlement sum will be kept confidential.

In 2020, Nine News aired a “major investigation” that accused Palm Island residents of blowing their $30m compensation payout on goods including “brand new boats, luxury cars” and “spending millions in just a couple of matter of weeks”.

Journalist Alex Heinke said in the promo: “Why was money awarded to so many who were in prison at the time, or dead?”

The class action led by Andrea Kyle-Sailor, who is representing the Aboriginal and Torres Strait Island people, outlined the $30m compensation payout approved by the Federal Court in 2018.

Ms Kyle-Sailor is a deputy mayor at the Palm Island Aboriginal Shire Council and her late mother Erykah Kyle was mayor at the time of the riots in 2004.

She took action against Heinke, Nine Entertainment and Nine Digital who were involved in the TV broadcast, with the action covering a promotional video on May 17, 2021 and the full story that aired the next day on the station, as well as an article that was published on 9news.com.au under Heinke’s byline.

In the class action the applicants argued the publications contravened section 18C of the Racial Discrimination Act and they sought damages, a correction and apology from Nine Entertainment.

Principal of Levitt Robinson Solicitors Stewart Levitt, who is representing the claimants, said he was optimistic the settlement scheme would be given the green light.

“I expect that the overall settlement scheme will be approved, however there might be some variations in respect to such matters as confidentiality and costs,” he told The Australian.

“I don’t think there’s anything particularly controversial about the settlement that would likely lead to it not being approved,” Mr Levitt said.

Court documents lodged on the matter also referenced the 2004 passing of Mulrunji Doomadgee who died while in custody at Palm Island police station.

An autopsy determined his death was due to internal injuries. It also said that in 2004 “residents of Palm Island, angered by Mr Doomadgee’s death, marched from the Palm Island town square and burnt down the police station, courthouse and an officers’ residence”.

Queensland Police were flown to the island wearing “riot gear, wearing balaclavas and carrying large guns, marched into the community and conducted early morning raids”.

The class action determined police had “used excessive force and were racially motivated in their response,” resulting in the $30m payout to residents.

Nine declined to comment.