Council settles developer's $37 million claim for $500,000

A developer's $37 million claim against Scenic Rim Regional Council has been settled out of court for $500,000. 

Council staunchly defended the claim over bond payments, drainage and associated infrastructure which was lodged by Oaklands Estate developer James Robinson in 2019. 

A spokesperson said Council was pleased to be able to draw a line under the long-running dispute but disappointed that the spurious claims had cost ratepayers' money that could have been much better spent in the community. 

"It is important that the community understands that this baseless claim was initiated by the developer and, had it not been fought, would have seen ratepayers subsidising a residential development in a way that is outside legislation and the expectations of other developments," they said. 

"Council and its legal team always considered the claim was without merit but was forced to defend this given the extreme and unjustified sum involved." 

Following Council's rejection of an offer from the developer to settle the claim, a counter offer of just $500,000 was put forward by Council and accepted by the claimant before the matter went to trial next month in the Queensland Supreme Court. 

"The $37 million claim's lack of substance is evident in that it was settled for $500,000," the Council spokesperson said. 

"Council's offer to settle the matter out of court was by no means an admission of liability but aimed to ensure the matter was finalised for a known figure. 

"Even if successful in court, Council would have been awarded only a percentage of its legal costs.  

"The settlement figure reached reflects this and the community gains from not having exposure to the risks associated with a court hearing." 
 
Since the claim was lodged in December 2019, it was amended five times by the developer requiring amended responses from Council which have added to the cost to the community of defending the legal action. 

While there are no certainties in any legal matter, Council was highly confident of its ability to defend the claim and was ready to call 20 witnesses and technical experts on matters such as planning, hydrology and traffic. 

During the discovery phase of the proceedings, Council provided 50gB of records to its legal representatives, none of which lent any weight to the developer's claim. 

Council's costs in the matter will be offset by its insurers who have covered 25 per cent of its legal costs to date, including the settlement. 

The matter was the subject of a recent Special Meeting of Council in which it was resolved that power be delegated to the Chief Executive Officer to take all steps necessary to resolve Council’s interest in Scenic Rim Developments Pty Ltd v Scenic Rim Regional Council in line with legal advice received and that Council acknowledge that costs associated with the decision may require a future Budget review. 

"Council is pleased to say that the settlement will have minimal effect on its budget and that the matter is now resolved," the spokesperson said. 

"Unfortunately this long-running action has come at a cost to ratepayers, but it was incumbent on Council to defend this matter to avoid an even greater potential cost to the community."