Payouts Blow Out In Appeal Decision

Newcastle Herald

Thursday September 29, 2005

By JASON GORDON Port Stephens Reporter

THE cost to insurers of Port Stephens Council's loss in the Court of Appeal this week could reach $750,000, it emerged yesterday.

The Court of Appeal dismissed the council's case on Tuesday against a District Court judgement that found that it had breached its duty of care and had failed to provide adequate information about levels of military aircraft noise to prospective buyers of holiday cabins at a Swan Bay resort in the early 1990s.

In the initial District Court ruling, the judge ordered the council's insurers to pay a total of $216,260 to four cabin owners.

But in a full judgement by the Court of Appeal obtained by The Herald yesterday it emerged that the payout will total at least $407,000.

"With the addition of interest, the damages range, in round figures, from $98,000 to $110,000 (for each of the four claimants)," Justices Beazley, Hunt and Giles said in their judgement.

On top of that figure will come legal costs which were awarded against the council.

Council general manager Peter Gesling said yesterday he had "no idea" of what the costs had amounted to, and the solicitor representing the owners would only confirm that costs "are substantial".

Independent legal sources estimated that costs for the six-year tussle could "be almost as high as the payout itself".

Port Stephens ratepayers would not be required to pay any of the costs directly, with costs and compensation payouts to be met by the council's professional indemnity insurers, Mr Gesling said.

The council remained dumbfounded by the court's decision, but is yet to decide if it will appeal to the High Court.

Tuesday's judgement opens the door for 21 similar claims currently before the District Court.

Among those are claims sought by the development and management companies, and by Lloyd and Michelle Moffat who were lot owners and directors of both companies.

It was those claims which were "of great concern", Cr Geoff Robinson told a meeting of Port Stephens Council on Tuesday night.

© 2005 Newcastle Herald

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