Thousands of Queensland flood victims to be compensated after IMF Bentham-funded court action
In its judgment on Friday, 29 November 2019, the court found that the claim for negligence, brought by the class representative, against each of the State of Queensland, Queensland Bulk Water Supply Authority trading as Seqwater and Sunwater Limited, was proven.
The case related to the operation of the Wivenhoe and Somerset dams in January 2011 and the severe flooding in the Brisbane region that caused damage and loss to thousands of people and businesses.
Under the class action regime, the court has determined the issues that are common to all or a sub-set of the group members. The court’s findings therefore provide the basis for the group members to pursue and recover the loss caused to them resulting from the defendants’ negligence.
The judgment necessarily only determines the specific amount of damages due to the representative claimant but the findings on the common issues will enable Maurice Blackburn, as the lawyers acting on behalf of the group members, to take the next steps to pursue recovery of loss on behalf of all group members.
Clive Bowman, IMF Bentham’s Global Chief Investment Officer said: “This was a long and complex case relating to the negligent operation of the Wivenhoe and Somerset dams in Queensland in the lead up to and during floods in January 2011. IMF Bentham is pleased to have been able to play a role in the bringing of this action and hope the matter can now be quickly and finally resolved in the interests of our clients.”
Andrew Saker, IMF Bentham’s Chief Executive Officer and Managing Director said: “We are delighted with this decision on behalf of the thousands of clients whose lives were devasted by the flooding events in and around Brisbane in 2011.”
The case has been funded by IMF Bentham throughout, with the benefit of a 50 per cent co-funding arrangement. Pursuant to that arrangement, IMF Bentham has a right to 57.5 per cent of the funding commission. IMF currently estimates, subject to the outcome of any appeals which may be lodged by one or more defendants, that it is likely to recognise income from this investment (including the reimbursement of IMF’s share of expended costs, which are currently approximately $25 million) in the range of $100 million to $130 million. IMF notes that it is not possible at this stage to provide a more precise estimate of future income due to the need for a detailed damages assessment to be conducted for all group members. The timing of such recognition is uncertain and indeed at this juncture, there is no accounting impact of the judgment, with any income recognition subject to the application of applicable accounting standards.
On Friday, 29 November 2019, IMF Bentham requested a two-day trading halt from the ASX prior to the judgment being handed down to enable the company to review the decision and update the market at the appropriate time. For further details, see IMF Bentham’s ASX announcement on 2 December.
Background to class action
The claim was brought in 2014 as a class action by a representative claimant on behalf of group members. The trial commenced in December 2017 and took over a year to complete.