THE long-running legal dispute between Frankston and Casey councils over responsibility for a Cranbourne methane gas leak has ended with ratepayers the losers.
Frankston Council decided to make a “commercial decision” to settle the legal action taken by Casey Council to recoup some of the $23.5 million the City of Casey and the Environment Protection Authority coughed up in 2011 to homeowners near the former Cranbourne landfill site in Stevensons Rd.
The Stevensons Rd Landfill operated between June 1996 and June 2005 as a municipal tip for Casey and Frankston councils, with EPA approval.
In 2008, about 750 homes in the Brookland Greens Estate in Cranbourne were evacuated after methane gas leaked from the nearby closed landfill site.
Law firm Slater & Gordon launched a successful class action to force Casey Council and the EPA to pay $23.5 million in compensation.
Frankston Council agreed late last month to a $10 million settlement with Casey Council, reduced to $9 million after a $1 million “third party offset” was negotiated.
Frankston mayor Cr Sandra Mayer said council had already paid out $5 million in legal fees and could have faced further costs if council had decided to take the matter to the Supreme Court “where we had no guarantee of success”.
“Failing in the Supreme Court could have meant trebling this amount,” Cr Mayer said.
The $14 million accumulated loss is a blow to Frankston ratepayers but it is understood Casey Council’s legal bill is even higher.
Casey Council was quick to criticise Frankston Council over its legal fees bill when contacted by The Times but then refused to disclose its own outlay on lawyers.
Casey mayor Cr Mick Morland said Casey Council “is disappointed that Frankston sought to avoid its responsibility to share in the clean-up costs at the Stevensons Rd Closed Landfill, and that Casey ratepayers had to fund legal action to recover Frankston’s contribution”.
“It must be even more disappointing for Frankston residents that the City of Frankston spent $5 million in legal fees trying to avoid its obligations, and then settled the case by paying a further $10 million to Casey,” Cr Morland said last Friday.
When questioned by The Times on the extent of Casey’s legal bill, Cr Morland said mediation and negotiation details “are confidential”.
“However, Casey acted in good faith at all times during the mediation, whilst driving a hard bargain on behalf of its ratepayers,” he said.
“Council would have preferred for Frankston to have met its obligations without being forced to do so via litigation.”
The Times understands Casey Council has spent in excess of $25 million in legal fees on Stevensons Rd Landfill matters, more than the $23.5 million compensation figure agreed in 2011.
Casey Council did not respond before publication when the $25 million legal fees amount was put to them.
Frankston Council admitted no liability when making its settlement with Casey.
Cr Mayer said council “shares the dismay” some Frankston residents may feel “at the costs and time involved” but the settlement protects council from any future legal action.
First published in the Frankston Times
