Shareholders in Ardent Leisure Group want the company held to account for its behaviour before and after the 2016 incident. In a class action, they have asked the Federal Court to have Ardent Leisure compensate them for financial losses due to an inflated share price before, and the exacerbated losses since, four Dreamworld customers were killed on a ride that was meant to be safe.

Once a popular tourist attraction, Dreamworld remains closed, ostensibly due to the COVID-19 pandemic, although other Gold Coast theme parks have reopened. Its future remains unclear – Dreamworld may yet reopen – and Ardent Leisure’s share price is currently trading at around forty cents.

This week, three criminal charges were filed against Ardent Leisure, alleging a failure to comply with a health and safety duty that exposed an individual to a risk of death or serious injury. The maximum penalty for each breach is $1.5 million, or $4.5 million in total.

Separately, shareholders are seeking an as-yet unspecified amount of compensation from Ardent Leisure through a civil action that may serve to compound the company’s losses.

Documents filed in the Federal Court show lawyers for shareholders have drawn heavily from evidence given in the Coronial inquest that led to the recommendation Ardent Leisure be considered for criminal prosecution.

The lawyers argue that Ardent Leisure executives failed to ensure Dreamworld responded to previous incidents on the ride and did not fully implement safety measures proposed over a 10-year period. That is despite the company making positive public statements that gave the public, and investors, confidence that any safety issues were well-managed.

In the years leading up to the tragedy, Dreamworld’s safety management systems were audited and found to be substandard, while concerns were raised both internally and externally. Lawyers for the shareholders argue this information should have been released at the time.

“(Ardent Leisure) did not have systems in place which maintained a safe environment for guests at Dreamworld,” state the documents filed on behalf of the shareholders.

Yet, throughout that period, Ardent Leisure and Dreamworld made public statements that safety was assured, something the lawyers argue was misleading and damaging. Reference was also made to a safety committee reporting to the executive, a structure that should have provided adequate oversight.

On October 25, 2016, four Dreamworld patrons were killed when their raft on the Thunder River Rapids ride collided with an empty raft and flipped. Kate Goodchild, her brother Luke Dorsett and his partner Roozbeh “Roozi” Araghi were killed alongside another patron, Cindy Low.

In the hours after the tragedy, Ardent Leisure told the Australian Stock Exchange “park safety is our priority” and that Dreamworld was fully compliant with safety certifications, the ride had completed its annual inspection, and audits had been conducted.

Nonetheless, the share price fell from $2.35 to $2 in just a day, and has not recovered.

Lawyers for the shareholders argue that in the years before the tragedy “there was a material risk or likelihood” that an incident of that nature would occur, potentially causing deaths, decreased patronage of Dreamworld, and financial losses. They argue that Ardent Leisure should have taken action to prevent such a tragedy, or been transparent about the risks: steps that would have reduced the “inflated” share price evident before the incident, and minimised losses to shareholders.

In a separate but related court action, lawyers for the shareholders have sought access to internal Ardent Leisure documents pertaining to a 2018 corporate and financial restructure, as well as any relevant insurance policies.

A case management hearing for the class action has been set down for next week, a day after the criminal charges against Ardent Leisure are due to be mentioned in the Southport Magistrates Court.

Ardent Leisure has again apologised to the families of those killed on the Thunder River Rapids ride, which has been retired, and emphasised the company’s commitment to reform. It hopes to reopen Dreamworld in time for the September school holidays.