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War on the waterfront ends with $10 million bonus for government

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Compass Marinas refused to pay rent on its Scarborough facility for years, claiming to have been overcharged and accusing the State Government of fraud.

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The saga at Scarborough came to a head earlier this year, when Compass announced plans to close, threatening the future of its customers – including some residents – until the government took over the operation.

In the background, two court cases continued until last week, when Justice Jean Dalton of the Supreme Court ruled it was time for Compass to hand over $9,486,205 in unpaid rent. Costs have yet to be determined.

Justice Dalton did not disagree that Compass was being charged more than other harbour tenants, but said the company knew about the variations almost a decade ago. It also knew that its business plans were unviable as a result.

“Compass wants to argue that the state of affairs by which the legal relations between it and the State were to be decided was that Compass would be charged the same or similar rent to other boat harbour tenants in southeast Queensland,” Dalton found.

“But just as this state of affairs is not precise enough to be a term of a contract, it is not precise enough to allow the Court to make a decision about what the parties’ legal rights should be. What does it mean to say that rent will be similar to other harbour tenants in south east Queensland over the course of a 24-year lease? What expectation could Compass have had as to what the rent would be?”

Justice Dalton did not accept the Compass claim there was fraud and deceit at play, nor that the government was deliberately concealing evidence.

”It does appear that the State discovered less documents than one might expect as to what rent other boat harbour tenants were paying as at September 2009,” Justice Dalton said.

“However, as Compass never made any application about the State’s disclosure, the State never explained the reason for that. Had Compass commenced its claim earlier than it did, it may have found there were more documents available for disclosure. I do not think there is anything in this.”

In September, the government announced $400,000 in funding to develop a master plan for Scarborough Boat Harbour and its facilities, with work to begin by the end of the year. This may include an expansion to allow for barge services between the peninsula and Moreton Island.

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