The administrator of a luxury villa complex in Queensland has been ordered to raise more than $1.3 million as security for its lawsuit against an insurer and builder over allegedly substandard repairs conducted following Cyclone Debbie in 2017. 

Great Barrier Reef Yacht Club Villas is suing Insurance Australia Limited and Paynters seeking rectification or damages over the $20 million repair job at the Hamilton Island site. 

An expert engaged by the villa group has estimated the rectification work it is seeking would cost more than $15 million, according to court documents. 

A trial is unlikely to be heard before the second half of 2026. 

The two defendants applied for a security order after raising concerns the villa group may be unable to pay for their costs if it loses the case. 

The pair said if an adverse costs order is made after trial, the bill for the villa group could top $3 million. 

“Clearly, the trial will be expensive for all parties,” Queensland Supreme Court judge Justice Elizabeth Wilson said in a December ruling on the security matter. She said the villa group’s costs to date were about $1.2 million, IAL’s were $139,750 plus GST to the end of August last year, and Paynters’ were $849,479 plus GST to September 5. 

Great Barrier Reef Yacht Club Villas is a non-profit body that acts similarly to a strata scheme body corporate. It has no assets but promised to secure any legal costs from the 35 villa owners whose interests it represents by imposing a special levy. 

But the defendants argued the body’s powers “for raising and recovering levies [do] not guarantee that funds will be obtained”. 

The court heard that of the 35 villa owners, three had already failed to pay a special levy imposed to cover legal fees, “and have done so without recourse from the plaintiff”. 

Justice Wilson ordered the villa group to pay into the court $437,549 as security for the insurer and $863,898 as security for Paynters. 

See the ruling here.