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| Wivenhoe Dam, north-west of Brisbane |
THE Queensland government has been exposed to the threat of a billion-dollar compensation claim from flood victims and insurers after a royal commission-style probe found the Wivenhoe Dam was mismanaged and that a cover-up attempted to conceal the truth.
The Floods Commission of Inquiry's finding that the engineers who operated Australia's largest dam failed to adopt the correct strategy to protect Brisbane from inundation for about 36 hours from Saturday, January 8, last year, has given a major boost to the hopes of thousands of victims.
The final report of the controversial floods inquiry highlights misleading evidence by the flood engineers, three of whom have been referred to Queensland's anti-corruption body, the Crime and Misconduct Commission, for further investigation and possible perjury-related charges.
The report opens the door for litigation, foreshadowed by Maurice Blackburn lawyers yesterday as "the largest class action in Australia's history".
The report concluded that further modelling by experts could quantify to what extent the breach of the manual worsened the flooding for Brisbane and Ipswich.
Supreme Court of Appeal judge Catherine Holmes SC found that "the possibility exists of at least some improvement in the flooding outcome for Brisbane and Ipswich" if the dam had not been mismanaged. This is a departure from earlier findings made by the inquiry's expert witness, hydrologist Mark Babister, that the flood engineers had achieved close to the best possible result in mitigating the flood.
Premier Anna Bligh embraced the report yesterday with a vow to implement more than 170 recommendations "lock, stock and barrel". Ms Bligh was forced to change the timing of both the state and local government elections after The Australian in late January revealed evidence of a breach of the manual and a cover-up, prompting the floods inquiry to hold an urgent round of new hearings, test the evidence and significantly rewrite its report. The cover-up almost succeeded.
Ms Bligh, who faces voters at next Saturday's state election, said the devastating finding on the dam's management in the crucial period before the flooding of Brisbane and Ipswich last January exposed Wivenhoe's owner-operator, the government-run SEQWater, to legal action.
However, she said the finding "does not of itself establish liability".
She promised that "any consideration of any claim will be required by the state to be managed by SEQWater in a way that would be required of a model litigant".
"People will be treated fairly, their claims will be fairly and openly assessed and where appropriate, mediated and settled," she said. "I hope those who suffered so terribly through these events will find some comfort in the knowledge that with this report the lessons that can be learnt will be learnt and Queensland will be a better prepared and safer place in future."
SEQWater has its own commercial insurance and Ms Bligh confirmed the organisation has cover "for liability against these sort of events". She said SEQWater and its insurer would "work through any claims made against them".
Lawyers preparing class actions on behalf of the thousands of property owners hit by the floods said the finding made it "crystal clear" there was negligence, and litigation was likely to be launched with fresh modelling by independent international experts.
The four flood engineers could not be contacted. It is understood they have been strongly advised by their lawyers to remain silent in the wake of the referral of three of them - Rob Ayre, John Tibaldi and Terry Malone - to the CMC for consideration of criminal charges. The fourth engineer, John Ruffini, was not referred.
Liberal National Party leader Campbell Newman backed Ms Bligh's pledge to implement all 177 recommendations of the report, putting the flood response above politics in the countdown to next Saturday's election. He pledged to match the $40 million Ms Bligh promised to local councils for flood mitigation and buybacks of vulnerable properties.
Rod Hodgson, a partner at Maurice Blackburn with more than 1500 flood-affected Queenslanders signed up for action, said the report's findings were striking and as a whole showed the mismanagement "must have made a difference" by worsening the flooding.
"Wivenhoe is Queensland's most dangerous piece of infrastructure and it's the responsibility of the state of Queensland to ensure that infrastructure is run properly," he said.
"If the action proceeds, it is likely to be the largest class action Australia has ever seen."
Mr Hodgson said the firm was commissioning new flood modelling with "greater accuracy and more reliability" than any conducted under the inquiry's terms of reference.
Slater & Gordon is also preparing for a potential class action, but commercial and project litigation general manager James Higgins warned any class action could be "complicated" by the referral of the three engineers to the CMC over their fictitious report of the flood event. "This referral has the potential to prevent any civil proceedings progressing until the conclusion of a potential criminal trial."
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