Court orders billionaire developer can be stripped of Double Island resort lease but leaves final decision to minister

The Double Island resort pool when it was operating and open to the public. (Supplied)

The Queensland Land Court has ruled in favour of stripping Hong Kong based billionaire, Benny Wu, of a derelict tropical island off the coast of Cairns.

The final decision to cancel Mr Wu’s lease for the Double Island resort now lies in the hands of Resources Minister Scott Stewart, whose department brought the action against Fortune Island Holdings.

Acting President of the Land Court of Queensland, Peta Stilgoe, told the court she agreed with the department that Mr Wu had breached the condition of his lease.

“A tourism resort requires the availability of overnight accommodation, facilities such as a food and beverage service and activities that one might expect on a holiday,” Ms Stilgoe said.

“Double Island has none of these things.

“From day one, Mr Wu knew that compliance with these conditions was a requirement.”

Ms Stilgoe rejected the company’s claims it was not in breach of the tourism lease because there were regular kayak tours to the island.

“The kayak tours are not operated by or on behalf of Fortune (Island Holdings),” she said.

Double Island resort was once favoured by Hollywood celebrities, including Keanu Reeves, Brad Pitt and Jennifer Aniston, but is now shuttered and abandoned.

When Mr Wu purchased the 17-hectare island in 2012, he told local media the resort would be for “very rich tourists” at the “top end of the market”, but photographs supplied to the ABC show the island has become an uninhabitable mess.

The neglect of the property, and flouting of lease conditions requiring the resort to be operated for tourism purposes, triggered a crackdown from the Department of Natural Resources, which issued Mr Wu with an ultimatum to bring the island’s facilities up to scratch by March last year.

The matter was heard today in the Land Court in Cairns — the first time the Queensland government has taken such action to strip a lease from an island owner.

Mr Wu’s barrister, Douglas Quayle, told the court his client “remained committed” to complying with the lease conditions.

He said Mr Wu intended to sell the island and had engaged building contractors to carry out work, but a lack of barge access had hindered the process.

“Structures on a place like this island are hard to recondition once they’re out of condition, obtaining labour and machinery access to the island … has proved very difficult,” Mr Quayle said.

“Things like the COVID-19 pandemic and the steps taken in response to it and natural events like cyclones have an exaggerated effect on anything one tries to do on the island.”

Documents tendered to the court show Fortune Island Holdings had argued the resort was still being used for tourism purposes by kayakers taking day trips.

But barrister Jonathan Horton, representing the Department of Resources, told the court, “tourism is not going through the ghost town of a derelict resort”.

“It is not a safe exercise because the island is in a state of disrepair,” Mr Horton said.

He said Mr Wu had been given three years to comply with the department’s directions.

Mr Stewart said he welcomed the decision by the Land Court to green-light the forfeiture of the Double Island lease.

“We have always maintained lessees on government property are required to meet the conditions on their leases,” he said.

“We will always work with lessees wherever they are in Queensland to make sure they are complying with conditions but we will take action as this shows.”

A ‘Lord of the Flies’ existence

The current state of the island is a far cry from the idyllic, untouched playground that was part of Cambell Balderson’s childhood.

In 1978, Mr Balderson’s mother and father, Carolyn and Ashley, along with two other local families, purchased the first lease for the then undeveloped Double Island for around $60,000.

“It was a Lord of the Flies experience for us,” Mr Balderson said, referencing the classic novel about a group of British children who wind up marooned on a desert island.

“We would harvest oysters and fish and walk through the rainforest, explore the hills and see a lot of snakes and all sorts of different animals.”

The family conglomerate, all of whom have construction backgrounds, pooled their money and built the resort in the early 1980s, based on eco-friendly designs they had seen in Hawaii, and barged in construction material from the Cairns mainland.

“As kids, we used to go over on weekends and sometimes if we were cheeky on school days to help and work on the site,” Mr Balderson said.

“My father was a land surveyor and he looked for the best place to build the resort and it was tactfully done with a minimum of clearing, in a time when sustainable development was relatively unheard of.”

He said his mother later negotiated the sale of the resort to Australian businesswoman Janet Holmes a Court in the late 1980s.

The resort then changed hands several times, before being purchased by Mr Wu in 2012.

Mr Balderson said the court action was a “fight worth having”.

“It’s really sad to see the legacy created by our families end up like this,” he said.

“It’s also an opportunity lost for all locals to go over and experience this beautiful island.”

Palm Cove businessman Tony Richards, who has had a long association with the island, said Double Island was once described by a US luxury lifestyle magazine as one of the “world’s top 10 great escapes”.

He said in its heyday, guests including actor Keanu Reeves were flown by helicopter direct from the Cairns airport.

Other islands facing similar fate

Double Island is not the only neglected island on the Great Barrier Reef.

Brampton Island Resort off Mackay was a scenic paradise until it was bought by United Petroleum in 2010 for $5.9 million.

Lindeman Island in the Whitsundays, once famed for being the first Club Med in Australia, has sat in ruins since it was pummelled by Cyclone Yasi in 2011. The Singaporean company Well Start has bought the island and has pledged to restore it.

The 1980s party paradise, Great Keppel (Woppa) Island off the central Queensland coast has been laying in ruin for 15 years, with the Queensland government recently announcing a $30 million master plan including provisions for an eco-resort, new sewage system and conservation areas.

Resorts on South Molle and Hook Island have also been closed for years.

The issue sparked a Queensland parliamentary inquiry examining the economic and regulatory frameworks for the state’s island resorts.

Eighteen recommendations were made to the state government, including cancelling the leases of developers who let the islands fall to rack and ruin.

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