Rivervue Retirement Village residents launch class action

On 14 October 2022, the Maribyrnong River in the north western suburbs of Melbourne burst its banks after heavy rain.

Forty-five villas were inundated with the runoff at Tigcorp's Rivervue Retirement Village in Avondale Heights, 11km northwest of Melbourne's CBD. They were uninhabitable for at least six months.

Rivervue Retirement Village residents have been seeking compensation for more than three years, and lead plaintiff Stan Korkliniewski and his neighbours are now pursuing Melbourne Water for losses and damages. Litigation Lending is funding a class action for damages filed by Mayweathers and William Roberts Lawyers.

Stan paid $585,000 for his 99-year lease in 2018, according to the writ, which alleges the market value of leases in the retirement village has plummeted as a result of the flood.

The class action alleges that the loss and damage suffered by the residents was a result of Melbourne Water’s negligent conduct in producing and using faulty and/or inadequate flood modelling, and its processes for approving lower finished floor levels for the development of Rivervue Retirement Village.

Victorian Ombudsman Marlo Baragwanath released an investigation in November that found the retirement village never should have been built as it was. Poor Melbourne Water modelling in the early 2000s and mistakes in the building plan were responsible for the 2022 flooding at Rivervue, she said.

A parliamentary inquiry also previously acknowledged “mistakes were clearly made” in the flood modelling, and found there was a reliance on mitigation work that was ineffective.

Through the class action residents are seeking compensation:

• for the cost of repairing and replacing property;
• temporary accommodation;
• higher insurance;
• higher village levies;
• loss of value on their leasehold; and
• for distress.

Mayweathers law firm partner Steve Vrtkovsi, who is acting for the claimants, told The Age losses varied between group members, but they were “material and potentially very significant”.

“The claim is focused on seeking accountability and compensation for residents who were impacted by the alleged conduct of Melbourne Water,” he said.

Last year the state Government rejected a recommendation from the parliamentary inquiry to pay for flood-prone homes to be retrofitted or raised. The inquiry stopped short of calling for a Government buyback scheme, arguing it would be too costly.

The ombudsman has since recommended the Government compensate Rivervue residents who sell their leases at a loss. The Government is yet to formally respond to that recommendation.

“Melbourne Water’s rushed and flawed flood modelling used during early site development under-predicted flooding,” Baragwanath’s report, When the Water Rises, reads. “This meant homes were set too low from the start. Mistakes in approved building plans saw some homes built lower still, without a full safety buffer.”

The ombudsman said the state’s decision in 2016 to remove Rivervue from significant flood planning controls also gave a false sense of security.

The class action alleges Melbourne Water ought to have known the retirement village was flood prone but failed to take reasonable precautions and breached its duty of care.

Melbourne Water has since revised its flood modelling and maps, which reflect Tigcorp's Rivervue Retirement Village is flood prone.

Melbourne Water acting managing director Fiona Schutt said the authority had been addressing the ombudsman’s recommendations with state and local Governments.

“I extend my heartfelt sympathy to all residents affected by the Maribyrnong flood event in 2022 and acknowledge its impact on the community,” Schutt said. “We have been regularly engaging with Rivervue residents as part of the Maribyrnong catchment flood mitigation study.

“As the case is now before the courts, it would be inappropriate to comment further at this stage.”