RABY Bay, Aquatic Paradise and Sovereign Waters residents have won a Supreme Court action against Redland City Council for the return of money paid as a canal maintenance levy.
But council chief executive Andrew Chesterman said the decision was unreasonable and council was looking at an appeal as the class action would see canal owners benefit twice.
Mr Chesterman said these type of class actions came at a cost to all ratepayers and benefitted no-win, no-fee lawyers.
"We don't think it is right that the rest of the community has to pick up this bill and we are looking at all appeal options," Mr Chesterman said.
In 2018 Shine Lawyers started the action after council found in 2017 that - due to a technical glitch - its special charge collected to dredge, maintain and repair canal and lake estates - was not compliant with legislation.
Council refunded a portion of the money collected from 1650 ratepayers.
Court papers showed that ratepayer John Michael Kozik was levied special charges of $10,193.64 for a Birkdale property.
He was refunded $8347.35, including compound interest, but sought the balance from council. It kept that portion because that sum had already been spent on canal work which benefitted ratepayers.
Residents Simon and Sarah Akero said today they were disappointed that council had not operated transparently.
"Ratepayers have taken back a bit of control over the levies imposed by the council," Mr Akero said.
"Transparency is really important when councils are charging the community an unjust fee. This will ... ensure that there is accountability for every dollar asked of us in future."
Shine Lawyers' counsel Tristan Gaven said the decision meant that 1650 canal and lakefront property owners were owed a full refund.
The class action was the first win for any class action in the Queensland Supreme Court and the second class action to be heard in Queensland.
Mr Chesterman said that in 2011 council decided to raise funds from canal and lakefront estate ratepayers through a special charge that benefitted the estates from which the money was collected.
"This decision followed council receiving independent legal advice ... with council acting in good faith...
"Given we have spent the money in these canals and lake, we strongly defended refunding these spent funds as it means the rest of the community has to pay for the work that ultimately benefits the residents of these canal estates."
Mr Chesterman said the court found that while council had a legal right to impose a special charge, a technicality led to it finding that council should refund monies.
"There is also now the question of equity and fairness for those canal and lakefront ratepayers who formally opted out of the class action, many because they believed it was intrinsically unreasonable."
Council understands that more than 1000 property owners were represented in the action. Councils' public liability insurance should cover legal costs.
