Northern Midlands and Clarence City councils have failed in their bids to avoid paying full costs in the ongoing legal battle with Launceston and Hobart airports and the Commonwealth over airport rates.
While the total amount was yet to be determined, the councils claimed the costs had been increased by the airports giving late notice of amended defences.
"That late notice necessarily resulted in the adjournment of the trial in March 2019," the councils claimed.
"And, thereafter, the parties suffered a very significant increased costs burden by reason of the additional evidence and documentation that was required to be included in each supplementary court book."
The councils' attempt to remove the costs of cross-claims, amended defences and other matters was rejected by Justice David O'Callaghan in his judgment handed down on Friday, meaning the council must also pay this increased costs burden.
More on the long-running Northern Midlands v Launceston Airport rates dispute:
- May, 2015: Council demands airport pay rates
- December 2015: Prime Minister's Office to hear rates dispute
- December, 2015: Launceston Airport responds to rates debate
- May, 2016: Airport proposes MOU with Northern Midlands Council
- June, 2016: Xenophon election ads target Launceston Airport
- June, 2016: Rates dispute still unresolved
- February, 2017: Council to meet with infrastructure minister over airport rates
- April, 2017: Rates dispute to go to COAG
- April, 2017: Council says $1.35 million owing in airport rates
- July, 2018: Infrastructure Department considers rates dispute 'settled'
- February, 2019: Airport rates dispute set for Federal Court
- September 2019: Northern Midlands loses airport rates case
- October, 2019: Council to appeal airport rates decision
The councils will need to pay the airports' legal costs for a two-day hearing, five-day hearing, cross-claims and other associated legal fees in the Federal Court, which included the use of barristers Shaun McElwaine SC, Naomi Sharp SC and Kristina Stern SC.
Legal teams for the airports are compiling the costs figure, which needs to be approved by the court.
Northern Midlands Council had attempted to recoup $1.7 million in supposedly unpaid rates from the owners of Launceston Airport, but its case was rejected by the Federal Court earlier this month.
The council has appealed this decision to a full court of three judges, likely to be heard in mid-2020.
Launceston Airport general manager Paul Hodgen said the ongoing legal proceedings were creating uncertainty for those looking to invest in the airport.
"With this continually hanging over our heads, it makes it difficult to look ahead to future works at the airport," he said.
The issue dates back to 1998 when Australian airports were privatised and the federal government entered into long-term leases with private operators.
It included a non-legally binding Commonwealth requirement that airport lessees - including Launceston Airport owner Australian Pacific Airports - to pay council rates equivalent to what would have been paid if the airport was not on Commonwealth land.
As a result, Northern Midlands Council claims it is owed $1.79 million in unpaid rates.