Lawyers hope to have sum paid before offshore detention centre closes next month in what is Australia’s largest human rights class action settlement

A judge has approved a $70m compensation payout to current and former Manus Island asylum seekers and refugees over their illegal detention in dangerous conditions in what is Australia’s largest human rights class action settlement.

Victorian supreme court justice Cameron Macaulay said on Wednesday he had approved the settlement reached with the Australian government and operators of the Manus Island regional processing centre.

Lawyers hope to be able to get the compensation paid to current and former Manus Island detainees before the offshore immigration detention centre closes at the end of October.

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The Australian government settled the landmark class action in June rather than proceed with a six-month trial. Had the matter gone to trial, the court would have heard evidence from detainees detailing deaths inside the detention centre, allegations of systemic sexual and physical abuse, and allegations of inadequate medical treatment leading to injury and death.

The court heard earlier some asylum seekers and refugees still held on Manus Island believed the $70m figure was too low and did not address their ongoing plight or resolve their situation.

One hundred and sixty-four objections were lodged to the settlement by members of the class action, most of those from men still held on Manus. However, 145 of those objectors have registered to participate in the settlement on approval by the court.

About 70% of the 1,923 members of the class action – who represent the majority of people detained on the island since 2012 – have so far registered to be part of the settlement. Detainees must register their claims by 13 October to receive their share.

No money can be paid until the end of a 28-day appeal period, which begins now that Macaulay has approved the settlement.

Outside court Rory Walsh, principal lawyer at Slater and Gordon which ran the class action, said the judgment gave the lie to the “fiction” that Australia was not in charge of its offshore detention regime. He said Australia should end the uncertainty for those still held on offshore islands.

“What we wanted to establish in the case ... is put an end to the fiction the commonwealth seeks to maintain for political purposes that PNG holds these people, PNG has a duty of care to these people.

“We didn’t sue the PNG government. We sued the commonwealth of Australia and their subcontractors and we said ‘you’ve got a duty of care’. The commonwealth did not want that tested in a court of law. The commonwealth settled this case and paid $70m not to have that fiction tested in court. We think that fiction is now at an end and the commonwealth has a duty to these people and ought to discharge that duty by treating them fairly.”

Walsh also paid tribute to the lead plaintiff, Iranian-born Majid Kamasaee, who is now living in Australia but whose refugee status determination has still not been resolved.

“It takes a hell of a lot to put your hand up, put your case before the world ... He was very able, very intelligent, very engaged. The interests of the group were clearly central to all of his instructions he gave us and, without him, this proceeding simply wouldn’t have been possible.”

Behrouz Boochani, a journalist and Iranian refugee being held on Manus Island who has written extensively about the conditions there, told the Guardian the compensation payout was welcomed but had not resolved the insecurity of those held on the island.

“The people are worried because we don’t know how they will pay this amount. We don’t have the right to have a bank account and the Australian Border Force has ordered PNG immigration to prevent us from opening an account.

“Another thing: the refugees have never been happy with this amount because it can not cover all of the suffering of four years being in prison for no reason. Still we are suffering and still we are in prison but the case did not cover this.”

When news of a settlement emerged in June, the immigration minister, Peter Dutton, said the government’s decision was “prudent” and averted a lengthy and costly trial and dismissed Slater and Gordon as an “ambulance-chasing law firm”.

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The former prime minister Tony Abbott called the decision “a windfall for people who unfairly took advantage of our nation’s generosity”.

“I don’t think this is the sort of case that should have even got to court, let alone resulted in this kind of a settlement,” he added.

He also condemned the judges involved in the case, despite the settlement being negotiated between the government’s and plaintiff’s lawyers. “We’ve got a judiciary that takes the side of the so-called victim rather than the side of common sense.”

Papua New Guinea’s supreme court ruled in April last year the detention centre was “illegal and unconstitutional”.

The 166-page statement of claim in the class action detailed systematic physical and sexual assault of detainees, inadequate medical care leading to deaths, high rates of suicide and self-harm, and regular outbreaks of violence, including the three-day riots of February 2014 in which more than 70 asylum seekers were seriously injured and Reza Barati was murdered by guards.