Media Release – Fitzroy Legal Service: Proceedings to be lodged in East West Project
Proceedings will be commenced today in the Supreme Court (Tuesday 22 April 2014) against the Victorian Government and Linking Melbourne Authority, alleging “misleading conduct” over the claimed benefits of the project.
In a statement of claim lodged today, Brunswick resident, Anthony Murphy is seeking to stop the tendering process, seeking of finance, and entering into contracts for the $8 billion first stage of the project based on what he claims is a misleading business case.
It is alleged the project’s Benefit Cost Ratio (1.4), net economic benefit ($1.476 billion), and projected traffic volumes (100,000 to 120,000 vehicles) are misleading representations, and have not been based on standard methodology for major projects, as claimed.
Fitzroy Legal Service: FLS participation in the East West Link Project Litigation
The Age: East West Link faces Supreme Court challenge. April 21, 2014. Josh Gordon, State political editor for The Age.
The East West Link is set to be challenged in the Supreme Court, with the Napthine government accused of deliberately overstating the claimed benefits of the project.
In a case reminiscent of the movie The Castle, Brunswick resident Anthony Murphy and a team of senior lawyers will try to halt the tender process for the $6 billion to $8 billion project by arguing the state government has misled the public.
In a statement of claim to be lodged on Tuesday, Mr Murphy’s legal team, which includes former Federal Court judge Ron Merkel, QC, will allege the Victorian government and the Linking Melbourne Authority breached state and Commonwealth consumer protection laws by engaging in “misleading conduct” about the claimed benefits.
The government has long insisted the project will generate $1.40 of benefits for every $1 spent, although it has refused to provide details. But as revealed in The Age, the claim relies heavily on the inclusion of what the state government calls “wider economic benefits”.
Infrastructure Australia has told a Senate committee that the state government’s own unpublished estimates show Victoria is expecting to recoup a loss-making 80¢ for every $1 spent using narrower definition excluding wider economic benefits typically used to compare major projects. Mr Murphy’s case is being prepared by Shine Lawyers and the Fitzroy Legal Service, with Mr Merkel, Bushfire Royal Commission lawyer Melinda Richards, SC, and Simona Gory, acting as his legal council.
The legal team will argue the government’s claims about the project are “misleading representations”, not based on standard methodology for major projects.
The government has vowed to sign contracts for the project just weeks before the November 29 state election. Labor has said it will honour any existing contracts if it wins but will cancel the project if no contracts have been signed. Given the tight time frame, any legal delays could have significant ramifications.
Shine Lawyers senior solicitor Paula Shelton said the legal action was seen as necessary after failed attempts to scrutinise the business case through Parliament, freedom-of-information laws and the project’s assessment committee.
Fitzroy Legal Service solicitor Meghan Fitzgerald said the case would centre around transparency and accountability, given the significant impact on the public.
Mr Murphy, who was involved in opposing the Eastern Freeway in 1977, said he wanted a proper evaluation of major projects and transparency from the government.
“All those tens and tens of billions of dollars that have been spent on freeways and toll roads in the intervening 40-odd years . . . it is just not working,” Mr Murphy said. “They’ll build another freeway and congestion is going to increase.”
A spokeswoman for Treasurer Michael O’Brien said it was unsurprising that opponents of the project were using the courts to “further their political agenda”.
“The government stands by the detailed planning and design work that has gone into the East West Link, including the robust business case that establishes the substantial benefits the project will deliver,”‘ the spokeswoman said.
The unusual case is likely to hinge around the question of whether the government, which will collect the toll revenue from the project and pay a private operator regular payments to build and operate the road, can be treated as a commercial entity and is therefore subject to consumer protection laws.