The Age: Legal challenges to the East West Link – potent threat or a political posture? August 10, 2014, Clay Lucas, Adam Carey, Jane Lee
Legal difficulties and questions over the East West Link cost-benefits, risks and transparency continue to mount. Is the road project really a fait accompli, or might it yet be roadblocked? Clay Lucas, Adam Carey and Jane Lee take a fast tour of the street scene.
Q. Last week, constitutional questions were raised over East West Link’s construction. Just a detail for wonks or might it derail the start of works?
Questions around the need for special legislation to build the East West Link were raised by Labor, who sought advice from Melbourne University constitutional law expert Michael Crommelin. The professor said while it was possible to build the road without special legislation, it would be highly unusual. Previous big road projects, including CityLink, EastLink and the Peninsula Link, had specific laws governing them. Professor Crommelin argued signing contracts for billions of dollars with builders without special laws left the $14-18 billion project in a similar state to a national school chaplaincy program, struck down earlier this year in the High Court because the Commonwealth did not have legislation enabling it.
The Napthine government is desperate to sign contracts to build the road by October and last year changed laws put in place by Labor in 2009 to ensure this was possible. It argues its new laws enable the government to contract, design and build the road without any new legislation. It is unlikely to derail the start of works – although who knows what future court challenges could be thrown in the road’s path.
Q. Some councils are also in court over the $18 billion freeway – what’s their case based on and how is it progressing?
Moreland City Council last month voted to take the Napthine government to court. It called on three other inner city councils, Melbourne, Yarra and Moonee Valley, to join the legal fight but only Yarra answered the call. Together they are pursuing a judicial review in the Supreme Court of Planning Minister Matthew Guy’s June 30 decision to approve the project.
Their argument is twofold: that the government’s refusal to release the business case has denied the public the chance to make an informed decision about the project’s costs and benefits; and that Mr Guy’s approval is invalid because the planning process was botched. The expert panel that approved the East West Link after a 30-day public hearing did so on the basis of a reference design that does not match the actual road to be built. Crucially, the Elliott Avenue interchange in the centre of Royal Park was scratched from the plans after its approval and replaced by an exit onto Flemington Road, which has not been assessed. “These are fundamental changes to the project,” Yarra mayor Jackie Fristacky said. Papers have been lodged in the Supreme Court but a date for a hearing is not yet set.
Q. Then there’s the Supreme Court challenge mounted by a Brunswick resident with Ron Merkel QC representing him. Where is it at?
Anthony Murphy’s lawyers argue the state and the Linking Melbourne Authority have breached consumer protection laws because they have based the project on “misleading representations” about its estimated cost benefits, and traffic forecasts estimates.
So far, the state has relied on “public interest immunity” to avoid releasing documents Mr Murphy has sought, including its long-form business case for the road.
This leaves the court in the awkward situation of having to assume the state and the LMA have made the “misleading representations” to tenderers and financiers, in order to work out the legal challenge, without either conceding they have made them, and without much evidence that the conversations took place.
On Friday, the battle-lines were finally drawn, with the judge siding with the state that it’s up to Mr Murphy to prove the alleged misrepresentations. The judge will now decide the separate question of whether the state was carrying on a business with the East West Link (Mr Murphy argues project brochures are akin to a prospectus) to determine whether he should grant the injunction. The parties will present their arguments on this to court on August 25.
Q. How do these three legal challenges differ or overlap?
The two legal challenges and the constitutional argument that’s yet to be brought against the road, all make different versions of the same point. It is the Victorian government (and, by extension the Commonwealth government which is helping fund the road) should not be entitled to spend a significant amount of public money without telling the public why it thinks it should spend it and whether it will be worth it in the end.
All three are trying to test the limits of government power in different ways – the councils’ case challenges the Planning Minister’s power to approve the road, while Anthony Murphy questions the government’s duties to taxpayers as consumers of the road. The constitutional argument by contrast, highlights the limits to the federal government’s power to give states money without making a law, that is, without being accountable to the public via Parliament.
Q. Is one more likely to succeed, or is their chief goal strategic delay?
The two inner city councils want a judge to rule Mr Guy’s decision to approve the East West Link invalid, but the legal challenge is also part of a political strategy to delay the project and make it an election issue by undermining investor confidence in it.
The Napthine government is on course to sign contracts with one of two consortiums competing to build the road in October, meaning the road would be built no matter which party wins November’s state poll. But if the contracts are not signed by November 4, when the government enters caretaker mode, Labor’s stated opposition to the project will come into play. Cr Fristacky argues that any prudent bidder ought to think twice about committing to such a major road when the route it will take has changed at a late stage.
Q. Some legal argument focuses on compelling rigorous and transparent cost-benefit analysis. What are the odds of that?
While legal argument from Moreland Council has singled out the secret business case the Napthine government has completed but refuses to let the public see, it seems unlikely to be exposed via the courts. The skirmish, though, might ultimately be won in the political arena: the federal Coalition went to last year’s election pledging to release costings of major projects. Despite this, it did not do so on the East West Link – which it is putting $3 billion of federal funds into – at its first opportunity last month, when Labor requested the business case through the Senate.
But political pressure was added to the equation this week by former Telstra boss Bill Scales’ review of the National Broadband Network rollout. Scales, also the former Productivity Commission chairman, said all public infrastructure projects worth over $1 billion should be subject to a cost-benefit analysis, with the results made public before the project starts.