There will certainly be class actions arising out of the methane gas leaks in Cranbourne, an outer suburb of Melbourne. At the moment, 230 homeowners have been advised to relocate and up to a thousand may be affected.

It is almost certain that someone will be legally liable for losses but who that is remains unclear.

The likely candidates seem to be as follows:

  1. VCAT (Victorian Civil and Administrative Tribunal) who approved a a settlement in a dispute between the Council and the developer.
  2. EPA (Environmental Protection Agency) who licensed the Council to build and operate the landfill (“tip”).
  3. The development company.
  4. The Council (Casey).

There will, of course, be legal buck passing between these defendants.

Any legal claims would be for negligence. A major practical problem will be whether anyone has enough insurance cover. There could possibly be claims for damages for up to 1,000 homes with the biggest claims for total loss of the home. Legal fees will be enormous.

Even if the claims averaged $100,000 including legal costs, then the figure would be $100 million.

Ironically, the State Government probably cannot be sued. But that is not the end of it.

  • VCAT cannot be sued because it is like a court.
  • The EPA would have State Government backing and could afford to pay.
  • The development company may have some insurance, but probably not enough.
  • Damages against the Council would fall on the innocent ratepayers.

In the end, the State Government must fix this quickly and properly.

It should immediately set up a Compensation Commission and pay the residents out. That Commission could then take over the residents’ legal right to sue. Really the only non-government contributor would be the developer’s insurance company and there may be no liability there for the developer seems to have obtained all the required permits.

This case demonstrates the truth of the old legal saying: sh-t happens.

The Government has a moral obligation to pay.

Interesting Footnote: Last week the media stated that solicitors Slater & Gordon were considering a class action and had 80 enquiries. In today’s Herald Sun, there is an opinion piece headed “How a system ruined dreams”. Oddly enough, it is by a lawyer from Slater & Gordon who repeats that they have had 80 enquiries. Although disclosure has been made, this is little more than advertising.

And the dreams of Slater & Gordon will not be destroyed — they will make a fortune in legal fees.

Peter Fray

Save 50% on a year of Crikey and The Atlantic.

The US election is in a little over a month. It seems that there’s a ridiculous twist in the story, almost every day.

Luckily for new Crikey subscribers, we’ve teamed up with one of America’s best publications, The Atlantic for the election race. Subscribe now to make sense of it all, and you’ll get a year of Crikey (usually $199) and a year’s digital subscription to The Atlantic (usually $70AUD), BOTH for just $129.

Peter Fray
Editor-in-chief of Crikey