Melbourne’s proposed East West Link could still go ahead in some form even if a Labor government is elected in November, according to legal advice seen by Crikey.

Labor has promised that the road proposal would be killed stone dead should it win power — as is likely — because the incoming government would cease defending a court case currently being run by Yarra and Moreland councils, seeking to stop the road proceeding.

However, Labor’s promise that the East West Link would not go ahead is based on the assumption that the councils’ court case against the government over the matter would be automatically won should no defence be offered by a new government.

The councils’ case hinges on the charge that the road project has been improperly approved, under the Major Transport Project Facilitation Act, established for the East West Link and other measures. In such a case, the contracts already signed would be unenforceable. Any suit for financial restitution would be limited in impact by the initial impropriety of the contracts.

However, Labor’s legal advice does not establish the strength of the councils’ case, offering only an “if-then” scenario and relying on the public perception that an undefended suit would automatically lose.

Legal advice seen by Crikey establishes that the mere lack of defence does not guarantee the suit will fail, and recent cases before the Supreme Court establish that principle. There is also scope for third parties to take up the defence of the case, rather than wait for the contracts to be found against, and then seek restitution.

Such a third party could be one of the contracting parties such as East West Link, or one of the contractors engaged to build the link. Alternatively, it could be an interested body such as the RACV or the Australian Motoring Enthusiasts Party, or an individual.

“The contracts are not worth the paper they’re written on.”

However, should the case be won by a new third party, then a new government would face a “pay or play” decision — a settlement potentially in the billions for contracted parties and downstream contractors for no result, or continuing with the East West Link in some modified form.

Labor’s commitment to dumping the link came after months of weighing up the strategic pros and cons of the move — the votes such a position may cost in the outer eastern and western suburbs versus the huge opposition to the road in inner Melbourne (and across the city, due to early plans to gouge an exit hole in Royal Park).

Ultimately, it was decided that supporting the project would give a huge boost to the Greens’ vote in the area. The Greens are likely to take the state seat of Melbourne, and have hopes for potential wins in Richmond and Brunswick. However, some resources were directed away from those seats to contest Prahran, held by Liberal MLA Clem Newton-Brown.

Labor ultimately decided that insufficient opposition to the East West Link might be enough to guarantee the Greens at least one additional inner-urban seat with minimal commitment of resources on their part. Once taken, Labor would find such a seat difficult to retrieve — and a close result could leave the Greens with the balance of power in both lower and upper state houses.

Labor’s explicit commitment to not defending the case, and essentially adopting the councils’ position, is a blow to the Greens’ strategy, as they had hoped to make a clear differentiation on the matter and own the Melbourne inner city, the most extended Left/Green area in the country.

Victorian Greens leader Greg Barber said “once the contracts are signed, you would expect the court to allow the construction company to join the case and protect its interests. So Labor are back to where they started. Will they or wont they build the road?”

Socialist Party councillor on Yarra Council and candidate for Richmond Stephen Jolly, a leader of the public campaign against the East West Link, accused the ALP of “double dealing”, saying “[Victorian Opposition Leader] Daniel Andrews should have known this last week, when Labor claimed they had ‘dumped’ the tunnel. They are being devious. Labor can’t be trusted to stop the tunnel.”

Despite these concerns, an opposition spokesman maintained that Labor’s case was strong: “The contracts are not worth the paper they’re written on.”

 

Peter Fray

Fetch your first 12 weeks for $12

Here at Crikey, we saw a mighty surge in subscribers throughout 2020. Your support has been nothing short of amazing — we couldn’t have got through this year like no other without you, our readers.

If you haven’t joined us yet, fetch your first 12 weeks for $12 and start 2021 with the journalism you need to navigate whatever lies ahead.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW