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Murphy v State of Victoria & Linking

Melbourne Authority
East West Link From Done Deal to Dead End*

*Headline from the Northsider Online News 21 May 2015

Murphys case
The public private partnership through which the East
West Link was to be built was said to involve the State in
carrying on a business & the representations as to the
Benefit Cost Ratio (NCR) and Net Economic Benefit
(NEB) of the project published in the Short Form of the
Business Case made were made in the course of trade
and commerce as per the ACL
It was alleged that the representations were misleading,
unless based on reasonable grounds, and that the
absence of reasonable grounds could be assumed until
evidence was adduced to the contrary
It was further stated on behalf of the Plaintiff that
further particulars would require discovery of

Outcomes sought
Declarations of misleading conduct against the
defendants under section 18 of the Australian Consumer
Injunctions restraining the defendants from making the
representations in trade and commerce (e.g. tendering,
seeking funding, finance) & entering into a contract with
a third party in circumstances where the representations
had been made to or in the course of the procurement
I.e. to force transparency in relation to the financial (and
initially traffic modeling also) aspects of the sell & to
stop the project proceeding until such time as those
issues had been ventilated.

The team & the networks

- Plaintiff Tony Murphy
- Counsel - Ron Merkel QC, Melinda Richards SC, Julian
Burnside QC, Simona Gory, Matthew Albert
- Solicitors Hollie Golding (then Trainee Lawyer) and myself
Fitzroy Legal Service, Paula Shelton of Shine Lawyers
- Interest groups local, environmental, political
RATS (Residents Against the Tunnel), Yarra Council Trains Not Toll
Roads, YCAT (Yarra Campaign for Action on Transport), Tunnel
Picketers & Socialist Party, Yarra Climate Action Now (YCAN),
Public Transport Users Association (PTUA), Protectors of Public
Lands Victoria Inc (PPLV), Kensington & Flemington residents
associations, Royal Park Protection Group, The ALP, The Greens
- Engaging with the Media

Take 1 - Supreme Court

The writ was filed on 23 April 2014.
In May the State and LMA sought orders for the filing of partial
defences and sought a trial on the basis of separate questions,
assuming the representations were misleading.
In mid June the plaintiff issued notices to produce for documents
required to particularise the pleadings.
In late June 2014, the State applied to set aside the notice to
produce on grounds of abuse of court process, relevance, public
interest immunity. Soon after, the Linking Melbourne Authority
sought orders that it not be required to comply until the
application for separate questions had been determined, or in
the alternative, on the basis of public interest immunity and
In July the respondents filed partial defences (later partially
amended), and the plaintiffs sought orders to have the defences
struck out.

The first judgment by Justice Croft was handed down on 8 August

2014, wherein it was held the matter would be determined on the
basis of separate questions, that the onus lay on the plaintiff to
fully articulate allegations of misleading conduct, and that the
questions of discovery versus public interest immunity would be
heard only subsequent to determination of separate questions.
Subsequent to a two day trial judgment was handed down 10
September 2014. No statement of facts was agreed to, and the
respective pleadings formed the factual matrix on which the
decision was based. The separate questions assumed the
representations in the short form of the business case were
misleading, and then asked whether that was conduct engaged in
as part of carrying on a business, in trade and commerce, and
whether the final relief would be available in any event.
The answer given to these questions: NO, NO & NO.

The court of public opinion?

The relevance of the case to public discourse
somewhat different.
- Public debate became increasingly focussed on
government transparency as opposed to rabble
rousing protesters.
- The position on whether the road was a good
idea was overtaken with suspicion regarding
the maintenance of secrecy.
- The concept that the position of Murphy and
his supporters was radical and outlandish was
gaining less traction.

Tom Elliot If its stupidity you want, welcome to the party,

Herald Sun, 17 August 2014
Finally, a major battleground on which the Victorian election will be fought
is the $8 billion East West Link project. Dr Napthines Government loves the
idea, while Labor rejects it on the basis that the money would be better
spent on a cross-city rail tunnel.
Leaving aside my personal views on the Link (I think it makes sense to join
the Eastern Freeway with the Tullamarine one), any project this big demands
a publicly scrutinised business case before large sums of money are
committed. Yet for reasons no one outside the state Cabinet understands,
access to the business case (which does exist) is blocked by spurious
Freedom of Information rules.
How is that a smart idea? If the numbers surrounding the East West Link
stack up, the Government should shout them from the rooftops. If, however,
the road doesnt make financial sense, the project should be shelved. But to
push ahead while maintaining ill-advised secrecy? Thats politically dumb.
Should we be surprised?

Productivity Commission Inquiry into Public

Infrastructure (14 July 2014)
The findings of the Commission ran contrary to the States
position regarding public interest immunity regarding the
business case.
Rec 2.3 All governments should commit to subjecting all public
infrastructure investment proposals above $50 million to
rigorous costbenefit analyses that are publicly released and
made available for due diligence by bidders. In general, analyses
should be done prior to projects being announced. If a project is
announced before analysis is done, for example, in the lead-up
to an election, this should be conditional on the findings of a
subsequent analysis.
Re commercial in confidence - the benefits created through
transparency are likely to be substantial and significant effects on
bids are unlikely, provided there is effective competition in
procurement. Private participants should understand that the
normal presumption of transparency should prevail as a
condition of involvement in government-backed projects.

Take 2 Court of Appeal

Six days after our brutal loss, an appeal the to the Supreme
Court was lodged, seeking to have the judgment set aside in
whole on the basis that the plaintiff had been denied a fair
trial, and procedural fairness, having been unable to have
the opportunity of requiring production of documents &
adducing evidence he wished to rely on in the trial of
separate questions.
It was put on behalf of the plaintiff that each of the
separate questions should have been deemed
inappropriate to answer.
Contrary to popular belief, the appeal was won.
Media focus (and ours) was on the ongoing injunctive relief
preventing the signing of the contract whilst the matter was
remitted back to trial, which was not granted.

A short summary
Re separate questions & discovery: It is one thing to make an allegation without any
basis for it - which is plainly impermissible and quite another to make allegations - as
the appellant did in this case which ex facie were soundly based on the best
particulars which could be given until after discovery In a case like this, where ex
hypothesi the documents needed to prove the appellants allegations were within the
respondents exclusive possession or power, and the respondents refused to produce
them, the appellant not only had no option other than to plead his case as he did but
was perfectly entitled to do so. The propriety of so proceeding is established by a long
line of authority dating back to the nineteenth century.[35]
Re overarching obligation that costs be reasonable and proportionate: to foreclose
a plaintiffs opportunity of obtaining discovery from the State in order to prove a case
which is ex facie implied by so many of the documents as are presently available to
him would be to subvert the justice process. It would mean that, whenever the State
is party to litigation of this kind, it could effectively eliminate the scrutiny of executive
action which the curial process is calculated to deliver by the simple device of claiming
public interest immunity and then pleading that the time required to determine the
validity of that claim would add unacceptably to the costs and delays of the litigation.

Carrying on business/ in trade and commerce within the meaning of the

ACL: the word business is an etymological chameleon which takes
its meaning from the context in which it appears and from the purpose
of the statute in which it is found....its meaning is informed by the
purpose of 2B of the Competition and Consumer Act 2010 which is
ensure that the Crown in right of the State of Victoria should in its
commercial activities be subject to the same regime as corporations and
other private entities.[47-48]
Governmental versus business function: .. As is established by authority,
there is a distinction between those functions of a government which
are purely governmental or regulatory and those which may entail the
carrying on of a business, it is important to keep in mind that, in some
cases, the two may co-exist between those extremities conceivably lies
a range of possibilities of mixed governmental and business activities
which, depending on all the facts and circumstances of the particular
case, may yield a conclusion that the State is carrying on a business in
conjunction with or at the same time as discharging its purely
governmental functions. [58]

Remedies sought: The relief that the appellant might

obtain following a trial may well depend on a number of
factors that cannot be fully if at all evaluated at this stage.
Repetition of conduct is one such factor. The seriousness of
any particular breach is another.. in the absence of all of
the evidence and remembering that the appellant alleges
continuing and ongoing contraventions, the judge should
not have excluded the possibility of a particular remedy
that might be show, upon a full consideration of all facts, to
have the necessary nexus with an established
contravention of section 18 of the ACL. [105]
All questions found inappropriate to answer.

Almost there Take 4 & 5

To the High Court & then back to the Supreme Court

An application for special leave to appeal was heard and refused in
The focus was on the extension of the injunction preventing the
signing of the contracts, and the alleged failure to take the harm to
the public as a relevant factor into account in assessing where the
balance of convenience lay.
It was held the matter could be agitated following full hearing in the
Supreme Court. The contracts were signed that afternoon.
Back in the Supreme Court, it was argued on behalf of the State and
the Linking Melbourne Authority that the public interest would be
harmed by release of the full business case, even with Harman
undertakings in place.
A change of government, and the business case was released to the
public in the public interest, and commitments to transparency in
government decision making in infrastructure projects affecting
Victorians were reinforced by the incoming government as a central

Case as a political case in the traditional sense,
but key message was governance for the people
not for corporations
Democratic obligations of transparency &
The power of people to exercise their political will
in unity despite disparate interests
The determination of people to engage in
complex litigation on a shoe string if there is a
sense of shared ownership & faith
The long term impact on environmental concerns