Landowners’ secret compo win over West Gate Tunnel works

Ben Carroll won’t say how much money was paid out to 40 homeowners in an out-of-court settlement over the trouble-plagued West Gate Tunnel.

Dozens of homeowners who live above the $10.8bn West Gate Tunnel have won a secret multimillion-dollar compensation payout because their land titles extend to the centre of the earth.

The Herald Sun can reveal that 40 Yarraville residents have hit the jackpot – landing what is believed to be an average of about $100,000 each – with the state government quietly settling out of court earlier this year.

The exact deal, and why the government folded in the test case, are being kept under wraps, with homeowners and lawyers forced to sign a gag order.

Deputy Premier Ben Carroll would not say how much residents won in compensation but confirmed all impacted locals had now been paid.

A group of Yarraville residents have been awarded what is believed to be $100,000 each under the secret settlement deal. Picture: David Caird

“This project, I understand, is completed, yes,” he said.

“Landowners who essentially have their property rights infringed are entitled to compensation.

“This is nothing new. It goes through a strong stringent process through the Victorian government Land Monitor. It’s there for these types of circumstances.”

Mr Carroll said the final payment to each resident was based on advice from independent experts.

“It’s a commercial matter between the parties,” he said.

Mr Carroll said a confidentially agreement was put in place to prevent residents from publicly stating how much compensation they received.

“All these commercial negotiations are often done under commercial terms and conditions,” he said.

It comes as property owners above the route of the $14bn Metro Tunnel are fighting a similar compensation case, with the government capitulation in the West Gate Tunnel dispute raising their hopes of a similar windfall.

Most modern property titles only go to 15m underground, but older titles – including those in Yarraville – detail that ownership of land extends to the centre of the earth.

Last year Adrian McMillan, an associate at Slater and Gordon, said “residents have had something that they own taken by the government, and it’s their right to be compensated for that”.

Claims were made for up to 10 per cent of the value of each property, with estimates of a $4m total payday if the residents had won their case at that time.

The government initially rejected the claims by arguing tunnels under properties did not harm values.

The compensation win has given other people living above the Metro Tunnel renewed hope of a taxpayer-funded windfall. Picture: David Caird

A confidentiality clause in the settlement means taxpayers are in the dark about how much cash has been forked out and why the government did not continue to fight the case at the Victorian Civil and Administrative Tribunal.

The Herald Sun asked a series of questions of the government, including how much had been paid out in total through the settlement, why nondisclosure agreements were required, why it settled and what the implications were for other major projects in Melbourne.

A government spokesman sent back two lines in response.

“Claims are assessed in accordance the (sic) Land Acquisition and Compensation Act 1986,” he said. “As land acquisition matters are a commercial matter between affected parties it’s appropriate they remain confidential.”

As revealed by the Herald Sun last year, people living above other tunnels such as the $18bn North East Link and the $35bn Suburban Rail Loop will not have the same rights to compensation due to the government changing the law for underground acquisitions.

The payout is the latest in a series of issues to plague the West Gate project, which has blown out by $4.1bn and is three years behind schedule, with an expected completion date of 2025.