THE State Government was wrong to fast-track a contentious East Melbourne development in the name of the 2006 Commonwealth Games because the project could not have been completed in time for the event, the Court of Appeal has found.
The decision is an embarrassment for the Government and Premier John Brumby, who championed the $86 million scheme.
In December 2004, then planning minister Mary Delahunty seized planning control of development around the Hilton Hotel from Melbourne City Council, citing its importance to the upcoming games.
Her intervention removed the usual objection and appeal rights for local opponents of the scheme.
The project, by Hilton owner Thakral Holdings, was to include a refurbishment of the Hilton and MCG hotels and a 15-storey residential and retail tower. The tower was never built.
In a split decision yesterday the Court of Appeal overturned an earlier ruling by former Supreme Court Judge Stuart Morris. The court noted that the minister's intervention was for a "wholly implausible" reason as visitor accommodation could not be built in time for the Games.
JASON DOWLING and ROYCE MILLAR