Court case: ConnectEast says Transurban is ‘unjustly enriched’ with fees

Toll road giant Transurban could have overcharged ConnectEast millions of dollars, the Victorian Supreme Court has heard.

An aerial view of the EastLink freeway.

ConnectEast has accused the nation’s biggest toll road operator, Transurban, of unjustly enriching itself by skimming too much money off fees, as a legal stoush between the two companies gets under way in the Victorian Supreme Court.

Transurban, the $40bn toll road behemoth, denies the claim in court documents as both companies argue the value of servicing “roaming agreements” — which in this matter is a dispute about a fee worth 18 cents that is sparked by cars with a CityLink e-tag or account trips on the EastLink.

EastLink near the Monash freeway interchange, at Mulgrave. Picture: Andrew Batsch

Under an agreement signed by Australian toll-road operators, while different companies offer their own e-Tags drivers can seamlessly travel on most toll roads and still pay their fees without needing a different account with each toll road operator, according to ConnectEast’s statement of claim dated November 23, 2020 and released to The Australian by the Victorian Supreme Court.

To facilitate this, Transurban charges and receives their own customers’s toll fees as they travel on the EastLink, which connects suburbs in the east and southeast of Melbourne. They then pay EastLink that money, minus a fee worth $0.18 which Transurban says it incurs due to this arrangement. The fee is absorbed by the companies, not the consumer.

EastLink initially agreed to the value of the fee — which according to the statement of claim is adjusted by CPI annually — but three years ago lodged their case to claim “CityLink has been enriched … in respect of each transaction”.

“The said enrichment is unjust because the fee or charge for the Link roaming service that was retained by CityLink … was in respect of a condition that was not fulfilled. (And) was done so in contemplation of a state of affairs which did not materialise,” ConnectEast’s statement of claim reads.

EastLink argues the fee — which has been charged since 2009 — is too high, Transurban should pay them back and they want the court to conduct an “inquiry” into how much the fee should be.

Transurban operates key Australian toll roads in Melbourne, Sydney and Brisbane, and also in the US in Washington and in Canada in Montreal.

According to a table attached to their statement of claim, between January 1 2009 and October 31 2020, more than 525 million CityLink customers drove on the EastLink.

If Transurban kept $0.18 for every one of those trips, they could be up for more than $100 million.

According to Transurban’s concise defence dated February 12 2021, they deny the fee is too high and say a statute of limitations should prevent the court from ordering a repayment from before 2014 anyway.

“ (Transurban) denies that discount amount exceeded at any relevant, the ‘net incremental marginal cost’ of providing the ‘Link roaming service’ to ConnectEast,” Transurban’s concise defence statement reads.

“It says further that, insofar as any claim is made in respect of payments made by ConnectEast to CityLink on, or before 23 November 2014 … six years have elapsed since such payment and it follow that those claims are statute barred.”

Further, they say any amount of money received from ConnectEast under this scheme was “received in good faith” and was “expended on other projects”.

It is believed experts from both parties will be subject to a “hot tub” at the trial, which kicked off last week, where experts can give evidence before a judge on the same issue at the same time.

It comes just months after the competition regulator blocked Transurban’s bid for a majority stake in the operator of Melbourne’s EastLink toll road in September.

The Australian Competition and Consumer Commission said Horizon Roads, which operates the EastLink toll road in Melbourne through ConnectEast, is the only other private toll road operator in Australia.

ACCC chair Gina Cass-Gottlieb said the proposed acquisition would “result in Transurban entrenching its position in Victoria”.

“Transurban would operate every single private-sector controlled toll road in Australia,” she said.

A Transurban spokesman said: “These proceedings are about administrative arrangements between CityLink and ConnectEast and do not impact the toll customers pay. As this matter is before the courts, we won’t be making any further comments.”

ConnectEast declined to comment. The trial continues.