An Australian property developer has sued the Suburban Rail Loop Authority (SRLA), seeking at least A$100 million in compensation after a railway project stopped work on its 218-apartment development in Melbourne. Construction has been on hold for two years, leaving more than 100 buyers waiting for their homes.The dispute involves the Southpoint apartment project on Nepean Highway in Cheltenham, opposite Westfield Southland shopping centre. According to Sydney Today, the problem began because the project’s planned underground car park is close to the route of the proposed Suburban Rail Loop (SRL) tunnel.Developer H1Land says the Victorian government moved to take control of part of the land beneath its property in 2024, forcing it to stop construction. The company claims it was told it would receive fair compensation.However, H1Land alleges that the government was also planning to remove some of its rights over the underground land through a separate process. This could have reduced the compensation the company would receive. The developer has now taken the matter to the Supreme Court and filed a separate legal challenge over the government’s decision.
What’s the controversy?
The Southpoint project received planning approval in 2017, more than a year before the railway project and its proposed Cheltenham station and tunnel were announced.According to court documents, H1Land claims government ministers were wrongly informed that the tunnel would not affect its property. The company also alleges that SRLA did not consult it while preparing the railway plans in 2021.By early 2022, the authority had allegedly not informed the developer that its land might be acquired or that the railway project could affect construction.SRLA proposed a meeting in February 2022. In May, it agreed to pay reasonable costs for design meetings and negotiations. Talks continued for the next two years while H1Land prepared to start construction.During this time, the developer hired a builder and secured approval for construction funding.
Construction stopped after land notice
In May 2024, the builder began bringing workers and equipment to the Southpoint site to prepare for construction.Just two days later, SRLA issued a notice saying it intended to acquire part of the land beneath the property, extending about four metres below ground level. Construction was then stopped.Court documents show that H1Land and SRLA reached an agreement in early September 2024 for an advance payment of A$2.5 million towards compensation.However, H1Land later found that SRLA had sent a recommendation to the minister responsible for the railway project in late August. It proposed removing almost the same underground land rights that were part of the compensation discussions.In 2025, the railway project took control of the disputed underground land rights. Later talks about changing the apartment building’s design failed.H1Land is now seeking compensation for money already spent, losses caused by delays, legal expenses and profits it says it has lost. The total claim is expected to exceed A$100 million.
More than 100 apartment buyers still waiting
The dispute has also affected people who booked apartments at Southpoint. Since late 2021, more than 100 families and investors have agreed to buy homes before they were built.With construction stopped, these buyers are still waiting for their apartments. They are also unable to access the deposits they paid towards their purchases.The matter could take a long time to settle because H1Land has filed two separate legal cases.In addition to seeking compensation, the company has asked the court to review whether the government was legally allowed to remove its rights over the underground land.If H1Land wins that challenge, some of those land rights could return to the company. This could create further problems for the planned railway tunnel.
Case could affect other property owners
The case could also matter to other people whose properties are affected by major government projects.The court will examine whether government agencies have a legal responsibility to avoid harming certain property owners when planning and building large infrastructure projects.H1Land argues that SRLA should have known its decisions could cause financial losses to nearby property owners who already had permission to build. The outcome could affect tens of thousands of property owners whose land is involved in major infrastructure projects.