Australia Melbourne's famous tram restaurant sues Yarra Trams

© Supplied The Colonial Tramcar Restaurant

The owner of Melbourne's restaurant trams is suing public transport bodies over claims a $10 million sale fell through after its carriages were taken off the rails.

The Colonial Tramcar restaurant is suing Yarra Trams and Public Transport Victoria for allegedly failing to provide it with three trams to continue operating, as per its long-term agreement with the two transport bodies.

Last October, Yarra Trams took all three of the company’s trams, built between 1947 and 1950, out of service, saying their badly weathered structures raised safety concerns in collisions.

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Yarra Trams is the trading name of the tram network in Melbourne , which is owned by VicTrack and leased to Yarra Trams by Public Transport Victoria on behalf of the Government of Victoria.

Colonial Tramcar Restaurant chief executive Paul O’Brien said at the time that his company was willing to invest millions, but claimed that Bendigo Workshops were unable to schedule the required upgrades of the three trams until 2020.

© Supplied The Colonial Tramcar Restaurant was a popular tourist and special occasion dining outlet before it was taken off the rails in October 2018.

The company has now filed a Supreme Court writ, citing Yarra Trams and Public Transport Development Authority, part of Public Transport Victoria, as defendants.

The Restaurant is seeking an order that Yarra Trams, or alternatively PTV, perform its obligation under an agreement to provide Colonial Tramcar with three trams in order to run its business.

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It claims ‘‘Yarra Trams has breached its duty of co-operation and/or its duty of good faith contrary to the terms of the Current Tramcar Agreement’’.

Colonial Tramcar says negotiations for the sale of the business fell through, due to "Yarra Trams' conduct in decommissioning the trams and its refusal to perform its obligation".

It says the the sale was worth more than $10 million but that "further particulars of Colonial Tramcar’s loss and damage will be provided prior to trial".

Colonial Tramcar also claims it is not liable to pay Yarra Trams a disputed amount of more than $243,000, which Yarra Trams claimed for maintenance costs and wages between September 14, 2018 and November 23, 2018.

Colonial Tramcar says it paid the amount "under protest and upon and express reservation of its right to recover that amount from Yarra Trams".

Both the Department of Transport and Yarra Trams declined to comment on a matter before the courts.

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Melbourne tram route 86 is operated by Yarra Trams on the Melbourne tram network. It operates from Bundoora RMIT to Waterfront City Docklands.

According to Yarra Trams, the Colonial Tramcar Restaurant was responsible for upgrades, and for other capital investments in relation to the restaurant trams.

Yarra Trams had been in discussions with the Colonial Tramcar Restaurant operators since 2016 regarding the need to upgrade the trams.

In late 2018 the state government had offered to provide a W-Class tram upgraded to meet modern safety standards, for restaurant fit-out that would have enabled the business to keep running while the company arranged for the other two trams to be upgraded.

But the Colonial Tramcar Restaurant had not acted on that offer.

Yarra Trams has said the Colonial Tramcar Restaurant was also given the option of operating as a stationary eatery on siding tracks at Southbank.

Colonial Tramcar Restaurant CEO Paul O’Brien did not respond to requests for comment.