The firm behind a planned rail freight terminal in Fyshwick threatened to launch legal action against the ACT government, alleging its handling of the proposal was "highly irregular and, indeed, unlawful".
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Capital Recycling Solutions also accused the planning directorate of "doing all it can to frustrate and delay" the project.
The threatened litigation never eventuated after the government agreed to sell a controversial parcel of land to the company.
The company's directors, Ernest Dupere and Adam Perry, made the explosive allegations in an email to a senior planning executive on May 7 last year.
The email, published under freedom of information, was sent a month after representatives from both parties met to discuss the project, including the direct sale of Block 8, Section 11 to the company.
The company wanted access to the land for its proposed rail freight terminal off Ipswich Street. It has long-held plans to transport recyclable material via railway to Goulburn, then Port Botany.
The government had invited an offer on the block in October 2017, but it was withdrawn amid concerns that the firm's proposed use of the site was not allowed under planning rules.
In August 2018, the planning directorate revoked development approval for a concrete slab - a small, but significant part of the terminal proposal - after an internal review found it should not have been rubber stamped in the first place.
That ruling was overturned in the Supreme Court in March last year, with the judge finding that the concrete slab was not, in fact, prohibited under zoning rules. The directorate's decision to revoke the development approval was therefore invalid.
In her judgment, Associate Justice Very McWilliam warned the planning system would be thrown into a "state of anarchy" if development applications could be approved one day and revoked the next.
The recycling firm believed the offer to purchase the land would be automatically reinstated after the decisive ruling.
It has become abundantly clear to us that, for reasons unknown, the directorate will continue to do all it can to delay and frustrate our efforts to develop a railway freight terminal in Canberra.
- Capital Recycling Solutions directors Adam Perry and Ernest Dupere
But in a letter to Mr Perry on May 6, an ACT government senior planning official said it was only "willing to consider" reissuing the offer once new development applications for the project had been approved.
Mr Perry and Mr Dupere responded a day later via email, accusing the government of "once again moving the goal posts".
"You state that the land sale shall proceed if, and when, the development applications have been approved. This is completely open-ended, unfair and gives us no security to continue with out planning investments," the email read.
"Given the court has re-instated one consent, how many others do you expect us to obtain before the land sale can proceed?
"It has become abundantly clear to us that, for reasons unknown, the directorate will continue to do all it can to delay and frustrate our efforts to develop a railway freight terminal in Canberra. From any perspective, even from a cursory examination of the timeline of events, no other conclusion can be reached."
The pair threatened to launch legal action against the government if it did not start the process to reinstate the offer within seven days.
"We will be seeking costs and damages from the territory as the historical handling of this matter has been highly irregular and, indeed, unlawful," the email stated.
The senior planning official wrote back three days later, advising that a new offer would be issued if the new development application for the freight terminal - which was under assessment at the time - was approved.
Separate development applications for the freight terminal and concrete slab were given the green light, on the same day, less than a month later. The planning authority ruled both developments were suitable for the site.
In late August, Suburban Land Agency chief executive John Dietz signed off on a deal to sell the block to Capital Recycling Solutions for $818,000.
The Canberra Times this week asked the planning directorate if the decision to reinstate the offer was in any way influenced by Capital Recycling Solutions' threat of legal action.
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In response, a spokesman said the direct sale could not proceed until after the court action had been finalised. The court case finished on March 16, 2019.
The spokesman said the directorate "followed lawful processes" during negotiations.
Asked to explain his strongly-worded email to the ACT government's senior planning official, Mr Perry said the company had expected, "like night follows day", that the offer would be reinstated once the court ruling was handed down.
He said on reflection, the land sale was handled "relatively appropriately". The source of frustration remained the directorate's decision to revoke the development approval back in 2018.
Having finally secured the land and various development approvals, Mr Perry was hopeful freight trains would be moving in and out of Fyshwick later this year. The recycling firm was in talks with two rail operators about running the facility, he said.
The company is still awaiting a verdict on an environmental impact assessment for its proposed material recovery facility, which would also be located at the Fyshwick site.
That project was put forward after it abandoned plans for a $200 million waste-to-energy plant amid opposition from the community and ACT Greens.
