James Packer's $570 million six-star hotel plan could become mired in the Supreme Court.
Angry Burswood residents are on the verge of legal action against the Barnett Government to halt its proposed sale of 5.8ha.
Lawyers for 23 residents from units and townhouses in Mirvac's Burswood Peninsula development are incensed that public processes governing the sale and any development application to build the hotel will not apply.
The hotel would be within metres of some homes, block city views and ensure Burswood Park golf course closed.
They did not learn of the proposal until Colin Barnett and Crown announced it in August and the Government has not allowed them a right of review under the public planning system.
The Government intends to use the 1985 Casino Agreement Act to sell the 5.8ha to Mr Packer's Crown Limited for $60 million and exempt the casino from having to lodge its plans with the Town of Victoria Park or the WA Planning Commission.
The Premier says Crown has an "entitlement" to buy the land, which the Government intends to sell at a $35 million discount on the Valuer-General's valuation.
The move is based on the Act that says the State can "excise" up to 10ha from the "resort site" to "grant or lease" it to Crown.
The "resort site" includes the existing Crown development, the Dome, carpark, Burswood Park and the golf course.
The Government also says usual planning processes will not apply because the Act allows the Gaming Minister to take over planning powers for the site.
Lawyer Doug Solomon, for the residents, said the Premier's contention that Crown has an "entitlement" to buy the land was "clearly fictional".
He will also argue that once the land is excised from the resort site to be sold, the planning exemption should no longer apply.
"All we want is the opportunity to have normal State planning procedures to apply to this land and not some sort of secret process," Mr Solomon said.
Last week he served a notice on the Government to get documents about the case because he said residents were frustrated by the lack of detail the Government gave at meetings.
He told the State Solicitor's Office that, depending on the information handed over, his clients would seek court declarations that Crown did not have an entitlement and that usual planning rules applied. He might also seek an injunction to stop the sale.
Developer and Burswood resident Neil Kidd said he expected many more of the 1000 nearby residents to join an action.
Mr Barnett's office said it would be inappropriate to comment with legal action pending.
A lawsuit could delay or halt construction of the hotel, which Crown wants to begin within months. The hotel and a big expansion of gaming tables are central for Mr Packer's plans to market Crown Perth to Asian high rollers and tourists.
Crown declined to comment.