A Federal Court injunction to stop the construction of the southern section of the Bunbury Outer Ring Road has failed.
Main Roads began clearing land on August 1, for the 10-kilometre stretch of highway that would join up with the central and northern sections of the road.
Work was able to begin after a delegate for federal environment minister Tanya Plibersek approved the environmental application for the project.
Non-profit group, The Friends of the Gelorup Corridor has been fighting against the specific section of the road since funding for it was announced in 2018.
The group says its main concern is the environmental impact, particularly the future of the critically endangered western ringtail possum and endangered black cockatoo and minnow.
The Friends of the Gelorup Corridor was able to get an interim stop work order on the land clearing on Friday.
On Monday Justice Colvin heard arguments from Friends of the Gelorup Corridor's lawyer Angel Aleksov and Main Roads lawyer Joshua Thomson.
The Mail understands that Mr Aleksov's main argument was that the approval of the project and the management plans that approval hinged on were "fragmented" by being split between the minister and a delegate in a "legally impermissible" way.
It is further understood that in defence, Mr Thomson told the court that any delay to the project could cost the State Government more than $10 million and extend it by another seven months.
Justice Colvin adjourned the court until Tuesday, where the hearing was live streamed.
On Tuesday, the main argument brought forward by the parties was about the definition and authority of a delegate under the EPBC Act.
Mr Thomson said Part C of the document stated 'a delegate' could sign off on behalf of the minister.
"The last minute point the applicant seeks to make has no legs," he said.
Mr Aleksov said the definition did not work in Western Australia and that the approval document used the word 'minister' and not 'delegate'.
When announcing his decision, Justice Colvin said it was not for the court to decide whether or not the environmental approval should have been granted.
He said he was not satisfied that the application for the injuncture had merit and dismissed it.
He said he would publish his decision in full in due course.
A Friends of Gelorup Corridor spokesperson said members were devastated by the decision.
"Our community has been strengthened and splintered by this action, and the enormous distress of watching our 400-year-old trees shredded through a woodchipper will now recommence," they said.
Australian Greens Party founder Bob Brown said the decision would result in the endangered animals being "a giant step closer to extinction".
"Like the minister, the judge flagged the dollar value of the roadworks but gave no value to the woodlands and their species," he said.
"This is an environmental disaster on Plibersek's watch. It is indicative of the Albanese government's intention to smash any precious piece of national heritage which gets in the way of so-called 'development'.
"I laud the Friends of the Gelorup Corridor. They are locals who have been completely ignored by the Albanese government and this minister.... this is another dark day in Australia's abysmal environmental history."