In the decision of Hunt Leather Pty Ltd v Transport for NSW [2023] NSWSC 840, the New South Wales Supreme Court considered whether the defendant should be liable to pay damages for nuisance arising from delays in the construction of the Sydney Light Rail (SLR).

The claim was brought as a class action led by two businesses situated in Sydney’s CBD, Hunt Leather and Ancio Investments.

The construction works were performed by a third-party contractor and completed 12 months behind schedule. The plaintiffs argued that Transport for NSW was responsible for the delays because of alleged failures in the project planning, design, procurement, and contract negotiation stages.

The plaintiffs claimed that their profitability had been impacted by the restrictions placed upon pedestrian and vehicular movement, the presence of hoardings and the vibrations, noise and dust caused by heavy machinery during the prolonged construction phase.

In deciding this issue, Cavanagh J considered the efforts made by Transport for NSW to minimise the interference with local businesses. His Honour held that the strategy for staged delivery of the works had failed in this regard.  This was because the defendant had provided the contractor with relief for `utilities risk’ but no deterrent for non-compliance with the delivery schedule in the contract terms. Accordingly, the prolonged occupation of zones along the SLR route was “not only foreseeable but predictable” and Transport for NSW had not taken reasonable care of the interests of the business owners.

Cavanagh J held that Hunt Leather and Ancio Investments were entitled to damages in private nuisance due to the “substantial and unreasonable” interference caused by the delays, which were a result of Transport for NSW’s failure to take reasonable care.

His Honour noted that Hunt Leather and Ancio Investments succeeded partly because they operated “small businesses which were highly susceptible to the effects of construction activities without any means of reducing the impact.” His Honour emphasised that mere proximity to construction works along the SLR route did not necessarily establish interference for other businesses. In addition, the businesses would not be compensated for the entire period of construction, but rather, the period beginning from the point when the delays caused the inconvenience to be “unreasonable.”

The full judgment is available here.