Written by In Transport for NSW v Hunt Leather Pty Ltd; Hunt Leather Pty Ltd v Transport for NSW [2024] NSWCA 227, Sydney CBD business owners along the Sydney Light Rail corridor commenced representative proceedings against Transport for NSW (‘TfNSW‘), alleging that extended construction works – including noise, dust, vibration and restricted access – substantially interfered with their use and enjoyment of land and caused financial loss. The decision provides important clarification of private nuisance principles in the context of major infrastructure projects.
At first instance, the Supreme Court found TfNSW liable in private nuisance for delays beyond an amended construction timetable and awarded damages to some plaintiffs. However, it refused to allow recovery of a 40% litigation funding commission as damages. TfNSW appealed the nuisance finding, and the plaintiffs cross-appealed on the funding issue.
The Court of Appeal unanimously allowed TfNSW’s appeal and overturned the finding of nuisance. It held that the plaintiffs failed to prove that the construction delays amounted to a substantial and unreasonable interference. In particular, the Court held that TfNSW’s Initial Delivery Program could not be treated as a reliable benchmark for unreasonableness, as it could not fully account for practical contingencies such as weather conditions and the discovery of underground utilities. As such, the Court emphasised that construction authorised by statute does not become actionable nuisance merely because it exceeds projected timeframes. In this case, there was insufficient evidence to establish that the actual duration of works, given the complexity of the project and the unknown utilities encountered, was legally unreasonable.
Moreover, the Court dismissed the cross-appeal, confirming that litigation funding commissions are not recoverable as damages. Entering into a funding agreement was a voluntary commercial decision and not a loss caused by any alleged nuisance.
Ultimately, this decision underscores that project delays alone do not establish nuisance. Claimants must demonstrate, with clear evidence, that the interference was substantial and unreasonable in the circumstances. It also reinforces limits on recoverable damages in large-scale infrastructure disputes, particularly in relation to litigation funding costs.