Not a nuisance: NSW Court of Appeal overturns decision that Sydney Light Rail caused nuisance

The NSW Court of Appeal has upheld an appeal by a NSW Agency in relation to a class action commenced by businesses claiming to be affected by the construction of the Sydney Light Rail. The Court found that delays in construction did not constitute an actionable nuisance.

Snapshot

• The Court found that occupation of certain delivery zones along the Sydney Light Rail (SLR) route for longer than was identified in project delivery plans was not necessarily unreasonable, such that it would give rise to actionable nuisance.
• The Court found that “[i]t cannot be the law that construction authorised by statute becomes actionable nuisance if it takes a month or two months or three months longer than scheduled”.
• While the decision may provide a degree of comfort that infrastructure providers do not need to plan out each and every aspect of a development program, it leaves open the question of when delay will be unreasonable, such that it constitutes nuisance. Further, every case will turn on its facts and as such it cannot be assumed that this decision provides any guarantee that other scenarios involving prolonged construction would necessarily reach the same result.
• It remains to be seen how other similar projects (such as the Parramatta Light Rail Stage 2 or the Sydenham to Bankstown retrofit) will address potential disruption and delay.

Key facts

• An overview of the key facts of the case can be found in our earlier blogpost on the first instance decision (see here). A summary of the facts pertinent to the appeal are set out below.
• In December 2014, Transport for NSW (TfNSW) entered into a contract with a consortium for the design and construction of the SLR project in stages, to be completed by March 2019.
• An Initial Delivery Program (IDP) was prepared for the SLR, which divided construction into stages, or “fee zones”, to be completed by set times to minimise disruption. A timetable substantially similar to the IDP was the subject of a media release.
• The SLR project was not completed until March 2020, a year behind schedule. The delays were largely caused due to the need to treat known and unknown utilities along the SLR route.
• The plaintiffs (respondents on appeal) alleged that both a public and private nuisance had occurred. They claimed that the nuisance was constituted by the nature of the activities (e.g. the vibrations, noise and dust from construction and the presence of hoarding), as well as the length of time those activities were undertaken.
• During the trial, the plaintiffs produced an “amended IDP” (Amended IDP), prepared by a “planning and programming” expert which reflected, inter alia, the expert’s opinion of how long it ought reasonably to have taken to perform all the activities in the staged construction of the SLR, assuming full knowledge of utilities (including subterranean utilities) in advance.
• A cross-appeal was also brought in relation to the question of whether commissions payable to a litigation funder could properly form part of a plaintiff’s claim for damages (which is not otherwise the subject of this note).

First instance decision

The key findings in the first instance decision which were relevant to the appeal were that:  

• To the extent delays exceeded the timeframes in the Amended IDP, this amounted to an unreasonable interference with the respondents’ enjoyment of their property.
• The interference was substantial and unreasonable, and therefore constituted actionable nuisance.
• The primary judge rejected TfNSW’s submission that it had exercised reasonable care in the planning process with the consequence that there had been no unreasonable interference.

Appeal upheld on the basis that that the IDP and Amended IDP were not reasonable estimates of time

TfNSW raised 11 grounds of appeal. The appeal was upheld on the basis of the first ground, which challenged the primary judge’s finding that the respondents suffered an interference which was both substantial and unreasonable.

In particular, TfNSW challenged the factual findings that the IDP and Amended IDP were reasonable estimates of construction timeframes.

The Court of Appeal found that:

• The IDP was not a reasonable estimate of timeframes, because it made no allowance for factors such as inclement weather, discovery of unknown utilities, or other contingencies.
• While the Amended IDP extended timeframes to account for various contingencies, it assumed that no construction would commence until there was complete knowledge of the sub-surface utilities along the route.
• The respondents had not established whether it was possible to reach that state of knowledge with respect to sub-surface utilities (noting that there were utilities every few metres along the route), and whether the time required to reach that state of knowledge might also constitute a substantial interference.
• The respondents had not established that occupation of the “fee zones” for longer than was provided for in the Amended IDP would give rise to nuisance.

The Court ultimately found that “[i]t cannot be the law that construction authorised by statute becomes actionable nuisance if it takes a month or two months or three months longer than scheduled”.

All other grounds of appeal were rejected

The Court of Appeal rejected the remaining grounds of appeal, finding that:

• The primary judge did not err in finding that TfNSW did not exercise reasonable care: at [98]-[106].
• The primary judge did not fail to give adequate reasons, and did not err in finding that the unknown utilities were a substantial contributor to delay of the SLR: at [107]-[114].
• The court also discussed the relevance of whether a use is “common and ordinary”, as opposed to “exceptional” to determining whether an interference is unreasonable: at [115]-[126]. The court held that the primary judge did not err in finding that the use of the fee zones was exceptional.
• There was no error in finding that the delay was not an inevitable result of exercising its statutory authority: at [127]-[134].
• TfNSW’s grounds of appeal regarding the exercise of reasonable care and who bore the onus of proving that care was taken did not arise (and if they did, were not made out): at [135]-[153].
• TfNSW’s ground of appeal in relation to the assessment of damages did not arise: at [154]-[160].
• The primary judge did not err in holding that section 43A of the Civil Liability Act did not apply. Section 43A operates to attenuate the standard of care required to be proved when establishing civil liability in tort, but it is no part of a claim for nuisance to show that the defendant failed to take reasonable care: at [161]-[181].

The Court of Appeal decision can be found here: Transport for NSW v Hunt Leather Pty Ltd; Hunt Leather Pty Ltd v Transport for NSW [2024] NSWCA 227.

If you would like to understand what this case means for you, please do not hesitate to get in touch.