Hunt Leather Pty Ltd v Transport for NSW

Case •

[2023] NSWSC 840

•

19 July 2023

No judgment structure available for this case.

Supreme Court


New South Wales

  • Summary available
  • Amendment notes
Medium Neutral Citation: Hunt Leather Pty Ltd v Transport for NSW [2023] NSWSC 840
Hearing dates:

7, 8, 9, 10, 11, 14, 15, 16, 17, 18, 21, 22, 23, 24, 25, 28, 29, 30 November 2022

1, 6, 7, 8, 9, 12 and 13 December 2022
Date of orders: 19 July 2023
Decision date: 19 July 2023
Jurisdiction:Common Law
Before: Cavanagh J
Decision:

See paragraphs [1138]-[1139].

Catchwords:

TORTS — Nuisance – representative proceedings brought against a State entity – class action – where plaintiffs claim that their properties were affected by the construction of the Sydney Light Rail for extensive periods

TORTS — Nuisance — private nuisance – elements – relevance of “common and ordinary” use of land – whether interference with plaintiffs’ property was substantial and unreasonable – whether interference was foreseeable – whether it is necessary to establish that the defendant failed to take care – whether s 43A of the Civil Liability Act 2002 (NSW) applies – whether defendant can rely on a defence of statutory authority – whether the defendant is liable for the nuisance – period of the nuisance – damages – loss of profit

TORTS – Public nuisance – elements – private action for public nuisance – where plaintiffs claim mental anguish and economic loss – whether plaintiffs suffered substantial damage over and above that suffered in common with other members of the public affected by the nuisance – s 141 of the Roads Act 1993 (NSW)

CIVIL PROCEDURE — Representative proceedings — Group members — consideration of common questions agreed upon by the parties – procedure for identifying group members and assessing their loss

Legislation Cited:

Civil Liability Act 2002 (NSW), Pt 1A, Pt 5, ss 5, 5A, 5B, 41, 42, 43, 43A

Civil Liability Act 2002 (WA)

Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW)

Civil Procedure Act 2005 (NSW), Pt 10

Crown Proceedings Act 1988 (NSW), s 5(2)

Environmental Planning and Assessment Act 1979 (NSW), Pt 5.1, ss 115ZA, 115ZB (superseded)

Interpretation Act 1987 (NSW), ss 13A(1)(a), 50(1)(c)

Roads Act 1993 (NSW), Pt 9, Div 3, ss 138(1), 141, 144C

Statute Law (Miscellaneous Provisions) Act 2020 (NSW)

Transport Administration Act 1988 (NSW), Pt 9, Div 2A, ss 3, 3C, 3D, 3E, s 104N, s 104O, Sch 1, cl 9

Transport Administration (General) Amendment (Light Rail) Regulation 2015 (NSW), Sch 1, Pt 7A, cl 82A

Cases Cited:

Attorney-General v PYA Quarries Ltd (1957) 2 QB 169

Bamford v Turnley (1862) 3 B & S 66; [1862] 1 WLUK 22

Bankstown City Council v Zraika; Roads and Maritime Services v Zraika (2016) 94 NSWLR 159; [2016] NSWCA 51

Barr v Biffa Waste Services Ltd [2012] 3 All ER 380; [2013] QB 455

Blatch v Archer (1774) 1 Cowp 63; (1774) 98 ER 969

Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520; [1994] HCA 13

Butler Market Gardens Pty Ltd v GG & PM Burrell Pty Ltd [2018] VSC 768

Cambridge Water Co v Eastern Counties Leather plc [1994] 2 AC 264

Curtis v Harden Shire Council (2014) 88 NSWLR 10; [2014] NSWCA 314

Dansar Pty Ltd v Byron Shire Council (2014) 89 NSWLR 1

Deepcliffe Pty Ltd & Anor v The Council of the City of Gold Coast & Anor (2000) 111 LGERA 140; [2000] QSC 411

Della Franca v Lorenzato; Burwood Council v Lorenzetti [2021] NSWCA 321

Elston v Dore (1982) 149 CLR 480; [1982] HCA 71

Fearn and others v Board of Trustees of the Tate Gallery [2023] UKSC 4

Gales Holdings Pty Ltd v Tweed Shire Council [2011] NSWSC 1128

Gales Holdings Pty Ltd v Tweed Shire Council (2013) 85 NSWLR 514; [2013] NSWCA 382

Hargrave v Goldman (1963) 110 CLR 40; [1963] HCA 56

Hunter v Canary Wharf Ltd & London Docklands Development Corporation [1997] AC 655

Jalla and another v Shell International Trading and Shipping Co Ltd and another [2023] UKSC 16

Manchester Corporation v Farnworth [1930] AC 171

McKenna v Hunter & New England Local Health District [2013] NSWCA 476

Motorcycling Events Group Australia Pty Ltd v Kelly (2013) 303 ALR 583; [2013] NSWCA 361

Onus v Telstra Corporation Limited [2011] NSWSC 33

Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty Ltd [1967] AC 617

Patsalis v New South Wales (2012) 81 NSWLR 742; [2012] NSWCA 307

Paul v Cooke (2013) 85 NSWLR 167; [2013] NSWCA 311

Precision Products (NSW) Pty Ltd v Hawkesbury City Council (2008) 74 NSWLR 102; [2008] NSWCA 278

Prestage v Barrett, Thorne v Barrett, Howells v Barrett [2021] TASSC 27

Queensland Bulk Water Supply Authority (t/as Seqwater) v Rodriguez & Sons Pty Ltd (2021) 393 ALR 162; [2021] NSWCA 206

Rickard v Allianz Australia Insurance Ltd (2009) 54 MVR 214; [2009] NSWSC 1115

Riverman Orchards Pty Ltd v Hayden [2017] VSC 379

Roads & Traffic Authority of NSW v Refrigerated Roadways Pty Ltd (2009) 77 NSWLR 360; [2009] NSWCA 263

Robson v Leischke (2008) 72 NSWLR 98; [2008] NSWLEC 152

Rylands v Fletcher (1868) LR 3 HL 330

Sedleigh-Denfield v O’Callaghan [1940] AC 880

Southern Properties (WA) Pty Ltd v Executive Director of the Department of Conservation and Land Management (2012) 42 WAR 287; [2012] WASCA 79

Sturgess v Bridgman (1879) 11 Ch D 852

Sydney Water Corporationv Turano (2009) 239 CLR 51; [2009] HCA 42

Woodhouse v Fitzgerald (2021) 104 NSWLR 475; [2021] NSWCA 54

Wyong Shire Council v Shirt (1980) 146 CLR 40

Texts Cited:

Aronson, Mark, “Government Liability in Negligence” (2008) 32(1) Melbourne University Law Review 44

Clerk, John Frederic and William Harry Barber Lindsell, Clerk & Lindsell on Torts, Anthony M Dugdale and Michael A Jones (eds) (Sweet & Maxwell, London, 19th ed, 2006)

Fleming, John, Fleming’s the Law of Torts, Carolyn Sappideen and Prue Vines (eds) (Thomson Reuters, 10th ed, 2011)

Law of Negligence Review Panel, Review of the Law of Negligence: Final Report, (Canberra, AGPS, 2002)

Winfield, PH, Winfield on Tort: A textbook on the law of tort, T Ellis Lewis (ed) (Sweet & Maxwell London, 6th ed, 1954)

Category:Principal judgment
Parties:

Hunt Leather Pty Ltd (First Plaintiff)
Sophie Hunt (Second Plaintiff)
Ancio Investments Pty Ltd (Third Plaintiff)
Nicholas Zisti (Fourth Plaintiff)

Transport for NSW (Defendant)
Representation:

Counsel:
A Bannon SC (with L Shipway and A Hochroth) (Plaintiffs)

D Miller SC (with N Owens SC, N Simpson, D Macfarlane and R Thrift) (Defendant)

Solicitors:
Mitry Lawyers (Plaintiffs)
Lander & Rogers (Defendant)
File Number(s): 2018/263841
Publication restriction: None

JUDGMENT

INTRODUCTION

The Sydney Light Rail

The lead plaintiffs’ businesses

The Hunt Leather Strand Arcade store

The Hunt Leather QVB store

Mr Zisti’s restaurant

THE POSITION OF THE PARTIES

The pleadings

The defence

The plaintiffs’ case in closing submissions

Case A

Case B

Case C

The defendant’s case in closing submissions

CONSIDERATION OF EVIDENCE AND THE PLAINTIFFS’ COMPLAINTS

The utilities risk

The planning and development of the SLR

Initial planning

Entry into Development Agreement with City of Sydney Council

Further consideration of utilities risk

The occupation fee regime

Publication of the Request for Proposal

Entry into Early Works contract

Further assessment of risks

Conclusions from planning documents

The way in which the SLR Project was intended to be delivered

The Project Deed

The Contract Summary

The fee zone strategy

Announcement of the construction schedule

Lay evidence as to interference with businesses

Ms Hunt’s evidence

Steven Foulstone’s evidence

Mr Zisti’s evidence

Expert evidence

The utilities experts

Mr Szmalko

Challenges to Mr Szmalko’s evidence

Mr Lewcock

Cross-examination of Mr Lewcock

Mr Sampson

Summary of findings on utilities experts

Mr Hardman

Programming expert evidence

Mr Griffith

Mr McIntyre

Joint programming evidence

Summary of programming evidence

Project scope changes

Modification 25

Modification 33B

LEGAL PRINCIPLES

The tort of nuisance

The meaning of unreasonable in nuisance

Common and ordinary

Was the use of the land out of the ordinary or uncommon?

The concept of fault

The application of the Civil Liability Act

Part 1A of the CLA

Part 5 of the CLA

SECTION 43a OF THE CIVIL LIABILITY ACT

Parties’ submissions on special statutory power

Consideration of special statutory power

Was the defendant’s conduct in planning and procuring the SLR unreasonable in the sense used in s 43A of the CLA?

CONSIDERATION OF FURTHER ISSUES

What actually occurred?

What caused the prolonged occupation in the fee zones?

A different delivery model?

Allocation of risk

Matters raised by the defendant as part of its defence

Public benefit

Did the defendant fail to take care?

Defence of statutory authority

THE LEVEL OF INTERFERENCE

Was the interference with the plaintiffs’ businesses substantial?

The Hunt Leather Strand Arcade store

After December 2017

The Hunt Leather QVB store

Mr Zisti’s restaurant

Was the interference with the plaintiffs’ businesses substantial and unreasonable?

Was the level of interference foreseeable on the part of the defendant?

What is the period of the nuisance?

IS THE DEFENDANT LIABLE FOR THE NUISANCE?

PUBLIC NUISANCE

DAMAGES

Hunt Leather

The retail experts

Expert accountants

Mr Zisti’s restaurant

Ex gratia payments

COMMON QUESTIONS

CONCLUSION

SUMMARY OF JUDGMENT

JUDGMENT

INTRODUCTION

  1. Attached to this judgment is a summary which was delivered orally on 19 July 2023 for the benefit of the parties and those members of the community who are interested in these proceedings. The summary contains extracts from this judgment. All of the passages in the summary are to be found in the judgment.

  2. These proceedings are representative proceedings pursuant to Part 10 of the Civil Procedure Act 2005 (NSW) (“CPA”). The proceedings are pursued on behalf of the persons said to be affected by the construction and development of the Sydney Light Rail (“SLR”) between Circular Quay and Randwick/Kingsford in Sydney.

  3. As set out in paragraph 1 of the third further amended statement of claim filed on 26 October 2022, the proceedings are pursued on behalf of all persons:

  1. who or which:

  1. hold, or have held, an interest in land in the vicinity of the SLR; and

  2. have suffered loss or damage by reason of the defendant’s interference with their enjoyment of their interest in land (“the Private Nuisance Group Members”); and/or

  1. who or which have suffered a loss or damage as pleaded by reason of the defendant’s interference with public land through the carrying out of the SLR project (“the Public Nuisance Group Members”); and

  1. All of the persons who may come within the descriptions set out in paragraphs (a) and (b) are said to be “Group Members”.

  2. The defendant is a New South Wales Government agency constituted as a statutory corporation pursuant to s 3C of the Transport Administration Act 1988 (NSW) (“TA Act”) and, by operation of s 13A(1)(a) of the Interpretation Act 1987 (NSW) (“Interpretation Act”), is a statutory body representing the Crown pursuable by way of s 50(1)(c) of the Interpretation Act and/or s 5(2) of the Crown Proceedings Act 1988 (NSW).

  3. The defendant is the NSW Government agency which planned, designed and managed the processes leading towards the construction of the SLR, although it did not actually undertake the construction work.

  4. The powers and functions of the defendant are governed by the TA Act. As set out in s 3D of the TA Act, an objective of the defendant is “to plan for a transport system that meets the needs and expectations of the public”.

  5. The general functions of the defendant are set out in s 3E and Schedule 1 of the TA Act. These include:

  1. transport planning and policy, including for integrated rail networks, road networks, maritime operations and maritime transport and land use strategies for metropolitan and regional areas;

  2. the administration of the allocation of public funding for the transport sector; and

  3. the planning, oversight and delivery of transport infrastructure.

  1. Division 2A of Part 9 of the TA Act contains “special provisions relating to light rail”. These provisions include s 104O, pursuant to which the defendant may develop and operate light rail systems or facilitate their development and operation by other persons.

  2. The defendant says that it was exercising the powers conferred on it by s 104O when it was involved in the planning, development and design of the SLR prior to the commencement of the construction work.

  3. There are four lead plaintiffs, being:

  1. Hunt Leather Pty Ltd (“Hunt Leather”), which operates a retail leather goods business;

  2. Ms Sophie Hunt, who has been the Chief Executive Officer of Hunt Leather since approximately 2003;

  3. Ancio Investments Pty Ltd (“Ancio”), being the trustee of the unit trust known as the Ancio Unit Trust, which between May 2009 and April 2019 operated a restaurant business on Anzac Parade in Kensington; and

  4. Nicholas Zisti, who was the sole director of Ancio and operated and who had responsibility for the restaurant.

  1. After a short delay and some preliminary arguments, the hearing commenced on 7 November 2022 (an earlier hearing date had been vacated).

  2. The hearing concluded on 13 December 2022.

  3. The hearing which took place during that period was to determine:

  1. the liability of the defendant to the lead plaintiffs;

  2. the amount of damages (if any) which would be payable by the defendant to the lead plaintiffs; and

  3. agreed common questions.

  1. Although the legal representatives for the plaintiffs estimate that there may be thousands of people who fall within the class defined as Group Members, the initial hearing was only in respect of the lead plaintiffs. However, like all class actions, the purpose of the hearing was also to determine common questions which may impact on the entitlement of other Group Members to any damages.

  2. In this matter, there are particular difficulties with the potential common questions as, unlike some class actions where there may be a single cause of loss sustained by all members of the class, the causes of any loss suffered by Group Members are in dispute and may vary.

  3. Fundamentally, that is because there may be substantial differences between the impact that the construction of the SLR had on landholders and business owners at certain points along the route compared to others. This was demonstrated in the initial hearing because Hunt Leather occupied stores in what is described as Fee Zones 5 and 6 on George Street in the Sydney Central Business District (“CBD”), whereas Mr Zisti’s restaurant operated in Fee Zone 29 on Anzac Parade in Kensington.

  4. There may be some commonality in terms of what occurred outside Mr Zisti’s restaurant and the Hunt Leather stores but there are also some significant differences.

The Sydney Light Rail

  1. The SLR is well-known to Sydneysiders. It constituted a major infrastructure development by the NSW Government. It commences at Circular Quay and runs through the heart of Sydney via one of Sydney’s main streets, George Street. It then proceeds up through dense and busy areas such as Surry Hills and along one of Sydney’s south-eastern thoroughfares, Anzac Parade, before branching off into two lanes, one from Centennial Park to Randwick along Alison Road and the other from Moore Park to Kingsford (via the University of New South Wales) along Anzac Parade.

  2. A map showing the SLR route is below:

  1. The main planning of the SLR commenced in 2012. The defendant determined that the SLR would be built and operated through a public and private partnership (“PPP”) with the entity appointed by the defendant being responsible for both the construction and the operation of the SLR for a period of 15 years. Under a PPP, the State enters into a project deed pursuant to which the other party in the partnership agrees to finance, design, construct commission, operate and maintain the asset which is built for a specified term (in this case, 15 years).

  2. The timetable proposed by the defendant allowed for a period of approximately two years of planning and development, with entry into a project deed in December 2014. In fact, this is what occurred. After significant investigation and planning, the defendant called for proposals. It selected a proponent (being Connecting Sydney, known as “CSY”), negotiated and then entered into a project deed on 17 December 2014 (“Project Deed”). CSY nominated a number of ALTRAC companies as the entities through which it wished to contract.

  3. The term OpCo is used in the Project Deed to identify the other party to the Project Deed i.e. ALTRAC. I will use OpCo and ALTRAC interchangeably in this judgment. At the same time as it entered into the Project Deed, ALTRAC entered into a design and construct contract (“the D&C contract”) with its nominated contractor, a joint venture between Acciona and Alstom (“the D&C contractor”). The O&M contractor was Transdev. In reality, the parties standing behind CSY were the same parties behind OpCo and the D&C contractor.

  4. The terms of the D&C contract were similar to the terms of the Project Deed. Obligations and entitlements imposed on OpCo through the Project Deed were thus passed down the line to the D&C contractor. The project was due to be completed by March 2019. It was supposed to be completed in stages or according to “fee zones”, thereby ensuring minimal disruption to businesses along the route. As it turned out, it was not completed until March 2020. On any view, the project was beset with problems and delays. The defendant and the D&C contractor fell into dispute, with the D&C contractor claiming a significant additional sum from the defendant.

  5. I am not privy to the details of that dispute, as there was only limited evidence about it adduced in these proceedings. I am told that the defendant ultimately paid the D&C contractor an additional $550 million.

  6. The D&C contractor was originally a party to these proceedings but it is no longer a party. I do not know why it was originally joined to the proceedings and why it is no longer a party, other than that there has been a settlement, which must in some way be referable to that payment.

The lead plaintiffs’ businesses

The Hunt Leather Strand Arcade store

  1. Hunt Leather was established in 1975 by John and Elizabeth Hunt. In 2015, it operated ten stores throughout Australia, some of which were branded stores selling only international brands, such as Longchamp and Rimowa.

  2. Much of the evidence was directed towards the interference with the Hunt Leather Strand Arcade store and the losses sustained by Hunt Leather arising from that interference. Whilst there was also evidence relating to the Hunt Leather store in the Queen Victoria Building (“QVB”) and, of course, the impact on Mr Zisti’s restaurant, the focus of the evidence was very much on how the SLR construction activities impacted the operation of the Hunt Leather Strand Arcade store. This may be because, on one view, the impact on the Hunt Leather Strand Arcade store was both obvious and direct.

  3. When compared to some of the other fee zones (in particular, Fee Zone 29), the Sydney CBD is densely populated by buildings, both new and old, retail shops, apartments, department stores, restaurants and food stores. Further, perhaps another reason why the focus of some of the evidence was on Fee Zone 5 and the Strand Arcade store was because only at the Hunt Leather Strand Arcade store (and not the QVB store) was the opening of the premises on the footpath adjacent to hoardings that were erected when the construction activity started.

  4. Hunt Leather had been operating its Strand Arcade store since 12 April 2013. Its flagship store was previously in the MLC Centre in Martin Place, which it had operated since 1975. The Strand Arcade is a prestigious arcade in Sydney running between George Street and Pitt Street Mall. The Strand Arcade is replete with boutique stores, luxury stores, original specialty stores and food stores.

  5. The Hunt Leather Strand Arcade store occupied the north-western corner of the arcade at ground level, with large doors opening onto George Street and also an internal entrance on the arcade side.

  6. The Strand Arcade store produced Hunt Leather’s highest turnover of anywhere in Australia. It sold Hunt Leather goods as well as branded goods, such as Longchamp products. It sold a variety of products such as briefcases, compendiums and folios.

  1. According to Ms Hunt, business had been increasing in the Strand Arcade. At least to a certain extent, this is reflected in the increase in turnover in the Strand Arcade store. The turnover in the 2014-15 financial year was 65% higher than it was for the 2013-14 financial year.

  2. The Hunt Leather Strand Arcade store remained open throughout the whole period of the SLR construction and remained open until, like all businesses, it was impacted by the COVID-19 pandemic. In 2021, Hunt Leather moved from its George Street-facing store to a space further inside the Strand Arcade, where it now continues to operate.

The Hunt Leather QVB store

  1. Hunt Leather also operated a retail store in the QVB in Fee Zone 6. Fee Zone 6 covered George Street between Market Street and Park Street. The QVB is a large, grand building of important historical significance which runs between Market Street and Sydney Town Hall. Like the Strand Arcade, the QVB houses a range of shops selling luxury goods, food, clothes and accessories (amongst other things).

  2. The lower ground level of the QVB forms part of the pedestrian walkway which runs from underneath the Myer building on the corner of Market and George Streets to Town Hall train station. Town Hall station is situated underneath Sydney Town Hall, which is across the street from the southern end of the QVB.

  3. Hunt Leather operated a Longchamp branded store in the QVB. That store closed in around November 2018. According to Ms Hunt, its closure was forced due to the inability of Hunt Leather to continue to support it, both because of the impact of the SLR construction activities in Fee Zone 6 and because Hunt Leather could no longer fund the QVB store using the profits of the Strand Arcade store.

  4. Longchamp is an international luxury goods brand. It is a French-owned company. Longchamp entered into an agreement with Hunt Leather to enable Hunt Leather to operate three stores in Australia selling only Longchamp goods. The agreement with Longchamp was not an exclusive agreement, in the sense that Longchamp bags and accessories were also sold in other stores in Sydney.

  5. The QVB store was on the ground level of the QVB. The entrance to the store was inside the QVB but it had a window or shopfront which faced George Street.

Mr Zisti’s restaurant

  1. Mr Zisti’s restaurant was situated on the eastern side of Anzac Parade at 1/240-268 Anzac Parade, Kensington (in Fee Zone 29). Mr Zisti operated his business through a corporate structure, as follows:

  1. from about May 2009 until April 2019, Mr Zisti was the sole director of Ancio and operated a restaurant business;

  2. from about May 2009 to July 2011, Ancio operated the restaurant premises as a Thai restaurant known as “In the Mood for Thai”. At that time, Mr Zisti worked in the business;

  3. from about 4 July 2011 until July 2018, another Thai restaurant (“Khing Thai”) operated from the restaurant premises;

  4. from about June 2013 to June 2014, Ancio operated a coffee cart outside the restaurant premises known as Giddy Up Expresso Bar (“Giddy Up”); and

  5. from about August 2018 to April 2019, an Italian restaurant (“Sugo Pasta Bar”) operated from the restaurant premises. During this time, Mr Zisti had a hands-on role in managing the business and operating the front-of-house.

  1. As his financial records show, Mr Zisti had been developing his business over the five years prior to the commencement of construction of the SLR. In the year before the construction commenced, his profits had reached better than ever levels at $149,000.

  2. In 2018, Mr Zisti closed his Thai restaurant due to low sales and opened a pasta bar instead. He says that he did so because of the impact of the SLR construction works. The pasta bar was not a success. He did not renew the lease in 2019; he says this was because he was not making any money from the venture.

  3. There is no dispute that the SLR construction commenced in Fee Zone 29 on 7 May 2016. Occupation of Anzac Parade in Fee Zone 29 ended on 26 June 2019. Mr Zisti claims that the restaurant was impacted throughout this whole period, such that his entitlement to losses amounts to the diminution of sales or the net profit that he would have generated but for the SLR construction activities.

THE POSITION OF THE PARTIES

  1. There is no claim that the noise and disruption caused by the SLR, once operational, constitutes a nuisance. Rather, the acts constituting the nuisance are said to have occurred during the construction of the SLR.

  2. Further, the plaintiffs do not complain about the conduct of the defendant during the period when construction was being undertaken (as the defendant did not undertake the construction work). The conduct of the defendant of which the plaintiffs complain is the conduct prior to construction, during the design, planning and contract negotiation phases of the project.

  3. This judgment will necessarily involve a consideration of complex legal issues and the interpretation of many construction-related documents, including an extensive project deed.

  4. As noted, the plaintiffs include the four lead plaintiffs. As lead plaintiffs, their names appear on the pleadings.

  5. The plaintiffs pursue only one cause of action. It is a cause of action in nuisance, both private and public. Private nuisance is a different legal concept from public nuisance but, in some respects, it gives rise to a consideration of the same principles. Nuisance is a tortious remedy. It is different from negligence, albeit there is a dispute between the parties about the extent to which the plaintiffs can establish nuisance without establishing some failure to take care on the part of the defendant.

  6. The essential proposition advanced by the plaintiffs is that during the construction of the SLR, the members of the class were subject to a nuisance in the sense that their rights, enjoyment and occupation of their properties were subject to an interference arising from the construction activities which was substantial and, if it is necessary to so find, unreasonable. As may be expected, the law does not merely permit any home or business owner to claim damages from a party who in some way created an interference by way of construction activities. To do so would impede the ability and entitlement of both private citizens and the government to undertake ordinary construction work, such as building and roadworks.

  7. In order to succeed in an action such as this, it will be necessary for the plaintiffs to establish that there was interference with their land (or the land that they occupied) at such a level as to constitute a legally actionable nuisance and, further, that the defendant should be liable for that nuisance.

  8. In this case, the plaintiffs submit that the nuisance was constituted both by the nature of the activities (which involved heavy construction machinery, vibrations, noise and dust, the presence of hoardings and the general restriction of pedestrian and vehicular movement) and the length of time that the work was being conducted outside their respective premises.

  9. Issues arise as to whether nuisance must necessarily involve construction activities being performed adjacent to the premises, or whether nuisance can be constituted by (for example):

  1. the erection of barricades on a roadway some distance from a shop, which might deter potential customers from walking past the shop;

  2. the placement of hoardings and barricades in the middle of the road when the entrance to the shop is not on the road but inside an adjacent building (i.e. inside the QVB); or

  3. the blockage by hoardings of the line of sight of a shopfront window from the other side of the road.

  1. The plaintiffs say that although the defendant did not actually do the physical construction work, it is personally responsible for the nuisance because it was the statutory authority which developed, procured, planned and organised the work. Further, they say that the nuisance arose because of the defendant’s failures in the planning, design and contracting phase (up to December 2014).

  2. The plaintiffs submit that if the defendant is liable in nuisance, then it is liable to pay damages to the lead plaintiffs.

  3. Damages are compensatory. If their claim is successful, the plaintiffs are entitled to be put back into the position they would have been in if not for the tortious conduct. That necessarily involves a consideration of whether and how the activities giving rise to the nuisance caused the lead plaintiffs to suffer loss (including loss of amenity).

  4. Ms Hunt and Mr Zisti also claim personal losses in the nature of damages for inconvenience and hurt arising from the public nuisance.

  5. The defendant’s response to these claims is to:

  1. deny that there has been any nuisance, whether private or public. The defendant submits that the plaintiffs have not established the elements of the tort of nuisance. They say this for a number of reasons, including that, whilst not disputing the essential proposition that noise, dust and construction work would and did have an impact on adjoining businesses:

  1. the interference was not substantial and unreasonable, highlighting that, on the defendant’s case, it is necessary for the plaintiffs to establish that the defendant failed to take reasonable care (as those terms are understood and informed, having regard to the relevant case law); and

  2. it could not be liable in nuisance because the interference was an inevitable consequence of the SLR construction;

  1. rely on s 43A of the Civil Liability Act 2002 (NSW) (“CLA”). That is, the defendant says that it has statutory protection in respect of this type of action against it; and

  2. rely generally on its role as a statutory corporation and, in particular, s 141 of the Roads Act 1993 (NSW) (“Roads Act”) as a defence to the alleged public nuisance.

  1. The case is conceptually difficult because the plaintiffs seek to rely on the way in which the construction activities were undertaken during the period of construction work for the purposes of establishing the nuisance, but they only seek to rely on their criticisms of the defendant’s conduct for the period up until the Project Deed was entered into in December 2014 (before the construction actually started). In these circumstances, there has been limited exploration of what actually happened during the course of the construction. Indeed, the defendant did not adduce any evidence of what actually happened during the SLR construction. The plaintiffs adduced evidence from one of their experts (Mr Mark Griffith) as to the cause of the prolonged periods of construction in the individual fee zones.

  2. The amount of loss said to have been caused by the nuisance is also in dispute. This is because, on the defendant’s case, there were other factors impacting the profitability of the Hunt Leather business and Mr Zisti’s restaurant, aside from the SLR construction. An example in respect of Hunt Leather is the increased competition in the luxury goods market. An example in respect of Mr Zisti's restaurant is the change in parking restrictions on the street outside the restaurant.

  3. The case was prepared and presented in a thorough, competent and efficient manner by the parties. However, the evidence is extensive and the issues are complex. The combined submissions of the parties comprised over 1000 pages. The volume of material relied upon and the detail to which the parties descended in their efforts to refute the opposing case was extraordinary. The expert reports, when combined, amount to more than ten volumes of material. At times, it felt like this case was more a construction dispute than a claim in nuisance.

  4. At least according to the parties, there could be little doubt as to the correctness of their positions. Alas, the outcome of litigation does not permit a draw.

  5. It is important to observe that there are really two questions which arise in this hearing, as far as the plaintiffs are concerned:

  1. subject to any defences available to the defendant, was the interference to the lead plaintiffs’ properties such as to constitute an actionable nuisance? and

  2. should the defendant be liable for such a nuisance?

  1. I should say that there is some merit in the defendant’s suggestion that this is not a particularly apt vehicle for a class action. Whilst it is possible to answer some common questions, as will be apparent from consideration of the lead plaintiffs’ properties and businesses and the interference said to have been caused by the SLR construction, the nature and extent of interference with properties along the SLR route would vary significantly.

  2. For example, it does not seem to me that the following circumstances in and of themselves (that is, without some other matters or factors giving rise to interference with the use and enjoyment of the property), would be sufficient to be an actionable nuisance:

  1. the permanent closure of a section of George Street to vehicular traffic;

  2. the changing of parking restrictions; and

  3. the fact, if established, that less vehicles or people might have travelled along the road at any particular point.

  1. Questions of proof loom large for a number of different reasons.

  2. At the very beginning of the case, Mr Miller, on behalf of the defendant, submitted that the evidence adduced by the plaintiffs would not satisfy the Court of the fundamental proposition advanced by them, being that the defendant’s failures in planning and procurement caused a substantial delay and prolongation of the construction activities. Even though the occupation of individual fee zones was prolonged for periods of two or three times of what was initially anticipated, he submitted that this case would not provide an answer to members of the community as to why that occurred.

  3. Mr Miller submitted that it was not up to the defendant to prove why the construction activities took so long, such that the defendant would not be adducing evidence to explain the delay. Indeed, the defendant’s programming expert, Mr McIntyre, did not address the cause of the delay in his evidence, albeit he was critical of the methodology adopted by the plaintiffs’ expert, Mr Griffith.

  4. At the very end of the case, I again asked Mr Miller what caused the delay, if what was asserted by the plaintiffs did not. He gave essentially the same answer, being that the plaintiffs had not proved what caused the delay and it was not up to the defendant to establish the reason for the delay. As Mr Owens added after Mr Miller, there could be many causes, particularly in relation to the design decisions made by the D&C contractor.

  5. As I perhaps indicated during exchanges, I found it a little surprising that at the end of a case involving a government agency and thousands of members of the community who were affected by prolonged construction activities, the Court would be left uninformed about the cause of such a delay.

  6. In assessing the sufficiency of evidence, it is permissible to draw inferences and, of course, have regard to the power of each party to adduce evidence. The principle in Blatch v Archer (1774) 1 Cowp 63; (1774) 98 ER 969 applies. That is, evidence is to be weighed according to the capacity of a party to adduce it. One of the features of this case is that the parties obviously made forensic decisions as to the evidence which would be adduced. The plaintiffs prepared expert evidence on defined issues. The defendant opted to respond to some (but not all) of those opinions and did not seek to explain through additional evidence other issues, such as causation.

  7. Further, if a failure to take care is relevant, the parties are at odds about who bears the onus of establishing failure to take care. The plaintiffs’ position is that the exercise of reasonable care is not relevant to their primary cases. If it is relevant, the defendant bears the onus of establishing that it took care. The plaintiffs have not pleaded the existence or breach of any duty of care, although they refer to casually significant failures by the defendant.

  8. There is an issue as to who bears the onus of proof in establishing that the interference with the plaintiffs’ use of their land was inevitable in circumstances in which the defendant maintains that it was a statutory authority acting in accordance with the authority given to it.

  9. Finally, the plaintiffs maintain that the s 141 Roads Act defence to the claim in public nuisance is not maintainable, unless the defendant establishes that it complied with the conditions of the consent granted by the Roads and Maritime Services (“RMS”) on 2 October 2015. The plaintiffs nominate some conditions with which they say the defendant did not comply but then assert that it is up to the defendant to prove that it did so comply. The defendant asserts that the onus would be on the plaintiffs to prove that it did not comply with the conditions stipulated by the RMS.

  10. Generally, it would be preferable if cases were not decided on onus of proof issues. However, having regard to the way in which this case was pursued and defended, who proved what may be important.

The pleadings

  1. During the hearing, there was considerable focus on the pleaded case, particularly by the defendant. The plaintiffs perhaps took a broader approach to the pleadings.

  2. I granted leave to the plaintiffs to file a third further amended statement of claim on 24 October 2022. The final version of the statement of claim was filed on 26 October 2022. On 24 October 2022, I also granted leave to the plaintiffs to file a further amended reply. The final version of the defence was filed on 7 November 2022. The final version of the reply relied upon by the plaintiffs was filed on 17 November 2022.

  3. It is not necessary to consider earlier versions of the pleadings. I will thus refer to the third further amended statement of claim as “the Statement of Claim”, the amended defence as “the Defence” and the further amended reply as “the Reply”.

  4. The pleaded background is not in dispute. The plaintiffs do not plead the existence of a duty of care, the risk of harm or any breach of duty. Indeed, in the Reply, the plaintiffs plead that “these proceedings do not concern whether the Defendant had a duty of care or breached its duty of care.”

  5. Having set out the background to the commencement of the construction activities, the plaintiffs plead that there were delays in the Civil Works caused by the defendant. It is paragraphs 12(a)-(f) and 13-14(d) of the Statement of Claim which give rise to the central factual dispute in these proceedings.

  6. I summarise those paragraphs as follows:

  1. in March and May 2015, the D&C contractor advised the defendant that it had received guidelines from Ausgrid as to its requirements for the treatment of utilities along the SLR route;

  2. the Ausgrid guidelines differed significantly from the approach to utilities, which had been developed and agreed between the defendant and the D&C contractor (as recorded in Schedule F8 to the relevant project documentation);

  3. the new Ausgrid guidelines resulted in a substantial change to the scope of the project, leading to an estimated delay of over two years and four months and an estimated additional cost of around $426 million in civil construction works;

  4. a substantial cause of the Ausgrid scope changes was the defendant’s failure to finalise agreements with stakeholders, such as utility providers (including Ausgrid) and local councils, regarding the treatment of utility assets prior to entry into the Project Deed;

  5. during the course of the civil construction works, the defendant issued the D&C contractor with approximately 60 directions to change the scope of work (“project scope changes”);

  6. a substantial cause of the project scope changes was the failure by the defendant to effectively plan and procure the project between 2011 and 2014;

  7. during the course of the civil construction works, the D&C contractor encountered many unknown utilities which had the effect of prolonging the occupation of Fee Zones 5, 6 and 29 (“utilities prolongation”);

  1. the substantial cause of the utilities prolongation was that the defendant had entered into the Project Deed on terms that allowed the D&C contractor relief under the Project Deed and allocated no risk in respect of unknown utilities to the D&C contractor, in circumstances where unknown utilities were likely to be encountered (“the contracting conduct”);

  2. after the commencement of the construction, the defendant made repeated public statements to the effect that the project would be completed by 2019;

  3. the delays in the completion of the project and, alternatively, the prolonged occupation of individual fee zones was caused by delays during the civil construction works phase of the project; and

  4. each of the Ausgrid scope changes, the project scope changes and the contracting conduct were a substantial cause of the Civil Works delay, which was caused by the defendant’s conduct in:

  1. failing to finalise agreements with stakeholders, such as utility providers including Ausgrid and local councils, prior to entry into the Project Deed;

  2. failing to effectively plan and procure the project between 2011 and 2014; and

  3. engaging in the contracting conduct.

  1. Further, the plaintiffs plead that:

  1. there was a substantial delay in the completion of the overall project, or a delay in the planned occupation of the individual fee zones during the undertaking of the Civil Works; and

  2. that substantial delay was caused by the defendant’s conduct prior to commencement of the Civil Works by:

  1. failing to enter into appropriate agreements prior to entry into the Project Deed; and

  2. failing to effectively plan and procure the project prior to entry into the Project Deed and, alternatively, engaging in what it pleads as the contracting conduct.

  1. The plaintiffs then plead that, through its conduct in authorising or permitting the construction of the project and/or causing the Civil Works delay, the defendant caused a substantial and unreasonable interference with the plaintiffs’ and all Group Members’ enjoyment of their respective interests in land located in the vicinity of the project.

  2. Further, the plaintiffs then plead that through the conduct to which I have referred, the defendant has caused substantial and unreasonable disruption or inconvenience to the public in the exercise of public rights (namely, by the damage to and obstruction of roadways and footpaths, as well as road closures and the direction of hoardings) (“the public nuisance”).

  3. Put simply, by their pleadings, the plaintiffs allege that there were failures in the planning and procurement phase of the SLR and that those failures led to excessive delays in the construction works, thereby giving rise to a substantial and unreasonable interference with their properties.

The defence

  1. The defendant:

  1. acknowledges that it received ALTRAC’s letter annexed to its claim on 20 May 2015, suggesting that, if the Ausgrid guidelines amounted to a direction under the D&C contract, then it claimed compensation (being an extension of time by 865 days and the sum of $423,963,512); but

  2. says that on 1 June 2015, it wrote to ALTRAC and informed it that the Ausgrid guidelines should not be treated as a formal direction issued under the Project Deed and that no such direction had been given. On 24 July 2015, ALTRAC and the D&C contractor both unconditionally withdrew their claims in respect of the Ausgrid guidelines;

  3. says that the plaintiffs’ allegations as to the cause of the Ausgrid scope changes proceed on incorrect premises. It says that the Ausgrid guidelines do not specify Ausgrid’s practice or accepted industry-wide practice for standard utility treatments, nor do they specify the utility treatments required in respect of the project. It further relies on sections of the Project Deed as to the allocation of risk between the defendant and ALTRAC;

  4. says that it only issued 52 modifications in respect of the SLR construction and, further, that the plaintiff had elected to establish liability with reference to contractual modifications, limited to only four modifications (being numbers 25, 33B, 40A and 59 in Fee Zones 5, 6 and 29), such that the plaintiffs are estopped from contending further that any other modifications constitute a failure by the defendant to factually plan and procure the project;

  5. in respect of paragraph 12(e) of the Statement of Claim, says that the plaintiffs have not identified how utilities were accounted for, nor have they identified how and for what period the civil construction works in each such fee zones were prolonged; and

  6. in respect of the contracting conduct, says that it disputes the plaintiffs’ allegations as to the terms, effects and operation of the Project Deed and, in particular, it denies that the Project Deed operated such that ALTRAC and the D&C contractor were allocated no risk in respect of unknown utilities.

  1. Essentially, the defendant denies the plaintiffs’ allegation that the Civil Works were delayed or that the delay was caused by and for the reasons identified by the plaintiffs.

  2. The defendant then denies the allegations of nuisance, specifically:

  1. it relies on ex gratia deeds signed by the plaintiffs, pursuant to which the defendant made payments of ex gratia financial assistance to the plaintiffs (the defendant does not say that the receipt of the ex gratia payments by the plaintiffs preclude the plaintiffs from pursuing these proceedings, but they seek credit for such payments); and

  2. in respect of the public nuisance claim, the defendant says that it has not interfered with the public’s right of passage on public roads and the claim for public nuisance should fail but, in any event, the work was done pursuant to an approval issued by the RMS. The defendant says that in carrying out, authorising or permitting the works subject to the RMS approval, such work is taken not to constitute a public nuisance, having regard to s 141 of the Roads Act.

  1. Further, the defendant specifically pleads that:

  1. any interference with the right to the enjoyment of private land or inconvenience to users of a public road was an inevitable consequence of the exercise of that statutory authority;

  2. in undertaking the work and engaging in the conduct which was the subject of the plaintiffs’ claim, it was exercising special statutory powers, as defined in s 43A(2) of the CLA;

  3. it was inevitable that the SLR construction would result in disruption to the public’s right of passage along the light rail route and, to the extent that there has been any effect on public passage, it was the inevitable consequence of the defendant’s exercise of statutory power to carry out such development; and

  4. the acts or omissions in planning, procuring and contracting for the SLR were not so unreasonable that no authority having the special statutory powers referred to could properly consider the acts or omissions by the defendant to be a reasonable exercise, or a failure to exercise, those powers.

  1. Finally, the defendant alleges that Hunt Leather failed to mitigate its loss by failing to close its wooden doors (which opened onto George Street) or somehow encase them in glass doors. The defendant did not pursue this aspect of its defence.

The plaintiffs’ case in closing submissions

Case A

  1. In their closing submissions, the plaintiffs put their case in three alternative ways. As they say, the primary case is Case A. They advance alternative cases in the event that they are unsuccessful in their primary case. Case A is as follows:

  1. that the erection of hoardings on and along the public roads and footpaths constituting the light rail corridor for the purposes of the construction work, and the construction work itself, substantially interfered with the plaintiffs and their businesses and the enjoyment by the first and third plaintiffs of their rights as occupiers of the land on which they conducted their businesses as soon as those steps commenced;

  2. that substantial interference caused the plaintiffs’ loss;

  3. that the use of the light rail corridor land for the purpose of that work was not a common or ordinary use of the land;

  4. that because it was not a common or ordinary use of the land, the substantial interference is actionable as a private nuisance in respect of the whole period of the substantial interference;

  5. that because the substantial interference was on a public road, and moreover, not an ordinary interference, it is actionable as a public nuisance in respect of the whole period of the substantial interference;

  6. the defendant was responsible for the substantial interference;

  7. section 43A of the CLA has no application to the proceedings;

  8. there is no statutory authority defence;

  9. there is no Roads Act defence to the public nuisance claim; and

  10. the defendant is liable in damages for the loss caused by the substantial interference.

  1. The plaintiffs’ primary case does not involve any consideration of whether the defendant’s conduct was reasonable or whether any unreasonable conduct caused the delay in the works or even whether any alternative approach to planning would have resulted in a substantially lesser interference.

  2. As I understand the plaintiffs’ primary case, even though they suggest that questions of reasonableness are irrelevant, they accept that they must establish that the defendant was responsible for the substantial interference. They use the term “responsible” as meaning something different from failing to take care or an assessment of the reasonableness of the defendant’s conduct.

Case B

  1. Case B is put in the same way as the plaintiffs’ primary case, except that it is assumed that s 43A of the CLA applies, contrary to their primary case. The plaintiffs submit that they would still be entitled to succeed because s 43A(3) is satisfied.

  2. The plaintiffs submit that the Court would accept that the conduct of the defendant was, in the circumstances, so unreasonable that no authority having the special statutory power in question would properly consider the act or omission to be a reasonable exercise of, or a failure to exercise, its statutory power.

  3. The plaintiffs describe s 43A as a condition that must be satisfied before their claim in nuisance can succeed.

  4. They then identify the reasons why no authority having a special statutory power (if they be wrong on their assertion about the special statutory power) could properly consider the conduct to be a reasonable exercise of that power.

  5. Case B necessarily involves an extensive consideration of the expert evidence and the steps taken by the defendant in the planning and procurement phase of the project, which form the basis of the allegations against it.

Case C

  1. The second alternative case, being Case C, proceeds on the basis that, contrary to the plaintiffs’ primary position, the use of the land during the SLR construction was a common and ordinary one. The plaintiffs submit that if there was a finding that the use of the land for the purposes of the SLR construction was common and ordinary, then the onus lies on the defendant to establish that it took reasonable and proper precautions to prevent disruption to the plaintiffs and other Group Members.

  2. The plaintiffs submit that the defendant has not discharged its onus in this regard. Further, the plaintiffs submit that if it was up to the plaintiffs to prove that the defendant failed to take reasonable and proper precautions to save disruption (contrary to their submissions regarding onus of proof), then the plaintiffs have adduced such evidence through their programming expert, Mr Griffith.

The defendant’s case in closing submissions

  1. During closing submissions, the defendant maintained its approach that it was necessary for the plaintiffs to establish that the defendant was negligent in order to succeed in the cause of action in nuisance. Indeed, the defendant’s approach to its submissions was to emphasise this and, further, that even if the plaintiffs establish that the defendant failed to take care, the plaintiffs have not established that such failures caused any substantial interference with their businesses.

  2. The defendant makes more than one reference to the need for the plaintiffs to establish the counterfactual. The defendant submits that the plaintiffs must establish what would have happened if, for example, a different delivery model had been adopted, further utility investigations had been carried out prior to entry into the Project Deed, or agreements had been entered into with utility providers prior to the entry into the Project Deed.

  3. The defendant rejects Case A on the basis that the use of the land was common and ordinary and rejects the proposition that the period of the nuisance (if any) should commence on the day that construction works started outside the plaintiffs’ businesses. The defendant says also that s 43A of the CLA applies such that it has no liability and that, in any event, on the evidence, the interference with the businesses was inevitable.

CONSIDERATION OF EVIDENCE AND THE PLAINTIFFS’ COMPLAINTS

The utilities risk

  1. In the pleadings, throughout the conduct of the hearing and during submissions, the parties referred to the “utilities risk”. The utilities risk is also referred to in many documents relied upon by the parties. It is appropriate to record what I understand to be the utilities risk, as that term will be used throughout the judgment.

  2. Generally, the utilities risk was the potential for problems to arise during the SLR construction from the presence of utilities along the SLR route. As I will identify, at the time of entry into the Project Deed, it was known that there were many utilities along the route which would need to be treated in order for construction to proceed. It was also expected that there would be more utilities which were not known to exist at the time of entry into the Project Deed but which would be discovered during the course of the construction.

  3. It was also known that the required treatment of each utility would vary, but that this could include covering up, replacing, moving and upgrading utilities. It was known that at the time of entry into the Project Deed, there were no agreements in place with utility providers as to the methods of such treatment.

  4. The utilities risk was the risk of delay and additional costs arising from the need to treat utilities and the discovery of previously unknown utilities.

  5. The risk arose at two levels, being:

  1. the uncertainty arising out of the absence of agreements with utility providers in respect of the already discovered and known utilities (as the defendant had not yet entered into agreements with utility providers, such as Ausgrid, prior to entering into the Project Deed); and

  2. the problems which might arise from the discovery of unknown utilities or changes in known utilities along the SLR route.

  1. The NSW Government had announced and promoted the idea that the SLR would be constructed in stages. Occupation periods were specified in the Project Deed. An Initial Delivery Program (“IDP”) was attached to the Project Deed. This was intended to provide a schedule for the construction works in individual stages (fee zones). Part of the schedule included allowances for the treatment of utilities in each fee zone. The risk was that, if more utilities were discovered in a particular fee zone and/or there were difficulties in reaching agreement with utility providers, then the IDP would be impacted and the occupation period in each fee zone would be extended. This is because:

  1. in respect of existing and known utilities, it would be necessary to reach agreement with utility providers as to how the utilities could be treated; and

  2. the discovery of any previously unknown utility would require the D&C contractor to:

  1. identify it;

  2. investigate it;

  3. figure out how the construction works would impact upon the utility;

  4. determine whether the utility needed to be relocated or merely protected;

  5. determine whether that work could be performed by the D&C contractor (“contestable work”) or whether it would have to be done by the utility provider itself (“non-contestable work”);

  6. plan for the work; and

  7. undertake the utility work.

  1. All utilities were owned by third party utility providers. Some utilities could only be handled by the owner of the utilities. Others could be treated by the D&C contractor, as needed.

  2. As I will identify, the utilities risk was a risk which featured prominently in the planning and procurement stage of the SLR project.

The planning and development of the SLR

Initial planning

  1. In 2012, the State published its “NSW Long Term Transport Master Plan” (“the Master Plan”). The Master Plan included the “Sydney Light Rail Strategic Plan”. Sydney’s light rail future was focused on expanding light rail services in the CBD and inner city. As identified, the NSW Government would focus on the customer as the centre of Sydney’s light rail future. A light rail in the CBD would benefit a range of users.

  2. After setting out the proposed route, the State identified that the SLR would cost approximately $1.6 billion to complete, which was funded by a transport budget and a PPP arrangement.

  3. It stated:

“Construction on the project will take place in stages, with city streets closed in sections to minimise disruption to residents, businesses and commuters. We are consulting with the City of Sydney, Sydney Business Chamber, NSW Property Council and other stakeholders to understand how we can support businesses during construction. Once completed, light rail will significantly benefit businesses along the route. Construction is likely to take five to six years to complete.”

  1. Plainly, the State identified from the outset that construction would take place in stages, with city streets to be closed in sections to minimise disruptions to residents, businesses and commuters.

  2. On 19 February 2013, the first of many delivery strategy workshops took place. At least at that time, the defendant contemplated that the SLR construction would be divided into “Early Works” and “Civil Works”.

  3. The scope of the Early Works was identified as including:

  1. utilities;

  2. bus and pedestrian networks; and

  3. enabling works.

  1. In the first delivery strategy workshop on 19 February 2013, the defendant recognised that utilities would be a primary area of risk and that the presence of utilities created a very uncertain environment (as it was recorded in the workshop minutes).

  2. Indeed, in that very first delivery strategy workshop, the defendant identified the following risks associated with its planned Early Works program:

  • lack of agreement with utility providers as to the typical treatment of utilities (protect, relocate or replace);

  • delayed agreements with utility providers;

  • lack of interdisciplinary design coordination, and lack of efficiencies regarding service treatments;

  • the standard requirements of utility providers (e.g. non-contestable works);

  • unknown services requiring increased cost, time and resources to relocate/protect utilities;

  • delays in bus/traffic modelling design and construction works for bus/pedestrian relocation;

  • utilities investigation, consultation and design not being undertaken early enough in areas relevant to the main light rail corridor; and

  • emergency services/emergency access requirements to site limiting economies of scale for enabling works/service relocations – cost and time delays.

  1. Further, it was proposed that the Civil Works would commence part way through the Early Works to minimise the overall duration of the SLR construction. The risks posed by utilities were said to include issues arising from agreements with authorities to relocate or protect utilities, as well as the performance of utilities works (i.e. the contestable and non-contestable works).

  2. The second delivery strategy workshop took place on 5 March 2013. Again, there was a focus on the utilities risk, noting that:

“Utilities authorities will ultimately decide the treatment/solution for the utilities. Further, utilities authorities are likely to require augmentation of their infrastructure during the relocation process. Early involvement and consultation with the utility authorities is required to identify the authorities’ requirements, obligations and commitments and ensure the project team has enough flexibility and understanding to address scope changes which arise.”

  1. Something went wrong. Specifically, the defendant entered into the Project Deed at a time when it did not know the extent of the utilities risk and on terms which offered little deterrence to the D&C contractor from overstaying in a fee zone. The risk about which it had expressed the most concern, being delays caused by utilities issues, eventuated. Because of the terms on which it had engaged and the incompleteness of its knowledge about the utilities risk, there was significant prolongation of construction activities in the fee zones (specifically, the fee zones which I have considered).

  2. In the end, I agree with Mr McIntyre, one of the defendant’s experts, to the effect that the defendant was faced with competing interests, and I agree with Mr Hardman that the defendant was required to undertake a commercial negotiation. The problem is that it did so on terms that were to the advantage of OpCo at a time when the risk to business owners along the route remained high. That which was predicted by Ausgrid, and had been described by the defendant as an extreme risk, occurred.

  3. Whilst the SLR was completed only a year behind schedule, the defendant’s fee zone strategy failed because business owners were subject to extensive construction activities for periods far in excess of that originally anticipated. The defendant took the risk of that occurring when it entered into the Project Deed on the terms that it did. It was the business owners who bore the consequence of the decision. The defendant created that state of affairs.

  4. For these reasons, the defendant is personally responsible for the nuisance and is liable to Hunt Leather and Ancio in respect of the losses which they have sustained.

Public nuisance

  1. The plaintiffs plead that:

“Through its conduct in:

(a)   authorising or permitting the construction of the Project; and or

(b)   causing the Civil Works Delay,

The defendant has caused substantial and unreasonable obstruction or inconvenience to the public in the exercise of public rights, namely by the damage to and obstruction of roadways and footpaths through road closures and erection of hoardings (Public Nuisance).”

  1. The elements of the tort of public nuisance are less controversial. They are that:

  1. there is a common injury to members of the public generally;

  2. the defendant knew or ought to have known of the nuisance to the public generally;

  3. the defendant had the means to abate the nuisance; and

  4. the defendant failed to take steps to abate the nuisance. [14]

    14. See Onus v Telstra Corporation Limited [2011] NSWSC 33 at [109]-[110] (per Price J).

  1. A private action for public nuisance is only sustainable by an individual where the claimant can demonstrate that he or she has suffered substantial damage over and above that suffered in common with other members of the public so affected by the nuisance.

  2. In my view, this case is not an appropriate vehicle for a claim in public nuisance for a number of reasons.

  3. The defendant also relies on s 141 of the Roads Act, which is its statutory defence to the claim in public nuisance.

  4. The plaintiffs say that s 141 does not assist the defendant for two reasons, being:

  1. the effect of s 144C of the Roads Act is that the RMS consent or approval was not required for any work on or in a public road in connection with the development of the SLR (being a light rail system) once it was declared on 11 September 2015, and the core construction work took place after that time; and

  2. even if the RMS approval was relevant, it was subject to the conditions set out in Schedule 3 and Schedule 4 of the approval. The plaintiffs submit that the defendant did not comply with those conditions.

  1. The immediate problem with that submission is that, as identified by the defendant during closing submissions, the plaintiffs have relied upon an incorrect version of s 144C.

  2. Further, I do not accept the second basis upon which the plaintiffs submit that s 141 does not operate as a defence. The plaintiffs submit that the RMS approval was subject to the conditions set out in Schedules 3 and 4.

  3. The plaintiffs have nominated the conditions with which they assert the defendant has failed to comply. However, if the plaintiffs’ submissions are correct and the onus of proof is on the defendant to prove that it has complied with each of the conditions contained in the RMS approval, then it would be necessary for the defendant to adduce evidence to satisfy the Court of compliance with all of the conditions.

  4. I say “all of the conditions” because it cannot be that the defendant must only establish satisfaction with the conditions nominated by the plaintiffs. Otherwise, the mere allegation of a failure to comply with certain of the conditions by the plaintiffs would shift the onus of proof to the defendant. This arises in circumstances whereby the plaintiffs submit that the defendant cannot rely on the statutory defence under s 141 of the Roads Act because it has not complied with the conditions of the RMS approval. That cannot be correct.

  5. In my view, the onus of proof should rest with the asserting party, in accordance with the principle of “he who asserts must prove”. If the plaintiffs assert non-compliance, they must prove it.

  6. The plaintiffs have not proved that the defendant failed to comply with the conditions of that approval.

  7. In my view, s 141 of the Roads Act applies.

  8. The plaintiffs have not established all of the elements of the tort of public nuisance and, in any event, the defendant has a defence under s 141.

Damages

  1. The lead plaintiffs maintain that, as a result of the nuisance, they have suffered significant financial losses. It is important to observe that those financial losses were sustained by the relevant corporate entities, not the individuals.

  2. Assessing damages in a case such as this involves impression and estimate. Compensation must be fair to both parties. Financial experts tend to analyse in minute detail, as has occurred in this case. However, even one incorrect assumption might render an expert’s opinion invalid.

  3. The plaintiffs served reports from Mr Christopher Abery, both in respect of Hunt Leather and Mr Zisti’s restaurant. The defendant similarly served two reports from Mr Ian Shimmin.

  4. There was substantial disagreement about the likely performance of the Hunt Leather group (with reference to the Strand Arcade and QVB stores) if not for the impact of the SLR construction.

  5. The reason for this disagreement is that, on Mr Shimmin’s modelling and analysis, there would have been a significant reduction in the turnover at the Strand Arcade store because of external factors (other than the light rail) such that, at least on one view of his analysis, the Strand Arcade store would have made no profit by 2019, even without the impact of the SLR.

  6. Mr Abery considered that past performance was a useful guide and that there was no reason to expect anything other than that the Strand Arcade would have continued to perform well, with turnover increasing along industry lines, allowing for some store specific contingencies.

  7. It is my task to determine which approach I should accept for the purposes of assessing damages or, more specifically, whether I should adopt Mr Shimmin’s modelling as reflective of the likely turnover of Hunt Leather, if not for the construction of the SLR.

  8. It is difficult to accept that a business with such a track record as Hunt Leather would have suffered such a diminution in profitability over the period 2016 to 2020, even without the construction activities. However, I accept that there was increased competition during that period.

  9. In the end, while Mr Shimmin’s analysis and reference to factors which would have impacted upon Hunt Leather’s sales is important, I do not accept that I should apply his percentage discounts based on each of the factors.

  10. If the effects of the Hunt Leather group performance and small player erosion are removed from Mr Shimmin’s modelling, then the impact of the other factors is marginal. For example, in 2016, the impact of Mr Shimmin’s negative factors would have been a deduction of 9.8% as against the status quo market growth rate of 14.1%.

Expert accountants

  1. Both parties agreed that, unless I make findings entirely consistent with the plaintiffs’ best case – that is, awarding damages for the whole period right up to 2020 and on the basis of the more favourable assessment of Mr Samuel – I would not be able to finalise any assessment of damages based on the accountants’ reports.

  2. Both parties agreed that if my findings take a different form, such as allowing losses for different periods, not allowing the assumed recovery period or not accepting the proposed methodology, then I would not be able to undertake any final assessment without further assistance from them.

Common Questions

  1. I will now answer the common questions:

  1. Is any liability that the defendant has in nuisance based on the defendant’s exercise of or failure to exercise a special statutory power conferred on the defendant?

Answer: No.

  1. If so, was any act or omission involving the exercise of or failure to exercise that special statutory power an act or omission that was in the circumstances so unreasonable that no authority having that special statutory power could properly consider that act or omission to be a reasonable exercise of or failure to exercise its power?

Answer: This does not arise but, for completeness, if it were necessary to consider the acts or omissions of the defendant as a whole rather than identifying one act or omission (for example), I would not have considered the acts or omissions so unreasonable.

  1. Does s 42 of the CLA apply to the allegations of nuisance advanced in these proceedings?

Answer: No.

  1. Was the construction of the SLR along the SLR route an ordinary or normal use of the land:

  1. along every part of the route; or

  2. only in certain parts of the route?

Answer: No, not in any part of the route.

  1. In doing any of the acts alleged in paragraphs 7, 9, 10A, 15 and 18 of the Statement of Claim, was the defendant exercising a statutory authority, being the s 104O power or the s 3E power?

Answer: Yes. The defendant is a statutory authority/government agency created by statute. It was exercising its general powers under the TA Act.

  1. If yes to 5, was any interference with the right to enjoyment of private land or obstruction or inconvenience to the public the inevitable consequence of the exercise of that statutory authority?

Answer: Yes, but that is not the point. The issue is not whether “any interference” was inevitable but whether such interference as gives rise to an otherwise actionable nuisance was inevitable.

The answer to that question would be “no”.

  1. Does s 141 of the Roads Act have the effect that no public nuisance was caused by the defendant as alleged in these proceedings?

Answer: Yes.

  1. In circumstances in which the defendant did not undertake the construction activities, should the defendant be liable for any nuisance and, if so, on what basis?

Answer: Yes.

The other questions cannot be answered at this stage.

Chapter 12 – Conclusion

  1. The first and third plaintiffs have succeeded, although Hunt Leather has only succeeded in respect of the Strand Arcade store. The defendant is responsible for such interference because it created the state of affairs which led to the extended period of interference in circumstances in which the harm was foreseeable and, indeed, predictable.

  2. The defendant sought to minimise the interference with the businesses along the SLR route through its fee zone strategy but its fee zone strategy failed for the reasons I have identified.

  3. The defendant may have been exposed to additional costs but the persons who ended up bearing the costs of the prolonged construction activity in the fee zones were some of the business owners along the light rail route. They had been promised minimal disruption and a staged process of construction, which would have seen them exposed to the construction activities for months, rather than years.

  4. On any view, the original projections by the defendant were optimistic and not soundly based. I have thus allowed a longer period than that originally projected as being reasonable. There was obviously a degree of imprecision in trying to work out the point at which the interference with the businesses (which commenced when the construction work commenced) became unreasonable. I have relied on the opinion of the only expert who really attempted to undertake the analysis, Mr Griffith, in this regard. I have also accepted Mr Griffith’s opinion as to the cause of the prolonged period of construction in Fee Zones 5, 6 and 29.

  5. There is no alternative opinion or alternative evidence. There are merely assertions that Mr Griffith’s analysis is flawed.

  6. I have rejected the defendant’s statutory authority defence of inevitability.

  7. Further, I have found that s 43A of the CLA does not apply in the circumstances of this case.

  8. I have also rejected the plaintiffs’ claims in public nuisance.

  9. Those findings may assist going forward, bearing in mind that my determination only relates to two members of the class and three (out of 31) fee zones. However, it seems to me that there remains a significant problem in applying my findings about substantial and unreasonable interference to all members of the class. To the extent that this judgment, through the common questions and my findings in respect of the lead plaintiffs, is intended to provide a basis for the assessment of entitlements of other members of the class, I emphasise these matters:

  1. the reason that Hunt Leather and Ancio have succeeded is, in part, that they operated small businesses which were highly susceptible to the effects of construction activities without any means of reducing the impact. It is not difficult to understand how a small boutique luxury goods store which opened directly onto the construction works would suffer because of those works. It is not difficult to understand how a small specialist restaurant which relied on the amenity of its premises would suffer as a result of construction activities happening right outside its front door;

  2. however, the position may be different with other businesses. Mere proximity to the construction works does not establish substantial interference, no matter what the period of interference, as I have found in respect of the Hunt Leather QVB store. Many businesses may have been affected by the construction of the SLR in ways which would not constitute a nuisance, despite some diminution in profitability flowing from the construction of the SLR; and

  3. it must be remembered that the defendant was a statutory authority and was trusted with the responsibility of improving public transport in Sydney. Infrastructure development will always result in some impact on businesses in the relevant area and changes to an area caused by infrastructure development may have a detrimental effect on businesses. I do not consider that persons would have an actionable nuisance merely based upon factors such as:

  1. the closure of a road to vehicular traffic;

  2. changes in parking restrictions, such as parking being prohibited outside a business;

  3. changes in traffic conditions, resulting in a reduction in vehicular traffic;

  4. reductions in pedestrian traffic;

  5. premises becoming dusty in ways which could be relieved through self-help measures, such as by cleaning; and

  6. line of sight restrictions.

  1. Nuisance has been established in this matter by a combination of factors, particularly having regard to the way in which the construction activity impacted upon the business activities of the lead plaintiffs.

  2. It follows that the fact that persons were operating businesses adjacent to the SLR route during the period of construction does not, of itself, give rise to any cause of action on their part. More is required.

  3. The fact that these are representative proceedings does not alter the legal principles which apply. As I said at the outset, this is not a particularly apt vehicle for a class action, albeit as I have identified, some of the issues might be common and have been determined by this judgment. Going forward, there will need to be a process or mechanism developed for the determination of both entitlement and loss.

  4. My preliminary view is that referees (who are subject to the Court’s oversight) should be appointed to determine outcomes based on guidelines and parameters. Suffice to say, any system which involves each Group Member being required to spend vast sums on quantum experts and have extensive reports prepared for the purposes of assessing their loss (as the lead plaintiffs have done through the funder) must be unworkable.

  5. The lead plaintiffs, Hunt Leather and Ancio, are entitled to succeed. The other lead plaintiffs, Ms Hunt and Mr Zisti, are not.

  6. There will need to be another short hearing in order to:

  1. finalise damages for the lead plaintiffs;

  2. determine a process going forward; and

  3. consider whether there might be any other common questions which could be answered.

  1. I will list the matter for further directions.

Endnotes

Amendments

15 December 2023 - Paragraph [1108(1)] changing the word “revenue” to “profit” and adjusting a date from 3 September 2017 to 27 January 2017.


Paragraph [1108(2)] changing the word “revenue” to “profit” and adjusting a date from 3 September 2017 to 27 January 2017.


Table at paragraph [935] adjusting a date from 3 September 2017 to 27 January 2017.


Paragraph [938] adjusting a date from 3 September 2017 to 27 January 2017.

Decision last updated: 15 December 2023

Most Recent Citation
Cases Citing This Decision

7

Transport for NSW v Hunt Leather Pty Ltd; Hunt Leather Pty Ltd v Transport for NSW [2024] NSWCA 227
The Owners - Strata Plan No 16460 v Hunter Water Corporation [2025] NSWSC 1029
Meadth v Nye [2024] NSWSC 1567
Cases Cited

28

Statutory Material Cited

11

Bankstown City Council v Zraika [2016] NSWCA 51
Bankstown City Council v Zraika [2016] NSWCA 51
Bankstown City Council v Zraika [2016] NSWCA 51