Transport for NSW v Hunt Leather Pty Ltd; Hunt Leather Pty Ltd v Transport for NSW

The Court of Appeal of New South Wales, comprising Bell CJ, Leeming and Mitchelmore JJA, considered appeals and cross-appeals arising from claims of private nuisance brought by Hunt Leather Pty Ltd and Ancio Investments Pty Ltd (the plaintiffs) against Transport for NSW (the defendant). The plaintiffs alleged that their properties were detrimentally affected by the construction of the Sydney Light Rail project.

The central legal issues before the Court were whether the interference with the plaintiffs' enjoyment of their properties was substantial and unreasonable, thereby constituting a private nuisance. The Court also had to determine the significance of the defendant's alleged failure to take reasonable care to the cause of action in nuisance, and whether the onus lay on the defendant to establish it had taken reasonable care. Further questions concerned whether the use of the road for construction purposes was exceptional, whether the interference was inevitable, and the applicability of section 43A of the *Civil Liability Act 2002* (NSW). Additionally, the Court considered whether a commission payable under a litigation funding agreement constituted recoverable pure economic loss.

The Court of Appeal allowed the appeal and dismissed the cross-appeal. It reasoned that the plaintiffs had failed to establish a cause of action in private nuisance. The Court clarified that the mere fact that a defendant has failed to take reasonable care does not automatically establish nuisance, nor does it shift the onus of proof to the defendant to demonstrate it acted reasonably. The Court found that the interference complained of, while significant, was not substantial and unreasonable in the context of the exceptional circumstances of a major public infrastructure project, and that the plaintiffs had not demonstrated that the defendant failed to take reasonable care. The Court also held that the litigation funding commission was not recoverable. Consequently, the Court set aside the previous judgments in favour of the plaintiffs and ordered that the proceedings be dismissed, with the plaintiffs to pay the defendant's costs.