NSW Government Cleared of Liability for Sydney Light Rail Business Losses

The NSW Court of Appeal has overturned a landmark decision that initially held the state government liable for business losses incurred during the construction of the Sydney light rail project. 

This ruling has significant implications for businesses affected by public infrastructure projects and potentially halts future compensation claims related to construction disruptions.

Original Ruling and Compensation

Initially, two Sydney businesses were awarded nearly $4 million in compensation after successfully arguing that the lengthy light rail construction severely impacted their operations. 

This court decision opened the door for around 300 additional businesses and residents to file claims for similar disruptions they experienced during the multi-year project, which caused significant delays, noise, road closures, and reduced foot traffic in affected areas.

The original ruling suggested that the NSW government had a responsibility to compensate businesses for the substantial disruptions caused by the project. 

Many other small businesses impacted by the construction hoped to follow suit, seeking financial relief for the losses incurred during the prolonged construction phase.

Court of Appeal Overturns Decision

However, in a major legal victory for the NSW government, the Court of Appeal has reversed the decision. 

The court ruled that the disruptions caused by the construction of the light rail were neither "substantial" nor "unreasonable." It dismissed the class action, rescinding the nearly $4 million awarded to the two businesses.

The court’s decision emphasised that the disruptions were a reasonable consequence of large-scale public infrastructure projects. 

It further ruled that businesses operating in areas undergoing such developments should expect some level of inconvenience and economic impact. 

The disturbances were deemed within the bounds of what is considered acceptable for public works, meaning that the government could not be held liable for the losses experienced by businesses.

‍