A judge's findings that businesses were owed compensation for disruption caused by delayed construction of Sydney's light rail are under attack in court.
In July 2023, the NSW government was ordered to pay damages to two businesses affected by the light rail project in which traffic was closed to much of George Street in the CBD.
Justice Richard Cavanagh found while the construction was initially reasonable, there was a point where delays became so excessive that businesses along the route suffered nuisance and should be compensated.
CBD businesses Hunt Leather and Kensington restaurants and coffee cart owned by Ancio Investments were awarded $3,693,164 and $317,773 respectively.
These findings opened the door to further claims by other businesses who signed up to the NSW Supreme Court class action proceedings.
On Monday, the government sought to overturn the judgment in the Court of Appeal.
As the three-day hearing began, the state's barrister Nicholas Owens SC attacked Justice Cavanagh's findings the project was reasonable up to a point in time.
This would lead to curious outcomes, including that court injunctions could be issued to stop partly finished construction if it went on for too long, Mr Owens said.
”Construction might be one of those cases like a haircut where one's actually worse off if you start but don’t finish the job," he told the court.
In construction cases like this, the court had to consider "give and take" between someone's right to build on their land and how it affected those around them, Mr Owens argued.
"If the end be legitimate, then the reasonable means of achieving that is an interference which they must put up with," he said.
The light rail project was an entirely legitimate aim, meaning the construction itself was reasonable, the court was told.
The CBD light rail, initially forecast to cost $1.6 billion, jumped to $2.1 billion by 2015 and $3.1 billion in 2020.
Completion was delayed after previously unknown utilities such as underground electric wiring and plumbing were located where tracks and other infrastructure was meant to be laid.
While Justice Cavanagh acknowledged NSW had done extensive investigations to locate these types of utilities, he said more could have been done.
Mr Owens questioned whether the government should have done more, saying there was no evidence these surveys would have uncovered anything.
This would have led to further disruptions as extensive sections of road were dug up to find pipes and cables lying underneath, he said.
There was also no evidence the government could have encouraged contractors to take on the risk of unknown utilities being dug up through financial allowances or better contractual terms, or how that would have impacted the delays experienced by the project, Mr Owens said.
Hunt Leather and Ancio Investments have also filed their own appeal.
They contend that Justice Cavanagh erred by finding that businesses only suffered nuisance after a certain point in time, and want the court to find they were owed damages for from the date construction commenced.
Their appeal also attacks a decision from February putting affected businesses on the hook for a 40 per cent commission sought by a litigation funder backing the case.
Justice Cavanagh rejected a bid to foist these expenses onto the NSW government as a form of damages.
The hearing continues.
