By Tara Plumbe, Partner, Tara Haas, Lawyer & Ishita Rao, Lawyer

The High Court of Australia has overturned the Court of Appeal’s decision and allowed an appeal for businesses pursuing damages in nuisance arising from the light rail construction. In handing down its decision, the High Court has clarified the key principles for establishing private nuisance claims.

Background

The appeal centred on whether Transport for NSW (“TfNSW”), a public authority, was liable in private nuisance to neighbouring businesses disrupted by the construction of the Sydney Light Rail (“SLR”). TfNSW was responsible for planning and procuring the project.

The Appellants, both lessees of premises along the SLR route, experienced substantial interference with the use and enjoyment of their properties throughout the construction of the SLR. Although the works were staged to reduce impacts, each stage ran significantly over schedule.

The Appellants commenced proceedings against TfNSW. The key issue for the Court was not whether there has been interference, but whether — and for what duration — the interference became unreasonable.

The Decision at First Instance

At first instance, the primary judge rejected the that the entire construction period was actionable. Instead, the judge found TfNSW liable for a portion of the works, holding that:

• the interference eventually reached the threshold of unreasonableness; and
• TfNSW failed to show that it either took reasonable steps to minimise harm or that the interference was inevitable.

The Decision on Appeal

The Court of Appeal accepted the legal test applied by the primary judge for determining private nuisance. However, it overturned the finding of unreasonableness, concluding that the Appellants had not established when or why the interference had become ‘unreasonable’. As such the threshold for unreasonable interference had not been met.

The High Court’s decision

Ultimately, the High Court restored the primary judge’s decision holding that TfNSW was liable for causing substantial and unreasonable interference with the appellants’ use and enjoyment of their land.

In doing so, the Court considered:

1. Whether the prolonged construction works caused substantial and unreasonable interference with the appellants’ enjoyment of land; and
2. If so, whether TfNSW could rely on lawful justification — namely statutory authorisation or special statutory powers — to avoid liability.

Key Principles Reaffirmed

The High Court reaffirmed the core principles of private nuisance:

• A defendant is liable if it causes substantial and unreasonable interference with the plaintiff’s ordinary enjoyment of land.
• Once substantial interference is established, the defendant must show either:

1. the use of their land was not for a “common and ordinary” purpose; or
2. if it was, that the activity was “conveniently done” — meaning reasonable steps were taken to minimise interference.

Statutory Authority Defence

The Court also clarified that the defence of statutory authority only applies where the interference is inevitable, not merely incidental to exercising statutory powers. The Court held that TfNSW failed to demonstrate that:

• the delays were inevitable; or
• the works were “conveniently done” with reasonable regard for neighbouring occupiers.

Section 43A of the CLA

Importantly, the High Court rejected TfNSW’s reliance on s 43A of the Civil Liability Act (CLA).  While the project itself was authorised by statute, the interference was not shown to be the necessary or unavoidable result of exercising that statutory power. TfNSW also did not demonstrate that it acted with reasonable regard for neighbouring occupiers.

Implications

This landmark case serves as a reminder that:

• The torts of negligence and nuisance are two separate actionable torts, and you do not need to establish negligence in order to succeed in a claim in nuisance
• A claim for private nuisance is not based on the concept of reasonable care (i.e. negligence) but rather whether there has been substantial and unreasonable interference.
• Statutory authorities can be held liable in a claim for private nuisance and statutory approval does not provide blanket immunity for nuisance claims.

• Authorities must plan and conduct works with reasonable care, ensuring impacts such as noise, access restrictions, dust and delays are mitigated where possible.
• Section 43A of the CLA is not a standalone defence — it merely modifies the applicable standard of care for public authorities