The NSW government will no longer be liable for financial losses suffered by businesses during the drawn-out Sydney light rail construction, after successfully appealing a court ruling.
The NSW Court of Appeal overruled an earlier win by businesses who had argued that delayed works on the light rail line between the CBD, Randwick and Kingsford had negatively affected them.
In July last year, NSW Supreme Court Justice Richard Cavanagh found that the two lead plaintiffs — Hunt Leather in the Strand Arcade and a Thai restaurant on Anzac Parade in Kensington — had succeeded in proving the construction caused substantial and unreasonable disruption.
The two businesses were awarded combined compensation of nearly $4 million.
That decision paved the way for a group of about 300 retailers and residents to claim compensation from Transport for NSW.
But a ruling on the amount owed to the two lead plaintiffs was pushed back when Transport for NSW launched an appeal arguing that any interference suffered by the businesses was neither substantial or unreasonable.
On Wednesday, a panel of three judges from the NSW Court of Appeal unanimously upheld the state government's challenge and dismissed the group's class action.
"It cannot be the law that construction authorised by statute becomes actionable nuisance if it takes a month or two months or three months longer than scheduled," the judgement read.
The court of appeal found that transport authorities couldn't foresee the extent of the construction delays.
Construction on the 12-kilometre-long light rail line began in 2015 and was completed a year behind schedule in 2020.
A group of campaigners sought compensation from the state government over the loss of businesses and revenue due to the light rail project. (ABC News: Harriet Tatham)
The government agency also challenged a ruling that disruption to businesses along the route was "far in excess of what was planned or promised" due its alleged failure to investigate utility pits underneath the route.
"It was not established that it was possible, and if so how long it would take and whether that too would amount to a substantial interference with the enjoyment of the plaintiffs' land, to obtain complete knowledge of the unknown utilities," the judgement read.
"In those circumstances, the idea that a series of investigative trenches could be dug so as to identify all of these utilities (for example, a series of night works, with the road and footpath being temporarily restored in time for morning traffic) seems implausible."
In a statement, NSW Transport acknowledged the NSW Court of Appeals ruling.
"While Transport was successful, the judgement is extensive, and Transport will spend some time working through the court's judgement to understand its implications."