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Posted: 2023-07-19 02:00:46

A court has found the state government is liable for the financial losses suffered by some businesses along the Sydney CBD light rail route during delays to the project's construction.

A group of about 300 retailers and residents are suing Transport for NSW in a class action, alleging they suffered "unreasonable interference" from the works between the CBD, Randwick and Kingsford.

This morning, Supreme Court Justice Richard Cavanagh ruled 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.

But he cautioned not all parties to the class action would be in the same position and further hearings would be needed to determine how to proceed.

Justice Cavanagh found that the disruption to businesses along the route was "far in excess of what was planned or promised" when the long-delayed project was announced.

That was largely due to problems with utility pits underneath the route which caused the project to drag on for months longer than expected, he found.

Speaking outside the court, Sophie Hunt said her family business Hunt Leather had been devastated by the construction, which saw hoardings erected on the street outside and the shop inundated with dust.

"The government shouldn't be allowed to ruin people's lives to such an extent for such a long period," she said.

"We were all prepared for some disruption, we were excited about the project. But we weren't prepared for four years of being shut off."

She said it would take the business at least a decade to recover.

"I've got so much debt, it's not even funny."

An emotional woman holds her face as a group of supporters look on

Angela Vithoulkas (centre) led the campaign for compensation over the losses businesses due to the light rail project. (ABC News: Harriet Tatham)

The court heard an original plan to do works on utilities underneath the route before the major construction was abandoned in the planning stage, in favour of only doing that work at six key intersections.

When more utilities were discovered along the route during construction, there was no agreement in place with Ausgrid or Sydney Water as to how those utilities could be treated, and no incentive for contractor Altrac to rein in blowouts in the construction timeline.

Justice Cavanagh said Transport for NSW was "well aware of the risks of substantial delay" and described them as "not only foreseeable but predictable".

"The end result of that process was business owners were exposed to that risk and the risk came home," he said.

Justice Cavanagh noted that the businesses would not be compensated for their losses for the entire period of construction, only the point at which the delays caused the inconvenience to be "unreasonable".

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