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Private nuisance is a tort concerned with protecting a person’s interest in land from substantial and unreasonable interference with its use or enjoyment.

In a recent decision having significant implications for public authorities, including local councils, the High Court unanimously allowed two appeals from judgments of the NSW Court of Appeal in Hunter Leather Pty Ltd v Transport for NSW [2025] HCA 6 concerning the tortious liability of Transport for NSW (TfNSW) in nuisance during the construction of the Sydney Light Rail infrastructure project.

Background

Transport for NSW planned and procured the construction of the Sydney Light Rail along several roads in the Sydney CBD. Construction works, undertaken by contractors, caused prolonged noise, dust, hoardings, access restrictions and traffic changes. The works significantly exceeded publicly announced construction timeframes due largely to the need to deal with unidentified underground utilities in the construction process.

Hunt Leather Pty Ltd and Ancio Investments Pty Ltd were lessees of commercial premises adjacent to the works. They brought proceedings alleging, among other things, private nuisance, claiming substantial interference with the use and enjoyment of their premises over an extended period.

Procedural history

At first instance, the trial judge held TfNSW liable in nuisance for the loss suffered by Hunt Leather Pty Ltd and Ancio Investments Pty Ltd. That aspect of the trial judge’s decision was overturned by the NSW Court of Appeal.

Decision

The High Court allowed appeals from the decision of the NSW Court of Appeal on the issue of the issue of whether TfNSW was liable in nuisance.

Substantial and unreasonable interference with a neighbour’s right to use and enjoy their property

Applying the well-established legal principles from Gartner v Kidman (1962) 108 CLR 12 and Elston v Dore (1982) 149 CLR 480, the High Court held that liability would occur when:

1. an authority substantially and unreasonably interfered with a neighbouring owner’s ordinary use and enjoyment of their property, and
2. that authority either used its land for a purpose that is not common and ordinary or used the land without reasonably minimising the extent of the substantial interference with the neighbouring owner’s ordinary enjoyment of land.

The High Court accepted that TfNSW’s works caused substantial interference with neighbouring landholders’ use and enjoyment of their properties from the outset, given the scale of noise, dust, access restrictions and visual barriers created by the construction. The critical question, however, was when that substantial interference became unreasonable.

Focusing on the perspective of a normal occupier, the High Court held that it was open to the primary judge to conclude that, as delays accumulated far beyond what had been publicly represented and reasonably expected, the interference crossed the threshold from tolerable inconvenience into actionable nuisance. The analysis emphasised duration and intensity as central to assessing substantial and unreasonable interference.

Whether s43A of the Civil Liability Act 2002 applies

Section 43A of the Civil Liability Act 2002 restricts tortious liability arising from the exercise of a special statutory power by a public authority, so that liability will only arise if the exercise of the power was so unreasonable that no reasonable authority could regard it as a proper exercise of that power.

The High Court held that s43A of the Civil Liability Act 2002 did not apply in the present case. The Court held that s43A applies only where liability is ‘based on’ the exercise of a special statutory power—that is, a power of a kind not ordinarily exercisable without statutory authority.

The Court held that TfNSW’s conduct in planning, procuring and contracting for construction works was not the relevant act that gave rise to tortious liability. Rather, nuisance was caused by the construction works themselves, which did not involve the exercise of a special statutory power. Therefore, TfNSW’s liability was assessed in accordance with general test for private nuisance.

Statutory authority defence

The common law defence of statutory authority protects a defendant from liability where legislation authorises conduct that necessarily causes interference or harm. The defence applies only where the nuisance is an inevitable consequence of exercising a statutory power and the authority has acted reasonably and with proper regard to affected landholders.

The High Court held that the first element was satisfied. While the works were constructed under widely expressed statutory powers and did not include an express power for TfNSW to plan or procure a light rail, that legislation impliedly authorised TfNSW to plan and procure a light rail.

On the second element, the High Court held that TfNSW had not acted with reasonable care and reasonably with a view to minimising or eliminating the interference with the enjoyment of land by others, for ordinary purposes.  Although TfNSW was authorised by statute to plan and procure the Sydney Light Rail, that authority was subject to implied conditions that the power be exercised reasonably and with due regard to neighbouring landholders.

The High Court held that it was open to the trial judge to determine on the evidence that TfNSW failed to establish that the prolonged and severe interferences were an inevitable consequence of exercising its statutory powers, particularly given the deficiencies in planning and risk allocation that contributed to excessive delays. As a result, TfNSW was liable for the loss incurred in the period during which the interference was unreasonable.

Implications

This case serves as a timely reminder to all public authorities, including local councils, of the legal risks associated with carrying out infrastructure projects, public works and other activities, which interfere with a neighbouring owner’s right to use and enjoy their property.

It confirms that public authorities are not insulated from tortious liability simply because works are authorised, or carried out on public land. Nuisance carries particular weight, as a statutory power to carry out public works does not confer immunity from liability.

The focus is not on the defendant’s conduct in the abstract, but on whether a normal occupier in the plaintiff’s position should reasonably be expected to tolerate the interference. Unless the interference is an inevitable consequence of exercising that power and reasonable steps have been taken to minimise disruption, all public authorities may be liable in nuisance and required to compensate affected landholders.

Where construction causes substantial interference with neighbouring land, public authorities must ensure that projects are planned, staged, and managed so that the duration and intensity of disruption remain within what affected occupiers can reasonably be expected to tolerate. Extended delays, inadequate risk management, or contractual arrangements that cause prolonged disruption are risks that require proactive planning, community engagement and realistic project timelines to mitigate the risks of potential liability.

The High Court decision can be read in full here.

If you would like to discuss any aspect of this article, please don’t hesitate to contact Dr Lindsay Taylor or Dominic Smith.