A ruling denying compensation to businesses impacted by Sydney's billion-dollar light-rail project has been overturned as the state government considers its ramifications.
The state-run Transport for NSW was ordered in July 2023 to pay damages to two businesses affected by the $3 billion construction project which closed off much of George Street in the CBD.
This was overturned by the NSW Court of Appeal in September 2024.
The business owners, instructed by class action law firm Banton Group, then took the case to the High Court which ruled in their favour on Wednesday.
The decision reinstates rulings awarding CBD businesses Hunt Leather and Kensington restaurants and coffee cart owned by Ancio Investments $3,693,164 and $317,773 respectively.
A Transport for NSW spokesperson said the government needed time to consider the implications of the complex judgment in detail.
"There will need to be an assessment of the implications for the remainder of the class, and for the many important NSW government infrastructure projects which could be impacted by this decision," he said.
A majority of the court found there had been "substantial interference" with businesses' enjoyment of their land due to the construction.
"(Transport for NSW) failed to discharge its onus of establishing that it planned and procured the construction of the Sydney Light Rail in a manner that reasonably minimised the extent of that substantial interference," the court's summary of its judgment said.
The decision paves the way for others who owned land in the vicinity of the construction project to seek compensation from the government.
Any amounts paid will be reduced by a commission of 40 per cent owed to the funder International Litigation Partners which financially backed the class action.
The NSW Supreme Court's ruling that this commission could not be recouped by the business owners as additional damages was upheld by the High Court on Wednesday.
The light rail runs through Sydney's city centre to the eastern suburbs and was initially forecast to cost $1.6 billion.
However, that blew out to $3.1 billion by the time it was fully operational in 2020.
Banton Group did not respond to a request for comment.
