‘You’ve stuffed up’: Businesses join class action against NSW Government
Business owners in Newcastle’s CBD have joined class action against the NSW Government to seek compensation for financial losses during construction of the light rail project and failure to warn them of the adverse effects.
Newcastle
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Frontline Hobbies has been operating in Newcastle’s CBD for 41 years, but that could all end after light rail construction in the city has proven to be damaging for businesses.
Construction of the NSW Government’s light rail, which cuts right through Hunter St, started in August 2017.
It finished in February, but business owners say they continue to feel the lasting effects, which have deterred customers from coming back.
Frontline Hobbies owner Colin Scott said business saw a downward trend of sales once construction commenced.
Business became so bad Mr Scott made the decision to move his store to Broadmeadow. He still has the CBD premises but its future does not look good.
“By February 2018 it really got serious and we could not see our way clear to surviving another 12 months,” Mr Scott said.
“That decision to move was not taken lightly because after 40 years people know where you are and it’s very hard to move a business of our size anywhere.
“If we would have stayed in the city, we would have gone bankrupt because the city store that we were proud of, was losing money and that shouldn’t happened.”
Mr Scott said the government told businesses once the construction was finished, it would have a dramatic turnaround and the city would be revitalised. However, he is yet to see that happen.
“All along they have told us that it would improve the city out of sight and that hasn’t happened,” he said.
“The light rail looks good, it makes Newcastle look like a modern city, but it’s not doing the job it’s supposed to by bringing in extra people.
“There might be hundreds using the rail but they’re not shoppers.
“The NSW Transport department and the businesses along the route in the early stages all agreed the light rail should be a good thing and should run down the existing transport corridor that was terminated.
Frontline Hobbies is one of a number of local businesses who have been substantially impacted by construction of the light rail and are now taking part in class action.
The action led by Sydney’s Mitry lawyers, who are also running a class action against Sydney’s light rail, will claim for damages of economic loss suffered by Newcastle businesses as a result of negligence by the defendants, Transport NSW and potentially managing contractor Downer EDI.
They will argue the state government failed in their management and construction of the project by not taking reasonable steps to minimise or reduce disruptions to surrounding businesses.
Mitry lawyers will first assess whether the NSW Government is liable for the losses suffered and what damages should be awarded to class members.
The class action is also strong enough to have attracted a third party investment from a litigation funder, which means there is no financial risk to businesses that join.
“They’ve had to put up with a lot of noise, distraction to dust, disruptions to businesses, lack of access and the delays resulting from mismanagement of the light rail,” Mitry Lawyers’ Rick Mitry said.
“The government don’t have unimpeachable immunity for the wrongs they do in implementing infrastructure projects.
“In Sydney, we found there was a lot of mistakes made and a lot of things not planned properly so we’re reasonably confident the court will find the project was not managed properly and there was a nuisance created unnecessarily.”
Mr Mitry estimated a win could see the total damages awarded in excess of $80 million.
“Those class members will then be able to present their full financial affairs to show what they used to earn, the losses they have had since then and the projectables since the construction of the light rail,” he said.
“An administrator will be appointed to have a look at all the forensic accountant reports and present to the court the total claim of each person and the claimant will receive whatever the court accepts is a reasonable amount.
“The group will be paid and share the money accordingly but from that, a percentage will be deducted by the litigation funder, usually 25 per cent.
“It appears that minimum losses for each business owner is in the vicinity of 200 thousand to half a million and sometimes more.
“If there’s 80 members at half a million each then that’s 40 million but it could be more.
“It could take a year or so, it’s not going to finish overnight, it’s a lot of work to do but we’re ready for it.”
Mr Scott admits they could not just sit back and let the government get away with significant negligence. He said they needed to stand up.
“As a business community we can’t just sit on our hands, we’ve got to take it to the government and say you’ve stuffed up, this is our life you are playing with,” he said.
“It’s not only the monetary cost, it is the mental anxiety, anguish, depression that goes with it.
“A lot of the businesses were close to mental breakdowns, they’ve lost their business, they’ve walked away from it and they’ve got nothing left.
“Some people’s lives have been changed and their businesses have been destroyed and their confidence as a result has also been destroyed.”