This New South Wales Supreme Court ruling has helped to distinguish the different thresholds at play when examining both nuisance and negligence claims against a public authority in New South Wales.
In issue
- The case focused on a defendant’s actions and whether they amounted to a liability in nuisance. Also in issue was whether sections 42 and 43A of the Civil Liability Act 2002 (NSW) applied to nuisance claims against public authorities in New South Wales.
The background
The case involved 119 plaintiffs, including the Owners’ Corporation representing the owners of a strata scheme bearing Strata Plan No 16460. The other 118 plaintiffs were owners of the lots within the scheme, which was a townhouse complex in Elermore Vale in Newcastle. The plaintiffs sued the Hunter Water Corporation (HWC), a corporation created by the Hunter Water Act 1991 (NSW) (the HWA).
In September 2017, a water main owned by HWC, located above the townhouse complex, unexpectedly burst. The previous day, HWC had excavated the surrounding soil and left it exposed overnight. When the pipe failed, water flowed downhill into the complex, flooding and damaging the 119 properties. A similar incident had occurred in 2010 when the same main burst approximately 90 metres away, causing comparable flooding.
The plaintiffs sued HWC in nuisance and negligence, seeking compensation for not only property damage but also for diminished property values due to the stigma of flooding and for increased insurance premiums. While HWC accepted ownership of the main and that flooding occurred, it denied liability.
The claim in negligence fell for consideration under the Civil Liability Act 2002 (NSW) (the CLA). HWC admitted that it owed a duty of care to the plaintiffs, the breach of which was to be gauged according to the general principles set out in section 5B of the CLA, with causation assessed under section 5D and section 5E, placing the onus of proving that causation on the plaintiffs.
HWC denied it was liable in nuisance or negligence and relied on sections 42 and 43A of the CLA in defence of the negligence claim.
Section 42 of the CLA dictates the principles that apply 'in determining whether a public or other authority has a duty of care or has breached a duty of care in proceedings for civil liability…'
Section 43A of the CLA applies to 'Proceedings against public or other authorities for the exercise of special statutory powers.' The section impacts the assessment of negligence so that any breach of 'a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power'.
The decision at trial
The parties were generally agreed as to the necessary ingredients for the establishment of a nuisance. The plaintiffs had to establish that:
- there was an interference with the use and enjoyment of their land,
- the interference was caused by the water emanating from HWC’s water main, and
- whether the actions of HWC were reasonable.
HWC conceded that there was an interference with the plaintiffs’ use and enjoyment of their land. HWC also conceded that the interference had been caused by the water emanating from the HWC’s water main.
However, it was the third element on whether HWC acted reasonably that was at issue at trial. HWC argued that its actions were part of a legitimate activity and it had taken reasonable care to avoid causing a nuisance. It therefore submitted that it was not liable in nuisance.
The plaintiffs contended that for the purpose of a nuisance claim, it was not a defence to show that a party had taken reasonable care to avoid causing a nuisance. They referred to the following principles derived from existing authorities:
- 'When determining whether a claim of private nuisance has been made out, it is necessary to ask whether a particular use is "reasonable according to the ordinary uses of mankind living in society, or more correctly in a particular society". It does not follow from the fact that a defendant has established that a use is being undertaken with reasonable care that there can be no nuisance.'1
- 'It is no answer to say that the defendant is only making a reasonable use of his property, because there are many trades and many occupations which are not only reasonable, but necessary to be followed, and which still cannot be allowed to be followed in the proximity of dwelling-houses, so as to interfere with the comfort of their inhabitants.'2
- 'The duty to a neighbour is not merely to take care so as to avoid causing a nuisance. Their duty is to abstain from causing one at all.'3
The Court found in favour of the plaintiffs. It observed that 'the reasonableness of a use is conceptually distinct from the reasonableness of a defendant’s conduct.'4 It noted that, in balancing the interests of the two parties:
The Court ruled that though the use was reasonable, HWC could only succeed if it did nothing wrong. Doing nothing wrong would require the Court to find that the burst was inevitable, not foreseeable and was not consequent upon any unreasonable act on the part of HWC.
The Court made the following findings:
- The excavation of the ground above the pipe and it being left uncovered by HWC were major factors in the bursting of the pipe. The bursting of the pipe was therefore not inevitable.
- The pipe failure relevant to these proceedings occurred only 50 meters downhill from the pipe failure in 2010. It was therefore foreseeable that it could occur again.
- HWC should not have left the pipe exposed overnight without shutting off, diverting the water flow or reducing the pressure in the pipe. This was an unreasonable act.
The Court additionally found that sections 42 and 43A of the CLA did not extend to nuisance claims.
With regard to the negligence claim, however, the Court noted that section 43A imposed a much higher standard than the common law nuisance claim. It ruled that unless the conduct was so unreasonable that no authority could consider it proper, liability would not attach. The Court found in favour of the defendant for the negligence claim.
Implications for you
The statutory protections afforded by the CLA to public authorities in NSW will not extend to cover actions pertaining to nuisance. The case provides some clarification on the elements of nuisance, particularly referrable to the defendant’s conduct and what must be proved in order to succeed / defend a claim in negligence.
The spotlight on a public authority’s liability in nuisance or negligence is likely to remain for some time with reports of class actions against Port Stephens Council,6 Northern Rivers Council,7 and reportedly also Transurban or Transport for NSW following flooding in Redfern.8 ('As floodwaters surged into her Redfern home, Jacqui knew just what to do', Sydney Morning Herald, 18 September 2025).
The Owners — Strata Plan No 16460 v Hunter Water Corporation [2025] NSWSC 1029
1 Elston v Dore [1982]
HCA 71, citing Sedleigh Denfield v O’Callaghan [1940] AC 880 at 903 –904.
2 Munro v Southern Dairies Ltd [1955] VLR 332 at 336.
3 Pwllbach Colliery Co Ltd v Woodman [1915] AC 634 at 638.
4 The Owners — Strata Plan No 16460 v Hunter Water Corporation [2025] NSWSC 1029 at 146.
5 Richard Buckley, The Law of Negligence and Nuisance (7th ed, 2025) at 299.
6 'Salt Ash locals to launch class action against Port Stephens Council', NBN News, 10 September 2025.
7 Northern Rivers Class Action, Gerard Malouf & Partners (webpage: https://www.gerardmaloufpartne...).
8 'As floodwaters surged into her Redfern home, Jacqui knew just what to do', Sydney Morning Herald, 18 September 2025.
