INSIGHTS: Nuisance Liability Under the Civil Liability Act 2002 (NSW)

The Owners – Strata Plan No 16460 v Hunter Water Corporation [2025] NSWSC 1029

Key takeaways

• Sections 42 and 43A of the Civil Liability Act 2002 (NSW) (CLA) provide protections to authorities in negligence claims; however, such protections do not extend to nuisance claims.
• A public or other authority may be liable in nuisance, even if their conduct does not breach the higher standard of care required under section 43A in a negligence claim.

Background

On 10 September 2025, the Supreme Court of New South Wales delivered its judgment in The Owners – Strata Plan No 16460 v Hunter Water Corporation [2025] NSWSC 1029.

The proceedings were brought by an Owners Corporation and 118 individual townhouse owners (the Plaintiffs) against Hunter Water Corporation (the Defendant), alleging that flooding within their strata complex due to a burst water main, constituted a nuisance and resulted from the Defendant’s negligence.

The Plaintiffs sought damages for physical property damage and the reduction in property value due to reputational harm. The Defendant denied liability.

Facts

On 3 August 2017, the Defendant was notified of a leak in a water main and began investigating pipes DN 500, DN 600, and DN 1200, in an effort to determine the source of the leak. While the leak was initially thought to be from DN 600, it was discovered on 21 September 2017 that the source was DN 500.

The Defendant excavated soil above DN 500 but left the pipe exposed and active overnight. At about 3:27 am on 22 September 2017, the pipe burst and caused significant flooding throughout the complex. This was not the first incident – the pipe had previously burst on 3 March 2010, about 90 metres from the 2017 failure, due to corrosion.

The Plaintiffs argued that the water main should have been shut off, or had its flow diverted or reduced, before its failure. This was supported by the fact that DN 600 and DN 1200 formed part of a redundancy system, meaning DN 500 could have been shut off without affecting supply.

While their reasoning varied, three of the four experts engaged (who were the only experts to give oral evidence in the proceedings) agreed that a major factor in the pipe bursting was it being left uncovered after excavation.

Legal Findings

Negligence

Applying section 5B of the Civil Liability Act 2002 (NSW) (CLA), which sets out the general principles for determining negligence, the Court found:

• the risk of failure was reasonably foreseeable, especially given earlier condition reports
• the risk was not insignificant, as evidenced by the impact of the 2010 burst, and
• a reasonable authority would have taken precautions, particularly since shutting off the pipe would have involved minimal burden (given the redundancy system).

Section 42 of the CLA, which also forms part of the negligence framework, sets out principles for determining whether an authority owes or has breached a duty of care. It requires courts to consider factors such as the authority’s limited resources, competing functions, and its compliance with general procedures and standards.

Additionally, section 43A of the CLA imposes a higher threshold for liability where an authority is exercising a “special statutory power”. In such cases, liability only arises where the conduct is so unreasonable that no authority could regard it as a reasonable exercise of power.

In this case, the Court found that section 43A was applicable, and determined that although the Defendant’s “fix it when it breaks” approach was less than ideal, it fell within the range of what a reasonable authority could adopt. Consequently, the negligence claim failed.

Nuisance

Critically, the Court confirmed the principle established in Transport for NSW v Hunt Leather Pty Ltd; Hunt Leather Pty Ltd v Transport for NSW [2024] NSWCA 227, that protections under sections 42 and 43A of the CLA do not extend to claims in nuisance.

The Defendant conceded there was an interference with the Plaintiffs’ use and enjoyment of their properties, and that the interference was caused by the burst water main. To defend the nuisance claim, the Defendant therefore had to establish that it “did nothing wrong”. The Court noted this would require findings that the burst water main was inevitable, not foreseeable, and not caused by any unreasonable act or omission.

The Court concluded the Defendant acted unreasonably in leaving the pipe exposed and active overnight. It noted the Defendant was aware that pressure in the pipe increased during the early morning hours, and that it was reasonably foreseeable that a defect in the pipe would be exposed by excavation of the soil above it. It was also relevant that the redundancy system was available, meaning the pipe could have been shut off with little consequence.

Outcome

The Court held the Defendant was liable in nuisance, and awarded the Plaintiffs $1,161,841.92 in agreed damages for physical property damage.

The claim for reduction in property value was rejected, as expert evidence did not support a loss in market value due to reputational harm.

Conclusion

The decision reinforces the distinction between negligence and nuisance in the context of public authority liability under the CLA. While sections 42 and 43A can offer significant protections to public authorities in negligence claims, those protections do not extend to nuisance claims.

The table below highlights the key legal distinctions between nuisance and negligence as applied in this case.

Further information

This article was written by Law Graduate Sophia Kozlowski and reviewed by Principal Drina Govic. For further information or advice on any related matters, please contact Drina.

Disclaimer: This information is current as of September 2025. This article does not constitute legal advice and does not give rise to any solicitor/client relationship between Meridian Lawyers and the reader. Professional legal advice should be sought before acting or relying upon the content of this article.