Adero Law principal Andrew Chakrabarty at a light rail construction site in the city. Photo: Ian Bushnell.
With construction of light rail Stage 2A ramping up, the ACT Government may face a class action from businesses that say the project has decimated their trade.
Businesses earlier in the year had discussed the idea, inspired by events in NSW, and the prospects of local action appear to have firmed.
Adero Law lawyer Andrew Chakrabarty is leading the investigation into whether a class action based on ‘nuisance’ will be mounted to seek compensation from the government for loss of income.
Mr Chakrabarty said there were about 10 businesses interested in joining a potential action, but at this stage, he was doing due diligence.
He said many had already formally signed up.
“It’s been just over a month since we started our diligence and investigation, so it’s good numbers at this stage and obviously in the meantime, we’ve also been in touch with businesses that have gone under as well,” Mr Chakrabarty said.
He said at least two businesses had been forced to close their doors due to the light rail works.
“These are businesses that were doing phenomenally, let’s say this time last year, and even before the fences for the light rail went up, so clearly, the [commercial] concept of each of those businesses did work,” Mr Chakrabarty said.
“It’s just simply a reduction in foot traffic that has led to this.”
He said it could not be attributed to the cost-of-living crisis and fewer people spending as cafes in the streets next to the fencing were struggling more than those situated in offices and further away.
“If it were in fact the cost-of-living crisis causing this issue, all cafes would be impacted the same way, but that is not the case,” he said.
“The closer you are to the light rail, the more adversely you are impacted.”
While most businesses were hospitality-based, not all were, and even Adero had been impacted.
“I was just talking to my receptionist as well, and she was saying ‘I have never had to give the directions to our office as many times as I had to give in the last, let’s say 10 or 11 days simply because people are finding it harder to even reach our office because half the roads are closed, people can’t drive in,'” Mr Chakrabarty said
That had also affected Uber drivers, who wouldn’t even take orders from restaurants because it’s so difficult to drive in. The drive time had increased by seven to eight minutes each way to and from businesses.
Fenced of London Circuit where light rail construction is under way. Photo: Michelle Kroll.
Mr Chakrabarty said the ‘nuisance’ arguments centred on the fact that building light rail is not a reasonable use of the land, and the government is duty-bound to take steps to mitigate the loss and damage that businesses are facing as a result of this infrastructure build.
He said the steps taken by the government were out of step with the actual problem and plight that these businesses were facing, including consultation that left businesses to work it out for themselves.
Government should be able to means test businesses and work out how much they have been financially impacted over the affected trading period, similar to what occurred during COVID.
“It is harsh to say that as a government we will continue to collect all our taxes, there is no redemption, there cannot be a detriment to our revenue but if you are a business owner and your revenue is inflicted, well, here’s some free parking and CCTV cameras to help you out,” Mr Chakrabarty said.
“How is that a solution?”
The government is about to launch a major advertising campaign to alert Canberrans that City West is still open for business, but Mr Chakrabarty doubted this would be enough.
“What is the government doing to increase foot traffic, and what is the government doing to help businesses survive?
“Those are the two important questions and I’m not sure advertising will get us a lot of the way there.”
Mr Chakrabarty said no one was saying light rail shouldn’t happen and businesses understood that when it’s up and running it would enhance foot traffic and business flow, but what mattered was how the government met its obligations to help businesses survive until then.
He was monitoring the current High Court case over the NSW light rail class action, which was successful in the NSW Supreme Court but overturned on appeal. The outcome would likely colour any local action.
The government has previously rejected calls for financial compensation, instead offering fee relief, improvements to parking and wayfinding, and the advertising campaign.
A government spokesperson said the government could not comment on the specifics of current cases before the courts, or any current or potential legal action relating to light rail.
“We remain committed to supporting businesses along the light rail corridor as outlined in our businesses partnership plan,” the spokesperson said.
“The government is in the final stages of implementing a campaign and activation plan for businesses in City West.
“This campaign and associated works have been developed in consultation with businesses through the city construction information group.”
