Black Hill Residents Group Incorporated - INC1900196 v Marist Youth Care Limited

Judgment

1. In Black Hill Residents Group Incorporated v Marist Youth Care Limited (t/as Marist180) (No 5) [2021] NSWLEC 43 ("Black Hill No 5") I dismissed the Applicant's second further amended summons seeking a declaration that the establishment of an intensive therapeutic transitional care (ITTC) facility by the First Respondent Marist Youth Care Limited (t/as Marist180) (Marist) at a property in Black Hill (the property) required development consent under the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act). Costs were reserved. The ITTC facility was conducted on behalf of the Minister, the Second Respondent. The issue of costs in the overall proceedings including in relation to numerous interlocutory matters remains outstanding.
2. The Applicant is an incorporated association registered on 13 February 2019. Marist is seeking that its costs be paid by the Applicant. The Minister is not seeking costs from the Applicant. Marist no longer presses a costs claim against the Minister.
3. Under s 98 of the Civil Procedure Act 2005 (NSW) (CP Act) costs are at the discretion of the Court subject to any court rules. Under r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) costs follow the event, subject to the exercise of the Court's discretion. Rule 42.1 of the UCPR applies in the Court in Class 4 proceedings pursuant to r 1.5 and Sch 1 Col 2 of the UCPR. The Applicant relies on r 4.2(1) of the Land and Environment Court Rules 2007 (NSW) (LER) which states: 4.2 Proceedings brought in the public interest (1) The Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest.
4. At issue in the substantive proceedings was whether development consent under the EPA Act was required for the operation of an ITTC facility carried out on behalf of the Minister at the property.
5. Clause 43(1) of the State Environmental Planning Policy (Affordable Rental Housing) 2009 (ARH SEPP) stated: Part 2 New affordable rental housing … Division 7 Group homes … 43 Development in prescribed zones (1) Development for the purpose of a permanent group home or a transitional group home on land in a prescribed zone may be carried out - (a) without consent if the development does not result in more than 10 bedrooms being within one or more group homes on a site and the development is carried out by or on behalf of a public authority, or (b) with consent in any other case.
6. Transitional group home was defined in cl 42 of the ARH SEPP as: Part 2 New affordable rental housing … Division 7 Group homes 42 Definitions (1) In this Division - … prescribed zone means - (a) any of the following land use zones or a land use zone that is equivalent to any of those zones - (i) Zone R1 General Residential, (ii) Zone R2 Low Density Residential, (iii) Zone R3 Medium Density Residential, (iv) Zone R4 High Density Residential, (v) Zone B4 Mixed Use, (vi) Zone SP1 Special Activities, (vii) Zone SP2 Infrastructure, and (b) any other zone in which development for the purpose of dwellings, dwelling houses or multi dwelling housing may be carried out with or without consent under an environmental planning instrument. transitional group home means a dwelling - (a) that is occupied by persons as single household with or without paid supervision or care and whether or not those persons are related or payment for board and lodging is required, and (b) that is used to provide temporary accommodation for the relief or rehabilitation of people with a disability or for drug or alcohol rehabilitation purposes, or that is used to provide half-way accommodation for persons formerly living in institutions or temporary accommodation comprising refuges for men, women or young people, but does not include development to which State Environmental Planning Policy (Housing for Seniors or People with a Disability) 2004 applies.
7. The Applicant alleged firstly that the activity was not correctly characterised as a transitional group home as defined in cl 42(1) of the ARH SEPP and was not therefore permitted by cl 43(1)(a). Secondly, that the activity was not being carried out on behalf of a public authority for the purposes of cl 43(1)(a) of the ARH SEPP.
8. The ITTC facility was being carried out at the property which was zoned E4 Environmental Living (E4 zone) under the Newcastle Local Environment Plan 2012 (Newcastle LEP). The objectives of the E4 zone are: Part 2 Permitted or prohibited development … Land Use Table … Zone E4 Environmental Living 1 Objectives of zone • To provide for low-impact residential development in areas with special ecological, scientific or aesthetic values. • To ensure that residential development does not have an adverse effect on those values. • To conserve the rural or bushland character and the biodiversity or other conservation values of the land. • To provide for the development of land for purposes that will not, or will be unlikely to, prejudice its possible future development for urban purposes or its environmental conservation.
9. Dwelling houses are permitted with consent in the E4 zone. The definition of "prescribed zone" (b) for the purposes of cl 43 of the ARH SEPP includes the E4 zone as houses are permitted. The house on the property had less than 10 bedrooms, comprising four bedrooms, two lounges, one rumpus room, one kitchen and three bathrooms (Black Hill No 5 at [37]). It required minimal modification to render it fit for the purpose of an ITTC facility (Black Hill No 5 at [3], [25]). Additional work undertaken was filling in a dam and putting up new fencing (Black Hill No 5 at [25]).
10. The Applicant was unsuccessful in arguing that the activity ought to be characterised as "hospital", "health services facility" or "office premises", being defined terms in the Newcastle LEP. I held in Black Hill No 5 at [142] that the activity could be characterised as a transitional group home, operating as a refuge providing temporary accommodation for vulnerable young people and was permissible in the E4 zone.
11. The Applicant was also unsuccessful in arguing that the ITTC facility was not being carried out on behalf of the Minister. Both Marist and the Minister submitted that the activity was being carried out on behalf of the Minister, a compelling submission which I found was also supported by the evidence (Black Hill No 5 at [144]-[150]). The statutory care and protection of young persons scheme under the Children and Young Persons (Care and Protection) Act 1998 (NSW) and the Children and Young Persons (Care and Protection) Regulation 2012 was considered at some length in answering the issues raised in Black Hill No 5 at [134], [136], [147] and [149].
12. As the Applicant was unsuccessful no declaration was made and no order restraining the use of the property as sought in the second further amended summons was made. The Applicant read five lay witness affidavits said to be relevant to the exercise of the Court's discretion, which did not ultimately arise for consideration. The affidavits attested to concerns about excessive traffic movements near the property, noise and privacy concerns, summarised in Black Hill No 5 at [18]-[22]. I consider these are relevant on the question of public interest in this judgment.

History of proceedings including numerous reserved costs orders

1. On 22 May 2019 the substantive proceedings were commenced by way of summons.
2. On 31 May 2019 the Applicant filed a notice of motion dated 31 May 2019 seeking leave to rely upon an amended summons. On 6 June 2019 Robson J granted the Applicant leave to rely upon the amended summons. His Honour noted Marist's undertakings to the Court in relation to the property, made further orders for the management of proceedings and ordered that "costs of all interlocutory proceedings prior to and on the date of the orders were to be costs in the cause".
3. On 29 July 2019 Marist filed a notice of motion dated 29 July 2019 seeking to set aside the Applicant's further notice to produce dated 26 July 2019.
4. On 6 August 2019 in Black Hill Residents Group Incorporated v Marist Youth Care Limited [2019] NSWLEC 112 ("Black Hill No 1") Marist's notice of motion dated 29 July 2019 was considered. Robson J made orders reproduced below: 1. Notice to Produce issued by Black Hill Residents Group Incorporated - INC1900196 to Marist Youth Care Limited (Trading as MARIST180) dated 26 July 2019 is to be amended as follows: (a) Category (2) is to read "Records identifying the qualifications of any Staff Member who entered the Premises during the Period." (b) Category (3) is struck out. (c) Access to documents produced by Marist Youth under categories (2) and (4) will be restricted pursuant to a confidentiality undertaking to be agreed between the parties (and failing such agreement to be settled by the Court). 2. Confirm that the meaning of each of "Document", "Premises", "Staff Member" and "Period" remain as per the Notice to Produce. 3. Costs reserved.
5. The first hearing on the substantive matter was set down for 19 and 20 August 2019 before me. On 13 August 2019 shortly before the hearing was to commence on 19 August 2019, a "Review of Environmental Factors" (REF) was completed by SJB Planning (NSW) Pty Limited in relation to the activity on the property at the request of the Minister. The Minister gave notice to the Applicant on 5 July 2019 that a REF was being prepared. On 16 August 2019 the Executive Director of the (former) Department of Family and Community Services NSW considered the REF complied with the obligations of a determining authority pursuant to s 5.5(1) of the EPA Act and approved "the ongoing use of the Black Hill ITTC subject to the conditions proposed in the REF". On 16 August 2019 the Applicant filed a notice of motion to vacate proceedings. On 19 August 2019 the hearing was vacated by consent. The orders I made on 19 August 2019 were: The Court makes the following orders: 1. Vacate the hearing dates (19 and 20 August 2019 in this matter). 2. Discharge the interlocutory undertakings given by the First Respondent to the Court on 6 June 2019. 3. Order that, despite any earlier order of the Court or undertaking given to the Court: (a) the Applicant and its legal and expert representatives are permitted to reveal the contents of the documents contained at Tabs 2 and 31 of the Evidence Book and the Joint Report dated 16 August 2019 (not including its confidential exhibits) to representatives of the Applicant for the purposes of giving advice and taking instructions relating to these proceedings; and (b) sub-paragraph (a) above does not operate to permit the legal and expert representatives of the Applicant to give copies of the documents contained at Tabs 2 and 31 of the Evidence Book and the Joint Report dated 16 August 2019 (not including its confidential exhibits) to any person (other than the legal and expert representatives of the Applicant), including the representative of the Applicant. 4. The notice to produce issued by the Applicant to the Second Respondent on Friday 16 August 2019 is stood over to 23 August 2019 before the Registrar. 5. The proceedings are stood over for mention to Friday 30 August 2019 in the list. 5A Any further amended summons to be filed and served by 28 August 2019. 6. Costs are reserved. 7. Liberty to restore on three days' notice.
6. On 26 August 2019 Marist filed a notice of motion dated 26 August 2019 seeking expedition.
7. On 29 August 2019 the Applicant filed a further amended summons deleting the ground alleging failure to carry out an assessment under Pt 5 of the EPA Act referred to in the amended summons. On 30 August 2019 Robson J made orders by consent as follows: 1. Deleted. 2. The matter is fixed for final hearing on 18, 19, 20 December 2019. 3. The Applicant is granted leave to rely on the Further Amended Summons. 4. The First Respondent is to file any response to the Further Amended Summons by 5 September 2019. 5. The Second Respondent is to file any response to the Further Amended Summons by 9 September 2019 (two days after the First Respondent). 6. Costs thrown away by the amendments made by the Applicant's (now Further) Amended Summons are to be reserved. 7. The Applicant is to serve a list of all affidavits and reports it proposes to rely on in the case (identifying any paragraphs that are not to be read) by 20 September 2019. 8. The First Respondent is to serve a list of all affidavits and reports it proposes to rely upon in the case (identifying any paragraphs that are not to be read) by 27 September 2019. 9. The Second Respondent is to serve a list of all affidavits and reports it proposes to rely upon in the case (identifying any paragraphs that are not to be read) by 4 October 2019 (two days after the First Respondent). 10. The parties are to confer and prepare the following documents by 11 October 2019 (a) Deleted. (b) Any statement of facts able to be agreed between the parties. (c) An agreed chronology or, failing agreement, the parties' respective chronologies. (d) Deleted. 11. The Applicant is to file and serve a summary of their argument (not exceeding 10 pages) by 18 October 2019. 12. The First Respondent is to file and serve a summary of its argument (not exceeding 10 pages) by 25 October 2019. 13. The Second Respondent is to file and serve a summary of its argument (not exceeding 10 pages) by 30 October 2019 (two days after the First Respondent). 14. The Applicant is to file and serve a summary of their argument in reply (not exceeding 5 pages) by 6 November 2019. Security for costs 15. The First Respondent's Notice to Produce is returnable on 3 September 2019. 16. The Applicant is to electronically produce to solicitors for the First and Second Respondent, the documents produced under the Notice to Produce. 17. The First Respondent is to file any motion for security for costs by 4 September 2019 which is to be returnable on 6 September 2019.
8. On 5 September 2019 Marist filed a notice of motion dated 4 September 2019 seeking orders pursuant to UCPR r 42.21 that the Applicant provide security for Marist's costs.
9. On 24 September 2019 Marist's notice of motion filed on 26 August 2019 seeking expedition was withdrawn. Robson J made no order as to costs.
10. On 27 September 2019 Black Hill Residents Group Incorporated v Marist Youth Care Limited (No 2) [2019] NSWLEC 137 ("Black Hill No 2") was delivered. Robson J ordered at [64] that: 1. The first respondent's notice of motion filed 4 September 2019 seeking security for costs is upheld. 2. Pursuant to r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW), Black Hill Residents Group Incorporated is to provide security for costs of Marist Youth Care Limited (Trading as MARIST180) in the amount of $40,000 in the following tranches: (a) the first tranche of $20,000 to be paid on or before 31 October 2019; and (b) the second tranche of $20,000 to be paid on or before 29 November 2019, in a form acceptable to the Registrar. 3. The proceedings be stayed permanently or until further order of the Court if security is not provided in accordance with Order (2) above. 4. Costs of the motion reserved. 5. The substantive matter is stood over to 9.00am on 6 December 2019 for pre-trial mention.
11. On 25 November 2019 the Applicant's then solicitor ceased to act.
12. On 11 December 2019 the Applicant filed a notice of motion dated 11 December 2019 seeking an order pursuant to s 63 of the Land and Environment Court Act 1979 (NSW) that leave be granted to Mr Adam Fairbairn and Mr Philip Clulow to represent the Applicant in these proceedings and such other orders as the Court deemed fit. On 13 December 2019 I made the following orders: 1. Leave is granted for Mr Fairbairn to act as agent for the Applicant in these proceedings. 2. The Applicant's notice of motion dated 11 December 2019 is dismissed. 3. The matter is stood over to 10:00AM 17 December 2019.
13. On 17 December 2019 leave was granted to the Applicant to rely on a second further amended summons.
14. On 17 December 2019 Marist filed a notice of motion dated 17 December 2019 in court seeking an order that the proceedings be dismissed as incompetently commenced, which was then heard on 18 December 2019 and subsequent days in 2020. On 18 December 2019 the substantive hearing dates for 19 and 20 December 2019 were vacated. The Applicant was not legally represented at the December 2019 hearing.
15. On 9 March 2020 the Applicant filed a notice of motion dated 3 March 2020 seeking to set aside Marist's notice to produce dated 20 February 2020.
16. On 20 March 2020 objections to the affidavit of Mr Fairbairn dated 10 February 2020 and the Applicant's notice of motion dated 3 March 2020 were heard. Judgment was reserved.
17. On 30 June 2020 in Black Hill Residents Group Incorporated v Marist Youth Care Limited (t/as Marist180) [2020] NSWLEC 82 ("Black Hill No 3") I made findings in relation to Marist's notice of motion dated 17 December 2019. No final orders were made at that stage.
18. On 6 August 2020 I made the following orders: The Court orders: Substantive hearing (1) The matter is listed before the Registrar for telephone callover on Tuesday 11 August 2020 to obtain dates for a four-day hearing before Pain J. (2) The parties are to send a proposed timetable for preparation for the hearing to Pain J Associate by 13 August 2020. Notices of motion (3) Leave is granted to the Applicant to reopen its case in response to the First Respondent's notice of motion dated 17 December 2019 (the Competency Motion) to read the Affidavit of Adam Fairbairn sworn 27 July 2020. (4) The Applicant's notice of motion submitted by email dated 3 March 2020 seeking to set aside the First Respondent's Notice to Produce dated 20 February 2020 is dismissed with each party to pay its own costs. (5) Liberty to apply on two days' notice.
19. On 11 August 2020 hearing dates of 20-23 April 2021 were allocated to the substantive matter (on 9 December 2020 these were varied to 19, 20 and 21 April 2021).
20. On 3 September 2020 without admission, Marist withdrew its notice of motion dated 17 December 2019, the subject of Black Hill No 3. Costs of the notice of motion dated 17 December 2019 were reserved.
21. On 3 November 2020 the Applicant appointed a solicitor to act on its behalf.
22. On 25 November 2020 a mention was held and orders made on 3 September 2020 were varied by consent. By consent I ordered the Applicant to pay Marist's and the Minister's costs of the mention.
23. On 7 December 2020 the Applicant filed a notice of motion dated 7 December 2020 seeking leave to file a third further amended summons.
24. On 21 January 2021 the Applicant filed a notice of motion dated 21 January 2021 seeking to set aside a notice to produce filed on behalf of Marist on 24 December 2020. The parties resolved the motion by 1 February 2021.
25. On 1 February 2021 the Applicant's notice of motion dated 7 December 2020 was heard. On 12 February 2021, in Black Hill Residents Group Incorporated v Marist Youth Care Limited (t/as Marist180) (No 4) [2021] NSWLEC 11 ("Black Hill No 4") I dismissed the Applicant's notice of motion dated 7 December 2020. Costs were reserved.
26. On 19 April 2021 the Minister filed a notice of motion dated 18 April 2021 which was withdrawn on 21 April 2021.
27. On 19-21 April 2021 the substantive matter was heard.
28. On 17 May 2021 Black Hill No 5 was decided as outlined above in [1], with costs reserved.

Principles on costs concerning public interest claims

1. In Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280; [2010] NSWLEC 59 ("Caroona") (summarised in Local Democracy Matters Inc v Infrastructure NSW; Waverley Council v Infrastructure NSW (No 4) [2019] NSWLEC 140 ("Local Democracy No 4") at [6]-[9]), Preston CJ identified a three step approach to determine whether to depart from the usual costs rule in certain proceedings (at [13]-[20]) as follows: 1. first, can the litigation be characterised as having been brought in the public interest; 2. second, if so, is there "something more" than the mere characterisation of the litigation as being brought in the public interest; and 3. third, are there any countervailing circumstances, including those relating to the conduct of the applicant, which speak against a departure from the usual costs rule in respect of public interest litigation.
2. In relation to the first step, Preston CJ in Caroona endorsed the following summary in Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) (2004) 136 LGERA 365; [2004] NSWLEC 434 ("Engadine") at [15] of the factors that assisted in determining whether litigation could properly be characterised as having been brought in the public interest: 1. whether the public interest was served by the litigation; 2. whether that interest was confined to a relatively small number of members from the group or association in the immediate vicinity of the development, or whether the interest was wider, involving a significant number of members of the public and was concerned with a wider and significant geographic area; 3. whether the applicant sought to enforce public law obligations; 4. whether the prime motivation of the litigation was to uphold the public interest and the rule of law; and 5. whether the applicant had a pecuniary interest in the outcome of the proceedings.
3. In Caroona at [60], at least five categories of cases containing additional factors (the "something more"), were identified namely whether: 1. the litigation raised one or more novel issues of general importance; 2. the litigation contributed, in a material way, to the proper understanding, development or administration of the law; 3. the litigation was brought to protect the environment or some component of it, and the environment or component was of significant value and importance; 4. the litigation affected a significant section of the public; and 5. there was no financial gain for the applicant in bringing the proceedings.
4. In relation to the third step, the following are some of the countervailing circumstances that may weigh in favour of the application of the usual costs rule (Caroona at [61]): 1. the applicant was seeking to vindicate rights of a commercial character and stood to benefit from the litigation; 2. where the applicant was an incorporated association, the private interests of members of the association would have been affected, legally or financially by the outcome of the litigation; 3. the applicant was supported financially by persons or bodies who benefited from, or would have had their legal or financial interests affected by, the outcome of the litigation; 4. the narrowness of the question of public interest raised, such as only involving a discrete point of interpretation without broad ramifications; 5. the applicant unreasonably pursued or persisted with points which had no merit or issues that were not eminently arguable; and 6. there was disentitling conduct of the applicant, such as impropriety or unreasonableness in the conduct of the litigation.

Marist's submissions

1. Marist seeks the following orders: 1. The Applicant is to pay Marist's costs of the proceedings (including any of its costs of applications which have been reserved and the costs of obtaining these costs orders) as agreed or assessed, excepting Marist's costs thrown away in relation to the Applicant's claim that the Minister breached s 5.5 of the EPA Act. 2. The $40,000 held by the Court paid by the Applicant as security for Marist's costs is to be released to Marist forthwith.
2. Marist has been successful and should be awarded its costs payable by the Applicant. There is no proper reason why costs of the substantive proceedings should not follow the event.
3. All four reserved costs decisions on 6 August 2019 in Black Hill No 1, on 27 September 2019 in Black Hill No 2, on 3 September 2020 following Black Hill No 3 and on 12 February 2021 in Black Hill No 4 should follow the overall event in the proceedings so that the Applicant should pay these also.
4. Costs were reserved on 6 August 2019 for a notice of motion filed by Marist to set aside the further amended notice to produce dated 26 July 2019 that had been served by the Applicant. The motion was determined by Robson J by his judgment recorded in Black Hill No 1. Substantial parts of the notice to produce were struck out, with other provisions in the notice curtailed.
5. On 27 September 2019, Black Hill No 2 made the orders extracted above in [22] in answer to Marist's successful application for security for costs.
6. On 3 September 2020, Black Hill No 3 found that the proceedings were not commenced competently by the Applicant and gave the Applicant the opportunity to ratify the proceedings (Black Hill No 3 at [124]).
7. On 12 February 2021, Black Hill No 4 dismissed the Applicant's notice of motion seeking leave to file a third further amended summons.
8. The costs of this costs application should also be payable by the Applicant.

No departure from usual rule is warranted

1. The proceedings were not brought in the public interest such that the Court should depart from the usual rule. Relevant observations were made by Robson J in Black Hill No 2 at [49], [56], [57], [63] as follows (emphasis added): 49 Further, although not determinative, the mere fact that Black Hill is a not-for-profit association does not give it free reign to bring proceedings without regard to the detriment which those proceedings may cause to a respondent such as Marist Youth in the event it is unable to meet an adverse costs order. … 56 Although Ms Mee made submissions as to the "significant public importance" of the subject matter of the case, and while I accept that there may be implications for existing and future developments of a not dissimilar nature, I do not find that these proceedings may properly be characterised as public interest proceedings sufficient to displace a security for costs order (if one was otherwise appropriate). While I accept that Black Hill is raising matters that involve the public interest, I do not consider that this of itself would mean that it would not be ordered to pay costs in the event that it is unsuccessful at the hearing. 57 I consider that r 4.2(2) of the LEC Rules is but one factor, amongst others, the Court takes into account in the exercise of its discretion. I do not consider that the requisite public interest is served by this litigation so as to trigger the discretion under r 4.2(2) of the LEC Rules to refuse to make a security for costs order because: first, I consider that the primary interest of Black Hill (and its members) relates to the planning consequences of the use of the premises; and second, there is little evidence of concerns extending beyond these planning impacts. … 63 Although Black Hill has not been successful in resisting an order for security for costs and although for the purpose of considering the application for security, I am of the preliminary view that these proceedings do not constitute public interest proceedings, I have not heard detailed argument on that particular question and in the circumstances, I reserve costs of the Motion.
2. Robson J concluded that a security for costs order ought to be made in the amount of $40,000. No further evidence has been adduced to warrant a change to this preliminary view. The admitted lay evidence does not suggest any interest extending beyond the interests of the Applicant's members to avoid what they considered were the planning impacts of the ITTC facility on their enjoyment of their private properties.
3. The Applicant's members have a pecuniary interest in the outcome of the proceedings, being to protect their investment in the properties. Submissions filed by the Applicant's solicitor and signed by the Applicant's senior counsel dated 22 January 2021 for the substantive hearing stated at [17(e)]: "The Applicant brings these proceedings in order to protect the interest of property owners within close proximity to the subject land."
4. The proceedings are not in the public interest and even if found to be, no "something more" as identified in Caroona arises. That the Applicant's case raised four separate legal grounds which were complex and involved sophisticated legal argument is not sufficient, as identified in Local Democracy Matters Incorporated v Infrastructure NSW (No 2) [2019] NSWCA 118 at [12].
5. The Applicant's interest is confined to a relatively small number of members and those said to be affected by the facility was limited. No impact beyond a planning impact on adjoining neighbours was identified in the lay evidence. This matter is entirely unlike Local Democracy No 4.
6. The prime motivation of the litigation was to prevent feared impacts on private properties.
7. Facilitating an appeal by not making a costs order in Marist's favour is not relevant even if public interest is found to exist. Costs concern the proceedings in which Marist was successful.

Costs of Black Hill No 3 (hearing on competency)

1. The Applicant seeks to avoid paying the costs of Marist's challenge to the competency of the Applicant's claim on the basis that the application was "determined in favour of the Applicant".
2. That submission is wrong. The Court did find that the proceedings had been commenced incompetently because of the finding in Black Hill No 3 at [151] that: "The necessary ratification of the decision to commence these proceedings has yet to be made by the committee of BHRG Inc."
3. Consequent upon what the Court described in Black Hill No 3 at [153] as "BHRG Inc's predicament", the Court on 14 July 2020 made orders requiring the Applicant to take steps to convene a meeting of its managing committee to make a valid resolution so as to legitimise the Application. The Court ordered on 14 July 2020 that on or before 28 July 2020 the Applicant was to file and serve any evidence to be relied upon as establishing the making of a "sufficiently precise resolution ratifying these proceedings" as per Black Hill No 3 at [159].
4. The Court did not dismiss the Applicant's claim because it found in Black Hill No 3 at [154]: "a consequence of incompetently commenced proceedings is not necessarily their dismissal".
5. It was essential for the cause of incompetency to be addressed before the Court could lawfully determine the Applicant's claims. The challenge to competency was therefore an essential and appropriate step in the case. There is no reason to exclude it from the cost orders in Marist's favour.

Costs of Black Hill No 1 (motion to set aside notice to produce)

1. Similarly, the submission that "the First Respondent's application to set aside the notice to produce was unsuccessful" is wrong. The relevant motion challenged a notice to produce that had been drafted in unacceptably wide and therefore oppressive terms. It was also served late so as to add to the prejudice to Marist. The judgment of Robson J in Black Hill No 1 upheld Marist's complaints in that regard and required the schedule to be narrowed. The application was therefore successful, albeit that the Court allowed for the production of a more limited schedule of documents.

Applicant's submissions

1. The Applicant seeks orders as follows: 1. No order as to costs of Marist and the Minister. 2. The security for costs amount of $40,000 be released to the Applicant forthwith. 3. Marist pays the Applicant's costs in relation to the application to set aside the notice to produce as set out in Black Hill No 1.
2. In addition, the Applicant should not have to pay Marist's costs thrown away as a result of the adjournment of the first hearing in August 2019.
3. The Applicant submits that the ordinary rule as to costs should be displaced as the litigation should be classed as being brought in the public interest. The security for costs amount should be released to the Applicant.
4. Rule 4.2(1) of the LER provides a basis for no award for costs against an unsuccessful applicant if the Court is satisfied the proceedings were brought in the public interest. The concept of public interest is broad, see factors identified in Caroona and Millers Point Fund Incorporated v Lendlease (Millers Point) Pty Ltd (No 2) [2017] NSWLEC 29 ("Millers").
5. Firstly, there was clear public interest in this case to ensure that the respondents were establishing and operating an ITTC facility in accordance with the EPA Act. The development of ITTC services relied on an assumption that these fall within the existing legislative framework for transitional group homes which were exempt from development approval and from environmental assessment. Whether the respondents could rely on that assumption is a matter of significant public interest.
6. At issue in these proceedings was whether the ITTC facility came within the exception in cl 43 of the ARH SEPP. Marist asserted that it was entitled to carry out the development without consent. There was no transparency in this decision. It was clearly reasonable for residents to fund these proceedings in order that an independent body, the court, could determine the lawfulness of what was taking place. This was not a case in which the Applicant was challenging the validity of a development consent. It was not in dispute that under the Newcastle LEP the ITTC facility was prohibited development in the E4 zone, which applied to the subject land. Nor can it be disputed that the development was contrary to the objectives of that zone (extracted above in [8]). Plainly enough, landowners in the locality, including those who since 2012 purchased in the locality, assumed that development in the locality would continue to conform to the objectives and controls in the Newcastle LEP. The ITTC facility on the property does neither, as the evidence of the residents reveals. This was particularly reasonable given the objectives of the E4 zone.
7. Secondly, the Applicant did not stand to gain from these proceedings financially.
8. In relation to "something more" the Court in Millers took into account that complicated questions of statutory construction were raised and that the legal issues raised contributed to the proper understanding of the law. The same applied in this matter.
9. No countervailing circumstances arise. The case was conducted reasonably and properly. The Applicant had not acted in any commercial capacity or sought financial gain.
10. In Black Hill No 3 at [158] the Court did not accept that the Applicant was a vehicle for a small number of members engaged in a frolic of their own. The membership of the Applicant is broad and not limited to the immediate neighbours of the property.
11. Marist is well funded and entered into a lucrative commercial agreement with the State government to operate ITTC facilities throughout New South Wales. It can well bear its costs.
12. A costs order made against the Applicant will inevitably result in its winding up which will prevent its pursuit of an appeal.

Security for costs release

1. The $40,000 that the Applicant was required to pay in response to Marist's security for costs application is a very significant amount to the Applicant and its donors. If the Court exercises its discretion not to make a costs order against the Applicant, those funds should be released and returned to the Applicant.

Costs of adjournment of first hearing in August 2019

1. This matter has been marked by two long periods of delay. The first occurred as a result of the first adjournment of the substantive hearing in August 2019. The second was Marist's competency motion which is dealt with below in [81].
2. The first hearing was adjourned as a result of the Minister and Marist serving a REF days before the final hearing. The Applicant had incurred very significant legal costs by that time which exhausted its limited resources. The Applicant should not have to pay any of Marist's costs because of the vacation of that hearing date.

Costs of Black Hill No 3 (hearing on competency)

1. On 17 December 2019 Marist pressed a motion to dismiss the proceedings as incompetent. The issue was decided against Marist on 30 June 2020 in Black Hill No 3. The Applicant was not legally represented in that period and does not therefore seek professional costs. Marist should not have any of its costs awarded in this period given that it was unsuccessful in having the proceedings dismissed.

Costs of Black Hill No 1 (motion to set aside notice to produce)

1. In Black Hill No 1 Robson J set aside a notice to produce issued by the Applicant. Amendments to the terms of the notice to produce were required. Overall Marist was unsuccessful. Costs were reserved. The Applicant submits that a costs order should be made in its favour in relation to this notice of motion.
2. No submissions on costs of the costs application was made.

Consideration

1. In Class 4 proceedings the usual rule is that costs follow the event. Marist has been successful in the substantive proceedings and in the absence of any disentitling conduct on its part would get its costs paid by the Applicant. No such conduct arises. The Applicant seeks to resist the usual rule by relying on LER r 4.2(1).
2. That proceedings were commenced by the Applicant as an incorporated association seeking to enforce the EPA Act is not determinative that the matter is one serving the public interest. Nor is the submission that the proceedings were commenced reasonably relevant to whether the matter is public interest in nature.
3. As set out in Caroona at [21]-[26], the wide scope of public interest means that it may well be served by different parties before the Court who can all be said to be acting in the public interest. Marist on behalf of the Minister wished to carry out an ITTC facility in Black Hill. The necessity for such facilities for young people was explored in Black Hill No 5. I accepted that the use of the property was to operate as a refuge providing temporary accommodation for vulnerable young people.
4. Factors that have been considered relevant to the identification of public interest litigation do not arise in relation to the Applicant in my view. The lay evidence read at the substantive hearing summarised in Black Hill No 5 at [18]-[22] solely identifies concerns of immediate neighbours concerning traffic, noise, safety concerns and privacy impacts. Their concerns were relatively narrow relating to the protection of perceived loss of amenity to some residents in Black Hill from an activity that can be squarely considered as serving the public interest. As identified in the Applicant's submissions set out in [71] above its members were motivated in large part to ensuring that the objectives of the E4 zone were maintained as they lived in the zone.
5. Further, as Marist submitted in [55] above, the Applicant's members claimed that the activity will have an impact on their private properties. The Applicant's members therefore have an indirect pecuniary interest in the outcome of proceedings, a factor to be considered in determining whether the matter can be characterised as in the public interest: Caroona at [38(e)]; Engadine at [15]; Oshlack v Richmond River Shire Council (1994) 82 LGERA 236 at 246.
6. In Black Hill No 3 at [158] where I did not accept that Black Hill Residents Group Incorporated was a vehicle for a small number of members engaged in a frolic of their own, the context was considering the actions of the managing committee in relation to the lawful commencement of proceedings. I do not consider that my finding there has any relevance to a finding on whether the proceedings are in the public interest. I agree with Marist's submission above in [53] that the preliminary observations of Robson J in Black Hill No 1 were prescient. The Applicant was entitled to commence these proceedings. It cannot avoid the consequence of a costs order however by characterising itself as acting in the public interest under LER r 4.2(1). None of the factors identified in Caroona, Engadine, Millers or Local Democracy No 4 are able to support a finding of public interest.
7. This addresses the costs outcome for Black Hill No 5, the substantive proceedings, in relation to which Marist's costs ought to be paid by the Applicant. That Marist was the successful party is also relevant to the determination of costs in a number of the interlocutory proceedings where costs were reserved.
8. Before considering these additional matters I observe that the award of costs is compensatory not punitive: Latoudis v Casey (1990) 170 CLR 535; [1990] HCA 59 at 543. That the Applicant is concerned that it will not be able to progress an appeal if it is wound up following the making of any costs order against it is not relevant to whether Marist should be compensated for its participation in these proceedings. That Marist has more resources than the Applicant, which the Applicant asserts, is also an irrelevant consideration.
9. In relation to the vacation of the first hearing which was to commence on 19 August 2019 given that the actions of the Minister resulted in that vacation no basis to require the Applicant to pay Marists' costs thrown away exists. That is a matter best determined as between the two Respondents. No order for costs will be made in relation to that vacation.
10. I note that on 25 November 2020 I ordered the Applicant to pay Marist's and the Minister's costs of the mention held on 25 November 2020. That order stands.
11. Several other interlocutory applications require separate consideration in light of the parties' submissions and the conduct of the proceedings as follows: 1. Marist's costs of the notice of motion dated 31 May 2019 (order that costs in the cause made 6 June 2019) should be paid by the Applicant given that Marist has been successful in the proceedings. 2. Marist's costs in Black Hill No 1 concerning amendments to a notice to produce should be paid by the Applicant. Marist was successful in having important amendments made to the Applicant's notice to produce. 3. Pursuant to order 6 made on 30 August 2019 Marist's costs thrown away by amendments made to the Applicant's further amended summons should be paid by the Applicant. 4. In Black Hill No 2 the Applicant was ordered to provide security for the costs of Marist in the amount of $40,000. The Applicant should pay Marist's costs of the notice of motion dated 4 September 2019 given that it was successful in obtaining an order for security for costs. 5. Marist seeks its costs of its notice of motion dated 17 December 2019 challenging the competency of the proceedings. Marist was successful in obtaining findings that the proceedings were commenced incompetently by the Applicant, see Black Hill No 3. Remedial action by the Applicant's managing committee could overcome that shortcoming and that course was taken. The motion was ultimately withdrawn. Given the outcome overall each party should pay its own costs of that notice of motion. 6. In Black Hill No 4 the Applicant failed in its application to rely on a third further amended summons. Marist's costs of that notice of motion dated 7 December 2020 should be paid by the Applicant.

Costs of the costs application

1. Marist has been generally successful in seeking costs and should have its costs of this costs application paid by the Applicant.

Release of security of costs to Marist

1. An order will be made that the security for costs held by the Court be paid to Marist as its legal costs are likely to be greater than that sum.

Orders

1. The Court orders as follows: 1. The Applicant must pay the First Respondent's costs of the notice of motion dated 31 May 2019 as ordered 6 June 2019 as agreed or assessed. 2. The Applicant must pay the First Respondent's costs of Black Hill Residents Group Incorporated v Marist Youth Care Limited [2019] NSWLEC 112 (Black Hill No 1) as agreed or assessed. 3. The Applicant must pay pursuant to order 6 made on 30 August 2019 the First Respondent's costs thrown away by amendments made to the further amended summons filed 29 August 2019 as agreed or assessed. 4. The Applicant must pay the First Respondent's costs of Black Hill Residents Group Incorporated v Marist Youth Care Limited (No 2) [2019] NSWLEC 137 as agreed or assessed. 5. Each party to pay its own costs of Black Hill Residents Group Incorporated v Marist Youth Care Limited (t/as Marist180) [2020] NSWLEC 82 (Black Hill No 3). 6. The Applicant must pay the First Respondent's costs of Black Hill Residents Group Incorporated v Marist Youth Care Limited (t/as Marist180) (No 4) [2021] NSWLEC 11 as agreed or assessed. 7. The Applicant must pay the First Respondent's costs of Black Hill Residents Group Incorporated v Marist Youth Care Limited (t/as Marist 180) (No 5) [2021] NSWLEC 43 as agreed or assessed. 8. The Applicant must pay the First Respondent's costs of this costs application as agreed or assessed. 9. Pursuant to r 41.3 of the Uniform Civil Procedure Rules 2005 (NSW), the Registrar is to pay to the First Respondent's solicitors Colin Biggers & Paisley out of Court the sum of $40,000.00, being the funds paid into Court by the Applicant as security for the First Respondent's costs of the proceedings.

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