Black Hill Residents Group Incorporated v Marist Youth Care Limited

Civil Procedure Act 2005 (NSW)

1. Section 64 of the Civil Procedure Act 2005 (NSW) (CP Act) provides: Division 3 Other powers of court 64 Amendment of documents generally (1) At any stage of proceedings, the court may order - (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. ….
2. Amendments are enabled by s 64 of the CP Act, subject under subs (2) to s 58 which refers in turn to ss 56 and 57 in relation to identifying the dictates of justice.
3. The High Court considered the relevant principles to consider in relation to such applications in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (Aon). As identified by the Minister, in Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu [2015] FCA 1098 (Tamaya), Gleeson J usefully identified the following principles citing Aon inter alia: 126 The onus is on the party seeking leave to amend to persuade the Court that such leave should be given: Dye v Commonwealth Securities Ltd (No 2) [2010] FCAFC 118 at [17]. 127 The principles articulated by the High Court in Aon apply to matters in this Court: Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261 (Cement Australia) at [43]. Relevant matters the Court is to consider include: (1) The nature and importance of the amendment to the party applying for it: Aon at [102]; (2) The extent of the delay and the costs associated with the amendment: Aon at [102]; (3) The prejudice that might be assumed to follow from the amendment, and that which is shown: Aon at [5], [100] and [102]; (4) The explanation for any delay in applying for that leave: Aon at [108]; and (5) The parties' choices to date in the litigation and the consequences of those choices: Aon at [112] and Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75 (Luck) at [44]; (6) The detriment to other litigants in the Court: Aon at [93], [95] and [114] and Luck at [44]; and (7) Potential loss of public confidence in the legal system which can arise where a court is seen to accede to applications made without adequate explanation or justification: Aon at [5], [24] and [30]. 128 The weight to be given to the considerations identified in Aon, individually and in combination, and the outcome of the balancing process, may vary depending on the facts in the individual case: Cement Australia at [51]. Obligation to prosecute proceedings diligently 129 A party may have a right to institute proceedings, but it has a duty to prosecute them diligently: Hong v Liew [2014] FCA 40 at [17]. This obligation is heightened where litigation is commenced at the end of a limitation period: cf Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Hoskins & Sells [1999] 3 VR 863 (Bishopsgate) at [31] to [32] and [52] (Tadgell and Ormiston JJ; Brooking J agreeing). Sufficient opportunity to plead the case 130 Parties must have a sufficient opportunity to identify the issues they seek to agitate: Aon at [94], [98] and [112]. At [94] and [98], the plurality said, relevantly: …Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants. …what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. [Rule 21 of the Court Procedures Rules 2006 (ACT) (the equivalent to s 37M)'s] reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs. 131 In Wotton v State of Queensland [2015] FCA 910 (Wotton) at [56] and [57], Mortimer J said, relevantly: … the focus of the overarching purpose is on the just resolution of disputes. In complex, novel and seriously contested litigation … a "just" resolution invariably involves resolving tension between the competing interests of and prejudices to the parties, and tension with the interests of other litigants in the Court whose proceedings depend to a greater or lesser extent on the current proceeding being heard and determined so as to "make room" for other proceedings. The familiar passage in Aon … at [111]-[112] is an important aspect of resolving those tensions: An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend… A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.
4. Each case must of course be decided on its own facts.

Part 5 Environmental Planning and Assessment Act 1979 (NSW)

1. Section 5.1 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) provides: Subdivision 1 Preliminary 5.1 Definitions (1) In this Division - activity means - (a) the use of land, and (b) the subdivision of land, and (c) the erection of a building, and (d) the carrying out of a work, and (e) the demolition of a building or work, and (f) any other act, matter or thing referred to in section 3.14 that is prescribed by the regulations for the purposes of this definition, but does not include - (g) any act, matter or thing for which development consent under Part 4 is required or has been obtained, or (h) any act matter or thing that is prohibited under an environmental planning instrument, or (i) exempt development, or (j) development carried out in compliance with a development control order, or (k) any development of a class or description that is prescribed by the regulations for the purposes of this definition. approval includes - (a) a consent, licence or permission or any form of authorisation, and (b) a provision of financial accommodation by a determining authority to another person, not being a provision of such financial accommodation, or financial accommodation of such class or description, as may be prescribed for the purposes of this definition by a determining authority so prescribed. determining authority means a Minister or public authority and, in relation to any activity, means the Minister or public authority by or on whose behalf the activity is or is to be carried out or any Minister or public authority whose approval is required in order to enable the activity to be carried out. Subdivision 2 Duty of determining authorities to consider environmental impact of activities 5.5 Duty to consider environmental impact (1) For the purpose of attaining the objects of this Act relating to the protection and enhancement of the environment, a determining authority in its consideration of an activity shall, notwithstanding any other provisions of this Act or the provisions of any other Act or of any instrument made under this or any other Act, examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity.
2. The Applicant was legally represented from the commencement of proceedings until a notice of ceasing to act was filed on 25 November 2019 by Mr Long solicitor. On 13 December 2019 leave was granted to Mr Fairbairn to act as the Applicant's agent by the Court. Mr Dan filed a notice of appointment of solicitor on 3 November 2020 and Mr Fairburn no longer continued as agent.

Evidence

1. The Applicant read the affidavit of Mr Nicholas Dan solicitor dated 7 December 2020 in support of the notice of motion. Mr Dan deposed to receiving recent instructions from the Applicant. Mr Dan engaged Tim Hale SC on behalf of the Applicant. Mr Dan faced difficulty obtaining access to all the evidence in these proceedings due to the required confidentiality undertakings. As of 7 December 2020, Mr Dan did not have a full set of evidence. He expected to receive all evidentiary material within the next seven to 14 days. Mr Dan deposed that the issues raised in the Third Further Amended Summons are legal matters and no further evidence would be led by any party. Should leave be granted to file and serve the Third Further Amended Summons, this could be done promptly.
2. While not formally read at the hearing, Marist relied on the affidavit of Mr Peter Monaghan Chief Executive Officer of Marist dated 31 July 2019. Mr Monaghan deposed that on 21 December 2018, Marist purchased the subject property. On 5 February 2019, Mr Peter Prants, a representative of the Minister, confirmed by email that Marist is funded by Family and Community Services (FACS) to establish and provide Intensive Therapeutic Care (ITC) services in various locations in NSW, including Newcastle, and is acting on behalf of FACS to carry out ITC services at the subject property.
3. Marist read the affidavit of Mr Monaghan sworn 15 January 2021 (Ex PM-2 to the affidavit was marked Ex 1), referring to the Program Level Agreement (PLA) executed on 5 and 6 February 2019 by Marist and the Minister (FACS Agreement). Mr Monaghan also deposed that there was a PLA entered into on 28 June 2018 by the same parties (2018 PLA). Mr Monaghan deposed that in order to provide the care services required under the FACS Agreement and 2018 PLA, Marist purchased 5 additional properties, leased 16 additional properties, received 450 referrals from the Department of Communities and Justice and accommodated 162 young persons. Mr Monaghan estimated that Marist has provided ITC services for 90 young persons and employed 383 permanent staff.
4. Marist funded the acquisition of properties by committing approximately $10 million of its reserve. This was set out in Mr Monaghan's July 2019 affidavit. That expenditure was only partly funded through government arrangements. In order to facilitate that expenditure, Marist has operated deficit budgets in the 2018/19 and 2019/20 financial years. Around $57.85 million has already been expended or contractually committed for the operation of the ITC program. All capital funding for property acquisition has come from Marist funds. Mr Monaghan deposed that the total annual funding anticipated to be received by Marist under the PLA for the 2020/2021 financial year is $43 million.
5. While not formally read at the hearing, Marist also relied on the affidavit of Ms Katherine Pickerd solicitor dated 24 November 2020, identifying correspondence with the Applicant leading up to Mr Dan's appointment as legal representative. On 15 July 2020, Mr Fairbairn emailed the Court and advised that the Applicant was in negotiations with a barrister. On 29 July 2020, Mr Fairbairn sent an email to the Court that the Applicant was in discussions with Mr Dan (its current legal representative) and senior counsel in relation to its representation for the remainder of these proceedings. On 6 August 2020, Mr Fairbairn sent an email to the parties and confirmed a brief had been provided to a barrister on that day. On 6 August 2020, the Court made further orders to progress the matter. On 3 September 2020, the Court again made further orders to progress the matter. After multiple attempts of communication from Marist to Mr Fairbairn, on 3 November 2020, Mr Dan filed a notice of appointment of solicitor for the Applicant. Mr Fairbairn was removed as an authorised officer representing the Applicant in the proceedings.
6. Marist read the affidavit of Ms Pickerd dated 15 January 2021. Ms Pickerd adopted the contents of her first affidavit. Ms Pickerd's second affidavit updated the procedural history of these proceedings since 24 November 2020. On 7 December 2020, the Applicant filed the notice of motion that is the subject of this hearing. On 8 December 2020, Ms Pickerd was copied into an email from the Minister's legal representative to Mr Dan, opposing the Applicant's notice of motion. On 8 December 2020, Ms Pickerd also sent a letter to Mr Dan, outlining Marist's opposition to the notice of motion. On 16 December 2020, Ms Pickerd sent a letter to Mr Dan requesting that the Applicant offer a suitable security for costs arrangement and establish that the proceedings are being competently conducted. On 24 December 2020, Ms Pickerd sent a letter to Mr Dan requesting a response on security for costs and a notice to produce. Ms Pickerd deposed that she had not received a response from Mr Dan.
7. The Minister read the affidavit of Ms Sharon Gordon solicitor dated 5 January 2021. Ex SRG-1 to the affidavit was marked Ex 1A. On or about 22 May 2019, the Applicant commenced these proceedings by Summons. In that Summons, the Applicant claimed relief on grounds including that no determining authority had examined or taken into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of the activity for the purposes of s 5.5 of the EPA. On 6 June 2019, the Applicant was granted leave to rely on an Amended Summons. In the Amended Summons, the Applicant claimed relief on grounds including that in its consideration of operating the transitional group home at the subject property, the Minister had not examined and taken into account to the fullest extent possible all matters affecting or likely to affect the environment for the purposes of s 5.5 of the EPA Act.
8. Ms Gordon deposed that on 16 August 2019, the Minister provided the Applicant and Marist with a REF and confirmed that it had been "finalised and approved" by an officer of the Minister on that day. The subject property was approved for ongoing use subject to the conditions in the REF. On 19 August 2019, the hearing dates of 19-20 August 2019 were vacated. On 29 August 2019, the Applicant filed a Further Amended Summons which abandoned the "failure to carry out an assessment under Part 5 ground" referred to in the Amended Summons. On 17 December 2019, the Applicant filed a Second Further Amended Summons which did not include any ground to the effect described in the Amended Summons. On 22 December 2019, the Applicant agreed "not to impugn the validity of the REF dated 13 August 2019 (including the characterisation of the activity as assessed in the REF as a 'transitional group home') in any proceedings". It was confirmed that the Minister had given "no approval for any activity at the site beyond what is set out in the REF".
9. Ms Gordon deposed that based on her review of the FACS Agreement, that document is a "high level" agreement for the provision of various services, including but not limited to ITTC). The Minister has entered into PLAs in substantially equivalent terms with about four other service providers. To the extent that the proposed Third Amended Summons impugns the validity of the FACS Agreement, other service providers who have entered into agreements with the Minister on substantially equivalent terms may wish to be heard.
10. It was agreed that on 18 December 2018 the Executive Director of FACS, Ms Eleri Morgan-Thomas, approved a document titled "Briefing for Executive Director: for approval" confirming "support for the physical environment of the ITTC service property at [the subject property]". Based on that approval, on the same day, Jelly Magirazi, a representative of FACS, sent an email to Dennis Drazenovic of Marist, confirming that FACS supported in principle using the subject property as a site for ITTC services. This email is labelled Ex 2.
11. Annexure A of the Applicant's submissions contains a chronology of events leading to the execution of the FACS Agreement. The chronology refers to correspondence between Marist and various people between 20 June 2018 and 5 February 2019. Notably, the chronology references the above email from Jelly Magirazi of FACS (Ex 2).

2018 and 2019 Program Level Agreements

1. On 28 June 2018, Marist and the Minister entered into the 2018 PLA (Ex 1). Clause 7.6.3 of the 2018 PLA states: 7.6.3 Locations of ITTCs ITTCS must be located in the following locations to enable strong interface with relevant mainstream and specialist services who can support the therapeutic needs of Children and Young People: (a) Gosford (b) Lismore (c) Newcastle (d) Orange (e) Queanbeyan (f) Tamworth (g) Wollongong, and (h) two in Metropolitan Sydney. The location of the ITTC must be approved by FACS and cannot be relocated without the prior written approval of the FACS Representative.
2. Item 2.3f in the "Implementation Plan" at Sch 5 of the 2018 PLA confirms that no land was identified for the purpose of providing ITTC services in Newcastle at the time the 2018 PLA was entered into.
3. Special condition 3.4 of the "Additional Terms" in Sch 6 of the 2018 PLA states: The process by which the Preferred Respondent is to follow in securing fit for purpose properties and seeking approval from FACS is described in the communique "TTC Facilities Process" (June 2018). As part of this process, FACS is allowing the Respondent to bid the proposed cost of securing access to property, which may be a rental cost or internal rental charge. The parties will follow the process described below in coming to an agreement on the specific quantum of the payment once it has been bid by the Respondent. The Respondent is to ensure that the focus of their efforts in following the process described in the communique ("ITTC Facilities Process") is securing the most appropriate properties available which are most likely to deliver the best outcomes for Children and Yeung People in care. Once the relevant property has been approved by FACS in accordance with the process in the "ITTC Facilities Process" communique and the payment is agreed by the parties it will be defined as a Supplement Service Payment and be specified in Table 13 of Schedule 3 (Payment Provisions) for the relevant facility using the variation mechanism set out in section 9 of the Program Level Agreement.
4. The terms of the 2019 PLA (FACS Agreement) are effectively the same.

History of proceedings

1. The proceedings have a lengthy history. In Black Hill Residents Group Incorporated v Marist Youth Care Limited (No 2) [2019] NSWLEC 137 (Judgment No 2) at [11]-[16], Robson J summarised the procedural steps from the commencement of the proceedings on 22 May 2019 to 29 August 2019. Judgment No 2 dealt with a security for costs application by Marist which was ordered in the sum of $40,000. The proceedings were commenced on 22 May 2019, after Marist commenced to operate the ITTC service. Urgent interlocutory relief was sought. The matter was listed for a final hearing on 19 and 20 August 2019. Shortly before the hearing was to commence on 19 August 2019, on 13 August 2019 a "Review of Environmental Factors" (REF) was completed by Scott Barwick of SJB Planning (NSW) Pty Limited in relation to the development/activity on the land. 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 FACS considered the REF purported to comply with the obligations of consideration 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 19 August 2019 the hearing was vacated in light of the REF and decision of 16 August 2019. On 29 August 2019 the Applicant filed a "Further Amended Summons" deleting the Pt 5 claim.
2. Additional affidavit evidence identified the further history of the proceedings. The matter was set down for a second hearing on 17-18 December 2019. Leave was granted to the Applicant to file a "Second Further Amended Summons" in court on 17 December 2019. Marist filed a notice of motion in court on 17 December 2019 seeking an order that the proceedings be dismissed as incompetently commenced which was then heard on 18 December 2019. The Applicant was not legally represented at the December 2019 hearing. Additional submissions were made in February and March 2020. Black Hill Residents Group Incorporated v Marist Youth Care Limited (t/as Marist180) [2020] NSWLEC 82 (Judgment No 3) was delivered on 30 June 2020. Further orders were made for conduct of the matter. Hearing dates of 19-21 April 2021 have been allocated for a third hearing.

Applicant submissions

1. On 5 February 2019, Marist executed the FACS Agreement. On the following day, 6 February 2019, the FACS Agreement was executed by "an authorised representative for the Minister for Family and Community Services, for and on behalf of the State of New South Wales, acting through the Department of Family and Community Services". That is, the FACS Agreement is between the Minister and Marist. From 6 February 2019 the parties to the FACS Agreement were contractually bound by the agreement and were contractually bound to perform their obligations under it. The Applicant's proposed amendment is solely directed to the obligations of the contracting parties under that agreement.
2. The proposed amendment is based entirely on the existing evidence filed and served by the Respondents, particularly Marist. The steps in the argument are as follows: 1. pursuant to the FACS Agreement, Marist, as a service provider under the FACS Agreement was and is contractually bound to provide services to FACS on the land at the subject property. The services to be provided on the land by Marist clearly constitute an activity within the meaning of s 5.1(1)(a) of the EPA Act. It is a use of land. This does not appear to be in dispute. Much of the evidence of the Respondents is directed to the nature of the activities that are taking place on the land and will take place on the land. Adopting the language of the SEPP, the activity is the use of the land as a transitional group home or for ITTC services, which the SEPP describes as development; that is, development for the purposes of Pt 4 of the EPA Act; 2. the Respondents' case is that within the meaning of the SEPP, the development/ activity on the land is being carried out by or on behalf of a public authority (FACS) and as such development consent is not required under Pt 4 of the EPA Act; 3. since the activity on the land is said to be carried out by Marist on behalf of FACS, the approval of the Minister or FACS (as a public authority) is required in order to enable the activity to be carried out. As such, the Minister and/ or FACS is a determining authority within the meaning of s 5.1(1) of the EPA Act; 4. the approval, within the meaning of s 5.1(1) of the EPA Act, which is or was required in order to enable the activity to be carried out was the FACS Agreement executed by Marist on 5 February 2019 and on behalf of the Minister on 6 February 2019. It was this agreement which imposed the legal obligations on Marist. It governed and regulated the services that Marist was obligated to provide to FACS and the terms and conditions pursuant to which they were to be provided. The FACS Agreement was a consent, licence or permission or a form of authorisation under the definition of approval under s 5.1(1) of EPA Act, noting also that the definition is inclusive; 5. although the FACS Agreement did not expressly refer to the subject property, it specified that ITTC services must be provided in a location in Newcastle approved by FACS. The evidence filed and served by the Respondents clearly establishes that the only approved location for an ITTC service in Newcastle was at the subject property. It was the FACS Agreement which enabled the activity to be carried out on the land. To be more precise, it was the execution of the FACS Agreement on behalf of FACS on 6 February 2019 which enabled the activity to be carried out on the land; 6. since the Agreement was executed on behalf of the Minister, the determining authority for the approval to enable the activity to be carried out on the land was the Minister; 7. pursuant to s 5.5(1) of the EPA Act, the Minister's consideration of the activity and whether approval should be given to enable the activity to be carried out on the land (that is whether the Minister should execute the FACS Agreement and be bound by its terms and conditions) required the Minister to take into account, to the fullest extent possible, all matters affecting or likely to affect the environment by reason of that activity; 8. it is common ground that the Minister did not do this. In the letter from the Crown Solicitors Office dated 5 July 2019 on behalf of the Minister to the then solicitors for the Applicant, the Minister admitted: In its consideration of the activity of the Transitional Group Home, the second respondent has not examined and taken into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of the Transition Group Home.
3. In further amplification of (e) above, pursuant to the FACS Agreement, the service provider (Marist) was required to perform particular services, which included ITTC services. Of particular significance in the present proceedings is cl 7.6.3 of Sch 1 of the FACS Agreement.
4. That upon the execution of the FACS Agreement on 6 February 2019 Marist was contractually bound to provide ITTC services at the subject property is reinforced by the chronology of emails and correspondence together with affidavit evidence served by the Respondents in these proceedings. This establishes that: 1. the contractual negotiations leading to the execution of the FACS Agreement on 6 February 2019 began with the "Notification of Contract Execution" letter dated 20 June 2018; 2. this required Marist to have a site in the Newcastle Local Government Area. Marist proposed the subject property which FACS was to inspect; 3. on 18 December 2018 FACS advised Marist that it supported the site in principle as a proper site to provide ITTC services in Newcastle subject to appropriate modifications; 4. on 19 December 2018, Marist sought a letter of confirmation from FACS in relation to the subject property, so that it could send it to Newcastle City Council for the purposes of establishing the application of cl 43 of the SEPP. Marist received the letter of confirmation from FACS on 20 December 2018.; 5. on the next day, 21 December 2018, Marist purchased Greentree House, being the subject property for the purposes of providing ITTC services in the Newcastle area; 6. on 4 February 2019, Newcastle Council sent an email to Marist seeking confirmation that Marist was acting on behalf of FACS to carry out ITCC services at the subject property. On the next day, 5 February 2019, FACS sent an email to Marist confirming that this was the case in order that Marist might send it to the Council. Marist sent that email on to the Council that day; 7. on 5 February 2019, Marist signed the FACS Agreement. On the next day, 6 February 2019, FACS signed the agreement. Thereafter, Marist was contractually bound to provide the services, the subject of the FACS Agreement.
5. The affidavit evidence of Mr Monaghan read on behalf of Marist confirms these submissions.
6. That a PLA was entered into in 2018 according to Mr Monaghan's evidence does not undermine the Applicant's argument relying on the 2019 FACS Agreement.
7. The amendment has reasonable prospects of success and is necessary for determining the real questions raised by these proceedings, namely whether the activity on the subject land is being carried out in breach of the EPA Act.
8. The issue raised is of public significance as it is an important question of public law. The Applicant does not need to adduce additional evidence if leave is granted. The hearing will not be unduly extended, and it can be completed in the allocated three days. The interests of justice suggest that leave ought to be granted given that the Applicant represents next door property owners. That the first amended summons made a claim based on Pt 5 of the EPA Act which it subsequently abandoned is irrelevant. That a REF has been prepared in purported compliance with s 5.5(1) is irrelevant. The previous Pt 5 claim was not directed to the execution of the FACS Agreement on 6 February 2019, it being more general in its terms.
9. There has been no relevant delay by the Applicant in making this application. The Applicant is not responsible for any of the causes for delay in the proceedings. The Minister chose to have a REF prepared which affected the 19 August 2019 hearing. Marist filed the notice of motion challenging competency of the proceedings at the 17 December 2019 hearing at which the Applicant was not legally represented.
10. Contrary to Marist's submissions, these are civil enforcement proceedings. Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 59.10 has no relevance.

Marist's submissions

1. The proposed additional claims are hopeless, supported by no available cause of action and are of no utility.
2. There has been substantial delay in filing the notice of motion given the authorisation challenged was made two years ago. No adequate explanation for delay has been forthcoming and the amendment is well outside the time frame in UCPR r 59.10.
3. Given the course of the litigation to date and potential costs consequences, allowing the amendment would be contrary to the overriding purpose of the CP Act. The onus is on the party seeking leave to amend a pleading to persuade a court that it is appropriate to grant leave. Section 64 of the CP Act is subject to ss 56-59 of the CP Act which set out considerations relevant to the exercise of discretion, such as delay, given the overriding purpose of the just, quick and cheap disposal of proceedings.
4. In furtherance of those principles, UCPR 59.10(2) imposes a three month time limit on the commencement of proceedings in the Court in the nature of judicial review. That time limit is relevant to the proposed amendment, which for the first time would ask the Court to review the decision of the Minister made two years ago to enter the FACS Agreement - a valuable commercial services agreement delivering critical care to vulnerable children. Since that agreement was made (and the materially identical 2018 PLA which predated it) it has been relied upon by Marist to commit to turnover and capital expenditure measured in tens of millions of dollars, involving the purchase and leasing of land, commitment of resources and the employment of staff.
5. The Applicant seeks to declare that socially important FACS Agreement to be "null and void" because of an alleged failure to consider the environment in breach of s 5.5, such that Marist would be restrained from fulfilling its obligations under that FACS Agreement. The Applicant wants to argue that the commercial agreement is only "null and void" in relation to the use of one property (which the FACS Agreement does not in fact mention), but is vague about how the Court is to find that the FACS Agreement is ineffective in relation to one property without disturbing or undermining its effectiveness in relation to its other functions and how the terms of the FACS Agreement negotiated between the parties would then be adjusted.
6. The amendment proposes a claim which is "proceedings for or in the nature of judicial review in the Class 4 … jurisdiction of the Land and Environment Court" within the meaning of UCPR 59.10, where in substance "… the setting aside of a decision is … required". Considerations relevant to the application of UCPR r 59.10 are identified in subr (3) and expounded on in caselaw. Adequate explanation for the delay has not been provided by the Applicant, an important matter as identified in Hannaford v Commonwealth Bank of Australia [2014] NSWCA 297 at [21].

Prospects of success

1. The amendments have no reasonable prospects of success. The test is identified in General Steele Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125 (General Steele) at 129-130.
2. Firstly, the FACS Agreement does not approve the use of any particular property. It contains no provision which creates any right or obligation with respect to it. Terms include cl 7.6.3 in Sch 1 which expressly requires additional "approval" for any property or properties proposed to be used within the broad region in which ITTC services must be provided. Schedule 6 special condition 3.3 refers to the process to be followed in securing appropriate properties. The FACS Agreement operates at the program level.
3. Secondly, the relief sought has no utility given the approval granted on 16 August 2019 by the Executive Director of FACS.
4. Thirdly, the unchallenged approval of 16 August 2019 and adoption of the REF means that s 5.5(1) of the EPA Act has been complied with.

Case management considerations

1. An annotated chronology of relevant events which are not understood to be in issue accompanied these submissions (these are largely set out in the judgment). The summons as originally filed on 22 May 2019 sought the following order: A declaration that the Development has not been authorised to be carried out under Part 5 of the EPA Act.
2. The amended summons filed on 6 June 2019 claimed: Further or alternatively (to the extent, if at all, that the Newcastle Intensive Therapeutic Care Hub constitutes a "transitional group home" within the meaning of the LEP and the SEPP being carried out on behalf of the second respondent), a declaration that: (a) the second respondent has purported to authorise the Newcastle Intensive Therapeutic Care Hub to be carried out without complying with, and in breach of, s 5.5 of the EPA Act; and (b) the purported authorisation is null and void and of no effect.
3. After considering the detailed REF dated 16 August 2019 for the use of the subject premises as a group home, FACS determined to approve the ongoing use of the ITTC service at the subject premises. The REF states at [1.1] that it aims to: Satisfy the requirements of the relevant NSW environmental legislation, in particular the requirements of the Environmental Planning & Assessment Act 1979; and Identify, assess and mitigate environmental impacts
4. It states at [1.2] that: This REF covers the activities related to the use of the existing dwelling as a group home.
5. On 29 August 2019, after the originally listed hearing dates were vacated to allow the Applicant's counsel opportunity to consider that REF, the Applicant withdrew its claims in the summons alleging any breach of Pt 5 of the EPA Act by the filing of its Further Amended Summons.
6. By its solicitor's endorsement on 22 November 2019 of a letter from the Crown Solicitor's Office of that date, and in return for a payment of $25,000, the Applicant: … (agreed) not to impugn the validity of the Review of Environmental Factors dated 13 August 2019 (including the characterisation of the activity as assessed in the REF as a Transitional Group Home).
7. If the Executive Director's review of relevant environmental factors REF is assumed to be valid, then any claim under s.5.5 must fail. Presumably in acceptance of that inevitability, no allegation of any breach of Pt 5 was alleged in the Second Further Amended Summons filed on 17 December 2019 in Court. In the absence of any evidence on the subject, it can reasonably be assumed that deletion of the reference to s.5.5 was made with the benefit of the advice of senior counsel who had been advising the Applicant.
8. From that date, the Applicant's claim materially seeks a declaration that the Applicant is carrying out development comprising "use of the Land for the purposes of a transitional group home" without development consent in breach of Pt 4. Notably, that is the same use which was considered by the 13 August 2019 REF which the Applicant has agreed not to impugn.
9. The Applicant reported to the Court in July 2020 that it was in contact with its new legal team. No explanation has been offered as to why it took five months to apply for the amendment now being considered.
10. On 3 September 2020 the Court listed the proceedings for hearing on 20-23 April 2021 and made a direction that any motion seeking leave to further amend the summons be filed by 25 September 2020. No application was made within that time. There is no evidence which explains what events have caused the Applicant to make its amendment application now.
11. The application to review a commercial agreement entered into almost two years ago is well outside the three month period identified by UCPR 59.10 and the reasonable expectations of case management. The consequence is that Marist has long relied upon the validity of that agreement in relation to its commitment to deliver the vitally important service of caring for vulnerable young persons in Newcastle and across the State. As recorded in the affidavit of Mr Monaghan sworn 15 January 2021, decisions have been made under that agreement as to the associated employment of staff and commitment of resources to the Black Hill property and generally.
12. An order for costs will not cure any prejudice to Marist given that the limited security for costs order in the sum of $40,000 has long been exhausted.

Prospects of success

1. No location is referred to in either the 2018 PLA or 2019 FACS Agreement. Approval of an ITTC service location under a FACS agreement is not an approval under Pt 5.
2. Entering into the FACS Agreement was not an approval under s 5.5 of the EPA Act. Firstly, the agreement does not approve an "activity" or the "use of land". It does not apply to any particular parcel of land. It does not authorise any matter that would have an environmental impact and that would fall within the definition of "activity". Rather, the FACS Agreement makes general arrangements for different types of care and protection to be provided to children across NSW, provides for payment of the provision of services and leaves the selection of sites for the provision of the care subject to a later date and approval.
3. Secondly, properly characterised, the entry into the FACS Agreement is a preliminary step in the carrying out of an ITTC service under a PLA. The process for service providers such as Marist commencing such a use involves: 1. the entering into a PLA; 2. the approval of the subject site pursuant to cl 7.6.3(c) of the FACS Agreement; and 3. the assessment of the activity in accordance with Pt 5 as was carried out by the Minister in 2019.
4. Thirdly, the FACS Agreement: 1. is personal to Marist (see cl 11 relating to assignment requiring the prior written consent of the other party); and 2. does not run with, or apply to any particular parcel of land. It is contractual in nature. The mere entry into a contract which does not itself authorise physical activity on particular land cannot be characterised as any form of activity approval.
5. As a matter of law, the FACS Agreement could not be characterised as a planning approval.
6. There are a number of issues with the steps in the Applicant's argument referred to in [28] above: 1. [28(a)]: Marist was not contractually bound to provide services to FACS on the land at the subject property under the FACS Agreement. There is no such requirement in the agreement itself. Put simply, the subject property is not referred to in the agreement. 2. [28(b)]: The FACS Agreement existed at the time the Applicant originally pleaded that no Pt 5 assessment had been completed. The abandonment of the Pt 5 ground upon the Minister's preparation of the REF makes clear that the Applicant has not before considered that the FACS Agreement was a purported Pt 5 approval. 3. [28(c)]: The Applicant concedes that the FACS Agreement does not expressly refer to the subject property. Clearly, a mere agreement between a public authority and a person cannot constitute an approval pursuant to Pt 5 of the EPA Act if it does not relate to a specific parcel of land.
7. The proposed amendments do not have reasonable prospects of success.

Case management

1. There has been significant delay in bringing the proposed amendment, some 18 months after proceedings were commenced and after a third hearing date had been set. Prejudice to non-parties may arise. The affidavit of Ms Gordon deposes that there are four other service providers with whom the Minister has entered into an agreement on substantially equivalent terms. To the extent that the proposed amendment impugns the validity of the PLA (or the validity of subsequent decisions made with respect to the use of land), other service providers whose land is also not identified in their PLAs may wish to be heard in these proceedings.
2. These proceedings have had an extended procedural history and are set down for hearing for three days. If four other service providers wish to be heard, it will add substantially to the hearing time, creating a risk that the current hearing dates could not be maintained.
3. Further, considering that there are three parties to the proceedings and the Court has limited availability in 2021, the potential for the matter to be part heard should also be avoided. There may also be detriment to other litigants in the Court in the manner described in Aon at [93], [95] and [114], Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75 (Luck) at [44] and Tamaya at [127], if the hearing dates are vacated or if the matter is part heard.
4. No explanation for the delay is provided by the Applicant. The facts and circumstances giving rise to this ground were known when proceedings were commenced, a similar ground was identified and then abandoned in August 2019 with the then Minister paying some costs in relation to that ground. The Applicant was represented by competent counsel. A change in legal representation is insufficient to explain the delay given the procedural history of the case.
5. The parties' procedural choices to date had consequences. The amendments seek to re-agitate an issue over 18 months after proceedings were commenced. There is potential for loss of public confidence in the legal system which can arise where a court is seen to accede to applications made without adequate explanation or justification.
6. The Applicant has had more than sufficient opportunity to plead its case, a matter identified by the plurality in Aon. The notice of motion should be dismissed given these circumstances.

Consideration

1. The Court has power to allow the amendment sought under s 64(1) of the CP Act. Under subs (2) all necessary amendments are to be made for the purpose of determining the real questions raised or otherwise depending on the proceedings, inter alia, subject to s 58 concerning the dictates of justice. The issue arises of whether the Court should exercise its discretion to allow the amendments sought by the Applicant. The Applicant bears the onus of establishing that leave should be granted.

Prospects of success / utility

1. In relation to prospects of success, the accepted test articulated in General Steele at 129, 130 is: …The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance". … But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process."
2. I accept the submissions of Marist and the Minister for the reasons they give that the new ground has no reasonable prospects of success. Further it lacks utility. The FACS Agreements, whether 2018 or 2019 (the summons refers only to 2019), are commercial contracts intended to achieve the provision of programs for the specified services at broadly described geographic locations eg Newcastle. This is clear from cl 7.6.3, set out in [21] above. Special condition 3.4, set out in [23] above, specifies the separate process for approval of specific facilities. The entry into the FACS Agreement by the Minister is not an "approval" for the purposes of s 5.1(1) of the EPA Act as no "activity" at a particular location is approved. The Applicant relied on correspondence between representatives of FACS and Marist during 2018 and 2019 as itemised in [30] above to submit that this correspondence in combination with the FACS Agreement caused Marist to become bound to provide services at the subject property when it entered into the FACS Agreement. That is not borne out by the terms of the FACS Agreement.
3. Concerning utility, the terms of the original summons as these related to Pt 5 are identified in Marist's submissions in [47] and [48] above. The FACS delegate received a REF prepared in 2019 concerning the activity at the subject property and made a determination in relation to s 5.5(1) of the EPA Act. The content of the REF is not impugned in these proceedings.
4. The proposed amendment raises very similar issues in relation to Pt 5 which were dealt with in August 2019, the Applicant expressly deleting the s 5.5(1) aspect of its Pt 5 ground following the preparation of a REF and determination by the FACS delegate. The Applicant submitted that the earlier case was in general terms and this new amendment is specific, focussing on the 2019 FACS Agreement. Substantively there is no relevant legal difference in my view.
5. The relief sought in the summons is a declaration that the 2019 FACS Agreement was made in breach of s 5.1(1) [sic] (s 5.5(1)) of the EPA Act and a declaration that it is null and void insofar as it relates to the land. Consequential orders restraining the use of land by Marist are also sought. As the Respondents identified, the Applicant has not adequately articulated how a PLA which does not identify any location can be the subject of such a declaration. It is debateable whether the relief sought is able to be granted, a further basis for finding lack of utility in the amendments.
6. These findings essentially dispose of the motion.

Case management

1. In relation to case management, I agree with the Applicant's submissions whereby the allocation of a third hearing date in April 2021 is not due to the Applicant's actions in relation to the first and second hearing dates not proceeding. If the time since delivery of Judgment No 3 in June 2020 is considered, there has been delay in the Applicant progressing this notice of motion. Orders were made requiring any notice of motion of this nature to be filed by 25 September 2020. The notice of motion was filed on 7 December 2020.
2. I do not consider that the Applicant has demonstrated why the dictates of justice requiring the just, quick and cheap disposal of proceedings are served by the amendment, given the history of the matter. Most relevantly, the circumstances on which the amendment is based were known when the case was commenced when the Applicants had competent legal representation. That new senior counsel is now involved many months after proceedings were commenced does not provide sufficient explanation for why this amendment is sought now. As the Minister submitted, a response was made by the preparation of a REF in 2019 in light of the Applicant's case relying on Pt 5 as then drafted, a determination for the purposes of Pt 5 was made and that ground was subsequently removed by the Applicant. The Applicant has had an adequate opportunity to plead its case.
3. Other considerations such as the possible impact on third parties, as identified in Ms Gordon's affidavit are also important given the lengthy history, for various reasons, of the proceedings to date. Given the expenditure by Marist to date in program delivery identified in Mr Monaghan's evidence, it is important that all issues are heard and determined finally at the third hearing. The potential for involvement of third parties also suggests this amendment should not be allowed.
4. For completeness, the Applicant has commenced civil enforcement proceedings. I do not need to consider UCPR r 59.10, contrary to Marist's submissions that it is relevant.
5. Balancing the interests of justice, the Applicant's notice of motion dated 7 December 2020 should be dismissed.

Costs

1. Marist seeks an order that its costs be paid instanter, a variation of the usual costs order. The Applicant should have the opportunity to address this. A timetable for this will be discussed with the parties.

Orders

1. The Court orders: 1. The Applicant's notice of motion dated 7 December 2020 is dismissed. 2. Costs are reserved.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 February 2021