Hoxton Park Residents Action Group Inc v Liverpool City Council

Liverpool City Council - First Respondent Malek Fahd Islamic School - Second Respondent Australian Federation of Islamic Councils Inc - Third Respondent State of New South Wales - Fourth Respondent Commonwealth of Australia - Fifth Respondent Representation: Counsel:

Mr P E King/Ms L Evans - Applicants Submitting appearance - First Respondent Mr A P Cheshire - Second and Third Respondents Mr H El-Hage - Fourth Respondent Mr S Free - Fifth Respondent Solicitors:

Robert Balzola and Associates (Legal) - Applicants Marsdens Law Group - First Respondent Goldrick Farrell Mullans - Second and Third Respondents I V Knight, Crown Solicitor - Fourth Respondent Australian Government Solicitor - Fifth Respondent File Number(s): 2009/289796 Decision under appeal Jurisdiction: 9111 Citation: Hoxton Park Residents' Action Group Inc v Liverpool City Council [2010] NSWSC 1312 Date of Decision: 2010-11-12 00:00:00 Before: Rein J File Number(s): 2009/289796

HEADNOTE [This headnote is not to be read as part of the judgment] In April 2008 the Australian Federation of Islamic Councils Inc purchased a substantial portion of land zoned residential by the Liverpool City Council at Hoxton Park Road, Hoxton Park. The land was thereafter leased to the Malek Fahd Islamic School Ltd with the view to construct and operate a faith-based educational facility and place of worship, as part of a national network of that and similar projects. The Liverpool City Council consented to a development application to give effect to this project. The Hoxton Park Residents Action Group, an incorporated association, and an individual resident of the suburb of Hoxton Park, Ms Marella Harris, commenced the present proceedings in the Equity Division seeking to restrain the funding of development, alleging that the funding was obtained from the Commonwealth by way of grant made under the Schools Assistance Act 2008 (Cth) and to the extent that such a grant was permitted, that Act was alleged to be invalid as being in contravention of s 116 of the Constitution. The applicants further sought a declaration that the Liverpool City Council had no authority to approve the development application on the basis that local councils now have no lawful existence. Both the Hoxton Park Residents Action Group and Ms Harris also pleaded causes of action in general law for public nuisance and in negligence. These proceedings were commenced by way of summons but were pleaded by way of points of claim. Liverpool City Council, the State of New South Wales and the Commonwealth of Australia were respondents to the proceedings. On 12 November 2010, Rein J ordered that the proceedings be dismissed, pursuant to r 13.4(i)(b) of the Uniform Civil Procedure Rules 2005 (NSW), on the basis that no reasonable cause of action had been disclosed by the appellants. That being an interlocutory decision, challenge to the decision was brought by way of summons seeking leave to appeal, that application being heard concurrently with the appeal. The applicants submitted that the primary judge erred had erred on the following grounds: (i) in determining that challenges to the Constitutional validity of Commonwealth legislation providing for funding to the Australian Federation of Islamic Councils Inc and the Malek Fahd Islamic School Ltd could not succeed in the light of the existing authority; (ii) in rejecting the proposition that s 116 of the Constitution governed the legislative powers of the State; (iii) in holding that the State legislature had power to establish a new body politic as the consent authority in respect of the development application; and (iv) in dismissing the claim, brought by both Hoxton Park Resident Action Group and Ms Marella Harris, in nuisance and negligence in respect of the activities being undertaken on the land pursuant to the development consent. Leave to appeal was granted in respect of (i) and (iv) and refused in respect of (ii) and (iii). The Court (per Basten JA, Allsop P & Beazley JA agreeing) held allowing the appeal: In relation to (i)

1. Because the facts alleged in the pleadings differ from those underpinning existing authorities, there is a respectable argument that the essential propositions relied on by the applicants are not squarely decided by binding High Court authority: [14] and [15]. The proposition that the Commonwealth cannot legislate to permit the funding of a religious institution for religious purposes is a proper matter to be raised under s 116 of the Constitution:[17]- [20] and [33] - [36]. Kruger v The Commonwealth [1997] HCA 27; 190 CLR 1; Australian Communist Party v The Commonwealth [1951] HCA 5; 83 CLR 1; Roach v Electoral Commissioner [2007] HCA 43; 233 CLR 162; Attorney-General (Vic); Ex rel Black v The Commonwealth [1981] HCA 2; 146 CLR 559 considered. In relation to (ii)
2. A constraint on State legislative power must derive from a specific provision of the Constitution or from an implication, as to its operation, which necessarily impinges on state legislative power: [39] - [40]. State legislative power is not constrained by s 116; nor is State legislation which would, if enacted by the Commonwealth, contravene s 116, thereby "repugnant to" s 116 within s 5 of the Australia Act 1986 (Cth). Kable v Director of Pubic Prosecutions [1996] HCA 24; 189 CLR 51 referred to. In relation to (iii)
3. The defining characteristics of a body politic will vary according to the circumstances. There is no constitutional restraint on the creation of a collective group identified as a body politic, consistent with the plenary power of the State parliament: [49] - [57] Lipohar v The Queen [1999] HCA 65; 200 CLR 485; Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te [2002] HCA 48; 212 CLR 162; Bennett v The Commonwealth [2007] HCA 18; 231 CLR 91; Thomas v Mowbray [2007] HCA 33; 233 CLR 307 referred to. In relation to (iv)
4. Although the present pleading in tort is too imprecise to stand, the possibility of pleading a legitimate claim in nuisance cannot be dismissed; noxious activity on land will affect various neighbours in different ways and a claim is dependent on the evidence presented: [66] - [68]. Vincent v Peacock [1973] 1 NSWLR 466; Halfey v Esso Petroleum Co Ltd [1961] 1 WLR 683; Wheeler v JJ Saunders [1995] 2 All ER 697; Hunter v Canary Wharf Ltd [1997] AC 655 at 669 referred to.

Judgment 1ALLSOP P : I agree with Basten JA. 2BEAZLEY JA : I agree with Basten JA. 3BASTEN JA : The present proceedings were commenced in the Equity Division of this Court by an incorporated association, Hoxton Park Residents Action Group Inc, and an individual resident of the south western suburb of Hoxton Park, Ms Marella Harris. The apparent purpose of the proceedings is to prevent the construction and operation of a school and place of worship, on land owned by the Australian Federation of Islamic Councils Inc ("the Federation"), by Malek Fahd Islamic School Ltd ("the School"). 4The proceedings were commenced by summons but were pleaded by way of points of claim, which have been the subject of amendment. The other respondents to the proceedings were the Liverpool City Council (which was the consent authority in respect of the development), the State of New South Wales and the Commonwealth of Australia. With the exception of Liverpool City Council, each of the defendants in the Equity Division filed a notice of motion seeking to have the proceedings summarily dismissed. On 12 November 2010, Rein J ordered that the proceedings be dismissed pursuant to the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 13.4(1)(b). That provision was engaged, his Honour held, because "no reasonable cause of action is disclosed". That being an interlocutory decision for the purposes of s 101(2) of the Supreme Court Act 1970 (NSW), the present challenge is brought by way of summons seeking leave to appeal. 5The pleadings relied on in this Court were a further amended summons, dated 14 June 2010, and a document entitled "Amended Points of Claim" bearing a handwritten date of 13 July 2011. That date was well after the judgment in the Court below, but it was accepted by the parties as setting out (in underlined text) amendments which his Honour had accepted and (in italicised and underlined text) amendments which his Honour had rejected: Tcpt, CA, 13/07/11, pp 4-5. The facts, for present purposes, are taken to be those alleged in the applicants' pleadings: nothing has yet been proved (or rejected), nor is there any documentary record yet in evidence. 6The applicants alleged that funding for the development was obtained from the Commonwealth by way of a grant made under the Schools Assistance Act 2008 (Cth), to the State, for the purpose of providing funds to the School and the Federation. To the extent that such a grant was permitted by the Schools Assistance Act , that Act was alleged to be invalid as being in contravention of the Constitutional prohibition on Commonwealth legislation with respect to religion: Constitution, s 116. State legislation giving effect to the grant was also said to be invalid, because in contravention of s 116. 7The applicants sought a declaration that the Liverpool City Council had no authority to approve the development application for the project because the provision under which it is now constituted, being s 220 of the Local Government Act 1993 (NSW), was invalid. The Liverpool City Council was not represented on the appeal, having filed a submitting appearance. 8Finally, causes of action were also pleaded under the general law for public (and possibly private) nuisance and in negligence. These were poorly pleaded, but they were struck out as unavailable on legal grounds; no leave was given to replead. 9The Court was informed that there were separate proceedings challenging the validity of the development approval. The inter-relationship between that challenge and the present proceedings was not explored. Although there was no evidence that the consent to the development application was conditional upon funding being available to carry out the development, there may well have been conditions requiring substantial commencement within a certain period and possibly further work within a longer timeframe. It is also possible that the Commonwealth funding was made available through the State on condition that there was a valid development consent in place. None of these issues were addressed by any party before this Court. The Court was not informed as to whether there was any form of stay in place. 10Whilst acknowledging elements of uncertainty in the presentation of the applicants' claims, the primary judge identified the applicants' case as involving four broad elements, namely: (1) a Constitutional challenge to Commonwealth legislation providing for funding of the Federation and the School; (2) a challenge to the validity of the State legislation, pursuant to which Commonwealth funds were distributed to the Federation and the School; (3) a challenge to the validity of the State legislation establishing the local council, which was the consent authority in respect of the development application, and (4) claims in nuisance and negligence in respect of the activities being undertaken on the land pursuant to the development consent. 11The matter raised in (1) is of high public importance. For the reasons expressed below, leave should be granted and the appeal allowed on this ground. Leave should also be granted and the appeal allowed in respect of the matters identified in (4) 12In respect of matters (2) and (3), the arguments are untenable and the paragraphs of the pleadings which sought to raise those issues should properly have been struck out. Leave to appeal should be refused. 13It is convenient to deal with each of the matters raised in the order set out above, identifying the parts of the pleadings relevant to each issue.

Issue (1): Constitutional challenge - Commonwealth legislation

(a) Issues raised 14In relation to the argument invoking s 116 of the Constitution, the primary judge engaged in a careful analysis of existing case law to determine the principles, binding on this Court, which have been established by the High Court in respect of this provision. He held that the claim could not succeed in the light of existing authority. That analysis was not erroneous in its terms and may well lead to the conclusion that, at trial, and indeed in this Court, the applicants must fail. However, it does not follow that the applicants should not be allowed to run a case in which the facts alleged are different in important respects from those underpinning earlier authorities, in order to challenge, or seek a development of, established principles. On the other hand, it does not follow that the respondents should be required to undergo the expense of a trial and possible appeals where, on any reasonable view, the claim is and will remain untenable. The resolution of a strike out application, based on anticipated futility, requires the Court to balance regard for the development of the law against avoidance of any unnecessary burden of litigation. 15The question, not in terms identified by the primary judge, was whether the applicants could present a tenable argument for distinguishing current authorities on s 116, or suggesting that a supportable approach to Constitutional interpretation might achieve a different result in the present case. Thus, the applicants should not be precluded from pursuing their case if the trial court is satisfied, not necessarily that they have an arguable case by application of established principle, but that they have a respectable argument, the essential propositions of which are not squarely denied by binding High Court authority and which might warrant a grant of special leave. The primary judge did not approach the matter in that way and in this respect erred. It is therefore necessary for this Court to undertake that task. 16In order to assess whether the applicants have an arguable claim in respect of the constitutional challenge, it is necessary to identify the circumstances in which the claim arises. The relevant paragraphs of the points of claim are as follows: "6. On or about 2 April 2008 the Third Defendant [the Federation] purchased a substantial portion of land zoned residential by the First Defendant [Liverpool City Council] at Hoxton Park Road Hoxton Park for the sum of $4,970,000.00 and thereafter leased the land or part of the land to the Second Defendant [the School] with a view to the construction on the land of substantial infrastructure at a cost of not less than $22,250,000.00 and the conduct of an establishment as and for the purpose of a place of worship within the meaning of the standard provisions for Local Environmental Plans published by the Department of Planning of the Government of the State of New South Wales working draft dated September 2004, and as and for the purpose of a faith based educational facility ['the project'] as part of a national network of that and similar projects. ... 21. The project provides by its terms expressly or impliedly: a. For a place or building used in Australia for the purpose of religious worship whether or not it is also used for social events and instruction by a religious group; b. A non-government faith based educational facility in New South Wales referred to in Education Act 1990 [NSW]; c. For establishing any religion, in that the project establishes a religion namely the Islamic religion in Hoxton Park which did not hitherto exist and which had the effect or purpose of recognizing a particular religion as a national institution ; d. For imposing any religious observance, in that the establishment imposes directly or indirectly on any child or person attending [t]he facility of whatever background the regular religious observance of the said faith including the saying of prayers and the wearing of clothes of a particular kind associated with the religion; e. For prohibiting the free exercise of religion, in that the project when operating will prohibit the free exercise of other religions and faiths at the said institution or facility within Hoxton Park. ... 37. In the premises, the decisions of the First Defendant and/or of the Fourth Defendant [the State of New South Wales] and/or of the Fifth Defendant [the Commonwealth] with respect to the project in approving the DA and granting the land and/or the funding thereof are void in that each decision is for the purpose of or was or is made: a. for establishing any religion, in that the project establishes a religion and tends to establish same namely the Islamic religion in Hoxton Park which hitherto had not been established in the community at Hoxton Park and which had the effect or purpose of recognizing a particular religion as a national institution ; b. for imposing any religious observance, in that the faith based educational facility will impose on any child or person attending the facility of whatever background the religious observance of the said faith; c. for prohibiting the free exercise of religion, in that the project when operating will prohibit the free exercise of other religions and faiths at the said institutional facility. ... 39. Further or alternatively, the Commonwealth and the State of New South Wales have in the exercise of legislative and/or executive power funded the project , and have pursuant thereto made payments of public moneys to the Second and/or Third Defendants for the purpose of the project full particulars of which will be given after discovery. 39A Alternatively to paragraph 39, in order to circumvent the restriction on the Commonwealth's powers under Constitution section 116 the Commonwealth has entered into an informal agreement or arrangement full particulars of which will be provided after discovery and interrogatories herein with the State of New South Wales and/or with the Second and Third Defendants for the funding of the project through the said State and/or the said entities . " The identification of the parties in paragraph 6 have been added for clarity; other material contained in square brackets is so depicted in the original document. Paragraph 39A, italicised above, is italicised in the original and was an amendment rejected by the primary judge. 17The pleading contains other related allegations, including a number of paragraphs which appear to contend that s 116 of the Constitution, in combination with s 106, limits the legislative power of the State Parliament to "impair" the constitutional guarantee in s 116: points of claim, par 35. It is alleged that State laws providing for the approval of development applications and empowering local councils to undertake that function are also invalid, apparently because they do not expressly exclude conduct which would impair the constitutional guarantee: par 38. In addition, and perhaps consequentially, the decision of the Liverpool City Council to approve the development application was also said to impair the constitutional guarantee: par 40. 18The central provision of the Constitution relied upon is s 116 which reads: " 116 Commonwealth not to legislate in respect of religion The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Commonwealth ." 19Section 106 provides for the continued operation of the Constitution of each State, "subject to this Constitution". One contention raised by the pleadings is that the effect of s 106 is to impose the legislative restriction of s 116, expressed in relation to the Commonwealth, on the States. This construction is not reasonably arguable: if, at the date of the establishment of the Commonwealth, the Constitution of a State permitted laws which would infringe the constraints imposed on the Commonwealth by s 116, the latter section did not, in its terms, vary the State Constitutions in that respect. No assistance is to be derived from US caselaw to the extent that the First Amendment to the US Constitution, in terms directed only to Congress, has been held to apply to the States by reason of the due process clause in the Fourteenth Amendment: Cantwell v Connecticut 310 US 296 (1940); Everson v Board of Education 330 US 1 (1947). Leave to appeal should not be given on this ground. 20The pleading also failed to distinguish clearly between the exercise of legislative and executive power. For example, the assumption underlying paragraph 39 appears to be that either would contravene s 116. In terms, the first part of s 116 ("The Commonwealth shall not make any law ...") is a constraint on legislative power only. On the case as pleaded, the central complaint appears to be that the "project" was funded under the Schools Assistance Act . The constraint on legislative power in s 116 does not refer to a particular head of Commonwealth legislative power: indeed, as has been pointed out more than once, the Commonwealth has no express power to legislate with respect to religion. Accordingly, the argument sought to be raised must be that when the Commonwealth legislates to provide for funding a class of persons or purposes, there must be an implied limitation on the scope of the applicable legislative power, to ensure that it conforms to the constitutional limitations in s 116: cf Acts Interpretation Act 1901 (Cth), s 15A. That proposition is reasonably arguable. A consideration of such matters may have been influential in the formulation of the restriction on the purpose for which the funds might be used in the legislation the subject of challenge in Attorney-General (Vic); Ex rel Black v The Commonwealth [1981] HCA 2; 146 CLR 559 (see 636-643) (" Black") . 21Logically, the next step must be to identify the purposes and classes of recipients of any relevant payments under the Schools Assistance Act . To extract an allegation from the pleading is by no means easy. Indeed, and perhaps because of a series of amendments, the pleading now appears better designed to obscure rather than reveal the real issues sought to be raised. It is not until paragraph 37 that any allegation is made in relation to the Commonwealth. Indeed, there is no reference in the points of claim to the Schools Assistance Act . However, the summons contains the following claims for declarations: "5. Declaration that the law of the Commonwealth and any declaration by the Minister thereof conferring power to approve funding of the project by payment of funds to or for the Second and/or Third Defendant for their purposes pursuant to any agreement or otherwise is void and of no effect. 6. Declaration that the Commonwealth law insofar as it provides for grants to the State of New South Wales on condition that the money so granted is paid by the State to Third Defendant to finance the project, including the erection of buildings therefore [sic] whether or not pursuant to agreement or otherwise between the Fifth and Fourth Defendants and between the said Defendants or either of them and the Second and Third Defendants is void and of no effect. Particulars of statutes Schools Assistance Act 2008 , Schools Commission Act 1973 ; Schools Assistance (Learning Together -- Achievement Through Choice and Opportunity) Act 2004 as amended . " 22The primary judge dealt with the constitutional issues in carefully structured and argued reasons. Having summarised the arguments, he dealt with the three limbs of the relevant part of s 116 of the Constitution by reference to authority in the following sections of his judgment: (a) the establishment provision - [23]-[35]; (b) the free exercise provision - [36]-[44], and (c) the imposition provision - [45]-[49]. 23In rejecting a proposition that the case should be allowed to proceed through the usual interlocutory steps, to allow the applicants to obtain evidence of any informal arrangement between the Commonwealth and the State which might demonstrate an intention to avoid a restriction imposed by the Constitution, his Honour held that no such exercise was warranted in circumstances where the Commonwealth legislation "does not infringe s 116 of the Constitution directly or indirectly, expressly or impliedly": at [54]. He also rejected the proposition that the matter should be allowed to proceed because the law in respect of the operation of s 116 was "not settled": his Honour took the view that the law is settled in relation to the establishment provision and the free exercise provision and that there was no substance in the attempted reliance on the imposition provision: at [78]. He dismissed the proceedings as a whole on the basis that they were not tenable "since no reasonable cause of action is disclosed": at [98].

(b) Constitution, s 116 - power to legislate in respect of religion 24Three propositions may be stated as not presently in contest. First, s 116 imposes a constraint on legislative power ("shall not make any law"). Secondly, the constraint is addressed to the Commonwealth, and not to the State or any other body politic. Thirdly, (leaving aside the Territories power in s 122) there are no law-making powers conferred on the Commonwealth which are not subject to s 116: see generally, Black at 576-577 (Barwick CJ). 25There has, so far, been limited consideration in the present case of the source of the Commonwealth law said to contravene s 116. As explained by the primary judge, reliance was placed on particular sections of the Schools Assistance Act . Part 3 of the Act is entitled "Authorisation of Financial Assistance". It appears to have been assumed that the financial assistance made available through the State to the Federation and the School was provided under this Part. For present purposes it is sufficient to refer to the outline provided in s 11: " 11 Simplified outline (1) This section is a simplified outline of this Part. (2) Financial assistance to a State for a non-government school, or another non-government body, must not be paid unless there is an agreement between the Commonwealth and the relevant authority of the school or body. (3) The agreement must cover matters including the following: ... (b) grant acquittal and reporting requirements ...; (c) monitoring, evaluation and compliance requirements .... (4) The following additional conditions apply to the grant of financial assistance to a State for a non-government school or another non-government body ...: (a) in the case of financial assistance for a school - the school must be an approved school; (b) the school or body must be financially viable; (c) the State must pay amounts of assistance to the relevant authority of the school or body as soon as practicable (or within an extended period allowed by the Minister). (5) If a non-government school, or another non-government body, breaches a funding agreement, the Minister may (under the agreement) require the school or body to repay an amount to the Commonwealth. ... (6) If a State fails to pass on an amount of financial assistance to a non-government school, or another non-government body, for which financial assistance is granted under this Act, the Minister may require the State to repay an amount to the Commonwealth." 26It may be assumed for present purposes that the Schools Assistance Act was made pursuant to the power conferred by s 96 of the Constitution, providing that "the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit". 27The focus of the argument in this Court, and it appears in the Court below, was on the construction of s 116 of the Constitution. However, an antecedent question involves the proper construction of the Schools Assistance Act (and, to the extent it is relevant, any other Commonwealth legislation relied upon to support the grant to the Federation and the School). The importance of that consideration derives from the pleaded fact that funding was provided for "the project", which included "a place or building ... for the purpose of religious worship whether or not it is also used for social events and instruction by a religious group": points of claim, par 21(a). To similar effect, the grant is described as being provided "with a view to the construction on the land of substantial infrastructure ... and the conduct of an establishment as and for the purpose of a place of worship": cl 6. Accepting, as is necessary for present purposes, that those allegations are sound, there may be a real issue as to whether such funding would fall within the terms of the Schools Assistance Act , which is described in its preamble as "[a]n Act to grant financial assistance for non-government primary and secondary education ... and for related purposes". The Court would not ordinarily consider the constitutional validity of a legislative power to provide financial assistance if the financial assistance in question were shown to fall outside the power conferred by the Act. 28The whole argument has proceeded on the assumption that the factual matters pleaded can be accepted (of course only for the purposes of the strike out application) and that funding could validly be provided under the Schools Assistance Act . It is clear that the factual matters pleaded here fall outside those addressed in Black . While it may be accepted that the term "establishing" in s 116 was given a restrictive meaning, which would not cover the grant of financial aid directly to churches for religious purposes, unless the purpose was to set up the religion "as an institution of the Commonwealth" - Barwick CJ at 583 - other members of the Court expressed the concept differently, though to similar effect. However, as Gibbs J noted, there "may be a question of degree whether a law is one for establishing a religion": at 604. That is not to say that the applicants obtain any support from Black . It is rather to say that the direct funding of a religious institution for religious purposes was not an issue raised in Black. The pleading appears to raise factual questions, including as to the extent of such funding and its relationship to religious purposes. 29In other contexts, judicial statements appear to accord a broader meaning to the notion of establishment. Thus, in Wylde v Attorney-General (NSW); (at rel Ashelford) [1948] HCA 39; 78 CLR 224 at 262, Latham CJ stated: "The Church of England in England has remained as an established church, that is to say as a religious body teaching a religion which is supported and encouraged by the State ...." 30Dixon J in Wylde referred to the situation in New South Wales in the following terms at 285-6: "But although in the beginning and for a not inconsiderable period the position of the Church of England in New South Wales appears to have been that of the Church established by law, time changed its relation to the law. It is not easy to trace the steps by which the result was reached but eventually it came to be considered as a body like other Churches established upon a consensual basis. The Ecclesiastical Court was disused and forgotten, the Acts of Council referring to it ceased to be law as did other early legislation in which might be seen a recognition of the Church as an institution established by law." 31That history is articulated in some detail by Priestley JA in Scandrett v Dowling (1992) 27 NSWLR 483, particularly at 539 and 559 (Hope AJA agreeing); see also at 490-492 (Mahoney JA). 32There are other issues which may warrant permitting the applicants to proceed with their claim. For example, there are differences in approach in Black as to the legitimacy of reference to convention debates and United States cases dealing with the first amendment to the US Constitution. Barwick CJ took a restrictive approach, for example, permitting reference to the American text and its judicial interpretation only in the case of ambiguity: 577-579. The first limb of the First Amendment to the US Constitution provides: "Congress shall make no law respecting an establishment of religion ...." 33It is arguable that "respecting an establishment of" is wider than "for": Black at 598 (Gibbs J). Further, the second limb of s 116 not being found in the First Amendment to the US Constitution may suggest that the reference to "establishment" in the US Constitution was understood to have a wider operation: ibid. However, whether that would mean that the additional terminology in s 116 gives that section a lesser operation than the First Amendment in the United States, may be contestable: see Black at 622 (Murphy J). Further, it is arguable that the language is sufficiently similar to warrant the inference that it was derived from the US Constitution and that regard may properly be had to US cases, at least prior to 1901: Adelaide Company of Jehovah's Witnesses Inc v The Commonwealth [1943] HCA 12; 67 CLR 116 at 131 (Latham CJ). 34While, in respect of the establishment limb of s 116, the applicants must confront the approach adopted in Black , there are two factors (at least) which would permit a contrary approach to be presented. First, as pleaded, the applicants' case alleges direct funding of a religious institution for religious purposes, a matter which was not in issue in Black . Secondly, developments in constitutional law since Black was decided in 1981 may allow submissions to be made supporting a more flexible approach to the constraints on legislative power expressly identified in s 116. Thus, authority in relation to protection for freedom of political communication, an implied constraint on legislative power, demonstrates a willingness to derive greater assistance from the United States Supreme Court in respect of matters relevant to the structure and scope of government. 35None of this may ultimately avail the applicants, for one of several possible reasons, but the proposition (if made out in fact) that the Commonwealth can pass a valid law permitting the funding of a religious institution for religious (not educational) purposes, is a proper matter for challenge. It may ultimately require the High Court to determine if its existing jurisprudence adequately covers that matter. It is not a proposition squarely decided by binding High Court authority. 36This conclusion does not require reference to the second limb ("imposing any religious observance") or the third limb ("prohibiting the free exercise of any religion") as relied upon by the applicants. It is therefore not necessary to consider the extent to which the adoption by Gaudron J in Kruger v The Commonwealth [1997] HCA 27; 190 CLR 1 at 133 of an approach which takes account of necessary (as opposed to incidental) effects, as well as purposes, should be applied: see also at 86 (Toohey J) referring to Australian Communist Party v The Commonwealth [1951] HCA 5; 83 CLR 1 at 273 (Kitto J). Although Kruger was concerned with the third limb (free exercise), the principles referred to could affect the construction of the section as a whole. Giving the provision a broad reading (as accepted by Barwick CJ in Black at 577) and reading the section as a coherent prohibition, may result in an arguable case that the Commonwealth may not make a law providing direct funding to religious bodies. Finally, particular conduct, even legislative conduct, which may have seemed within the scope of a power in past times, may no longer be so treated: cf Roach v Electoral Commissioner [2007] HCA 43; 233 CLR 162 at [6]-[8] (Gleeson CJ). 37For these reasons the primary judge was in error in striking out the challenge to the Commonwealth law supporting the grant in question.

Issue (2): Challenge to State laws 38The primary judge rejected the proposition that s 116 governed the legislative powers of the State parliament: at [55]. That conclusion is undoubtedly correct. 39The second limb in the applicants' argument was that a law of a state which purported to establish a religion or interfered with a religion in a manner which would not be tolerated under s 116 was "repugnant to" the Constitution within the language of s 5 of the Australia Act 1986 (Cth). His Honour rejected that argument on two bases. First, if s 116 did not in terms limit the legislative power of a state, a state law which was not in conformity with its principles was not "repugnant to" s 116. He further held that if the Commonwealth legislation did not contravene s 116, neither did the State legislation, even if s 116 were held to govern State legislative power. 40His Honour's reasons were correct. State laws may be invalid to the extent of any inconsistency with a valid law of the Commonwealth (Constitution, s 109) but a constraint on state legislative power must otherwise derive either from a specific provision of the Constitution or from an implication as to its operation, which necessarily impinges on state legislative power. Such implications arise, for example, from the creation under Ch III of an integrated national judicial system, as articulated, for example, by McHugh J in Kable v Director of Public Prosecutions [1996] HCA 24; 189 CLR 51 at 114. No argument presented in the present attracts any such analysis. 41If the applicants are permitted to continue their challenge to the validity of the Commonwealth law, there may be an entitlement to maintain consequential relief which requires the continued involvement of the State. (There is a further basis for challenge to State legislation to be discussed below.) However, that would not justify maintaining paragraphs 32-36 and 38 and 40 of the points of claim. To the extent that paragraph 37 includes reference to decisions of the Commonwealth, it could be maintained as consequential relief in respect of the Commonwealth alone, although the challenge under the Constitution is not in respect of the exercise of statutory power (nor of executive power generally) but only in respect of legislative power. As paragraph 37 would therefore need to be repleaded, it is not maintainable in its present form. For avoidance of doubt, paragraphs 38(d), 39A and 40(e), so far as the last refers to particular (d) in paragraph 38, were correctly rejected. 42These matters are sufficiently clear to warrant refusal of leave on these grounds.

Issue (3): Challenge to status of local council 43A fresh ground in the amended notice of appeal asserted that the primary judge had erred in holding that the State legislature was "not precluded from creating a new body politic, and had done so effectively, and that in any event it did not affect the result": par 13A. This was a reference to the findings of the primary judge at [61]-[74], rejecting the proposition that local councils now have no lawful existence. It is not clear that his Honour separately held that a different conclusion would have been immaterial: rather, he referred to the "contention built upon that foundation, namely that the Council did not have power to consider and approve" the development application in respect of the school. Although he accepted that no relief had been sought against the Council, it is usual practice to join the council in a challenge to a development consent, even though it may properly play no part in the proceedings, in accordance with Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72. 44The argument underlying the applicants' claim relies upon the status of councils under the Local Government Act . Prior to the commencement of the Local Government Amendment (Legal Status) Act 2008 (NSW) on 20 November 2008, a council was said to be a body corporate. The amendments in 2008 introduced a new s 220 in the following terms: " 220 Legal status of a council (1) A council is a body politic of the State with perpetual succession and the legal capacity and powers of an individual, both in and outside the State. (2) A council is not a body corporate (including a corporation). (3) A council does not have the status, privileges and immunities of the Crown (including the State and the Government of the State). (4) A law of the State applies to and in respect of a council in the same way as it applies to and in respect of a body corporate (including a corporation)." 45The apparent purpose of the provision, as revealed in the Minister's second reading speech, was "to remove the possibility that a council might be characterised as a constitutional corporation and therefore an employer for the purposes of the Commonwealth's Workplace Relations Act. It will ensure that a council cannot be subject to ... Federal industrial relations legislation": Judgment at [72]. 46His Honour rejected the submission that the State legislature had no power to create "bodies politic" which were not in fact individuals or corporations. His Honour rejected that submission as being inconsistent with the plenary power of the State Parliament, subject to the Commonwealth Constitution. However, he also held that if the submission were correct, the result would not be the destruction of local councils, but the invalidity of s 220. There would remain a body capable of carrying out the statutory functions conferred on councils by, amongst other legislation, the Local Government Act and the Environmental Planning and Assessment Act 1979 (NSW). 47Support for the proposition that the legislature had power to enact the law in the form of s 220 was found in Part 8 of the Constitution Act 1902 (NSW) headed "Local Government" and containing the following provision: " 51 Local government (1) There shall continue to be a system of local government for the State under which duly elected or duly appointed local government bodies are constituted with responsibilities for acting for the better government of those parts of the State that are from time to time subject to that system of local government. (2) The manner in which local government bodies are constituted and the nature and extent of their powers, authorities, duties and functions shall be as determined by or in accordance with laws of the Legislature. (3) The reference in subsection (2) to laws of the Legislature shall be read as a reference to laws that have been enacted by the Legislature, whether before or after the commencement of this section, and that are for the time being in force." 48His Honour also referred to s 5 of the Constitution Act , conferring power on the legislature, subject to the provisions of the Commonwealth Constitution, to make laws "for the peace, welfare and good government of New South Wales in all cases whatsoever ...": see A Twomey, The Constitution of New South Wales (Federation Press, 2004) pp 168-173. Section 2(2) of the Australia Acts of 1986 is to similar effect. Professor Twomey describes the early history of local government in New South Wales at 32-33. It was, apparently, not until the enactment of the Local Government (Shires) Act 1905 (NSW), dividing the whole State (other than the City of Sydney and any other existing municipality) into shires that there was a universal system of local government: s 5(1). The shires were to be governed by a council, initially of five members appointed for the purpose of conducting elections: s 7. A council was not incorporated and the Act provided that any officer or servant of the council could be appointed to represent and act for the council in legal proceedings: s 54(2). At that stage, it is apparent that councils were not bodies corporate and, depending on the scope of the phrase, may well have been "bodies politic". (As Twomey explains, s 51 of the Constitution Act was introduced in 1986, after the failed referendum seeking to introduce a provision relating to local government into the Commonwealth Constitution in 1974.) 49It was not entirely clear whether the applicants' contention was that the State could not legislate to create a "body politic", or that it could not legislate to create a local council as a "body politic". It was also unclear why the descriptor "body politic" was seen to be significant. It is convenient to identify a relevant meaning for that phrase. 50The phrase is used generically to describe a social group, which may or may not have legal personality, but has constitutional significance, in the broadest sense of that term. The defining characteristics of the body will vary according to the circumstances. In Lipohar v The Queen [1999] HCA 65; 200 CLR 485, the High Court considered whether a conspiracy which involved elements in different parts of Australia, had a sufficient connection with South Australia to be capable of prosecution in that State. The State itself was identified as a body politic, on behalf of which a prosecution might be instituted, a court might adjudicate innocence or guilt and from which the power to enforce a court order derived: at, respectively, [107] and [48] (Gaudron, Gummow and Hayne JJ). 51The term was used extensively in Re Minister for Immigration and Multicultural Affairs; Ex parte Meng Kok Te [2002] HCA 48; 212 CLR 162. In resisting deportation, the applicant asserted that he was "a member of the community constituting the body politic of Australia": at [17]. As explained by Gleeson CJ, that concept was used as an antonym for "alien", for the purposes of s 51(xix) of the Constitution: at [38]-[39]. For that purpose, a person born in Australia to an Australian citizen is a member of the Australian body politic: at [54], [55], [58] and [59] (Gaudron J); see also at [86], [89] and [90] (McHugh J); [181] (Kirby J) and [223] (Callinan J). 52Bennett v The Commonwealth [2007] HCA 18; 231 CLR 91 concerned a challenge to the validity of a law requiring that a person must be an Australian citizen to vote in an election for the Legislative Assembly of Norfolk Island, being an Australian external territory. The following statement appears in the joint judgment of Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ at [36]: "The answer to the question whether an external territory is 'part of the Commonwealth' may depend upon the purpose for which the question is asked. There are different senses in which a place, or a community, or a body politic, may be said to be, or not to be, 'a part of' another place, or community, or body politic." 53The term "body politic" was used in two distinct senses in that case. Thus, one of the plaintiffs was the Administration of Norfolk Island, a body constituted by the Norfolk Island Act 1979 (Cth) as a body politic: at [57]. As Callinan J noted, the submissions of the plaintiffs asserted that the people of Norfolk Island "have never been part of 'the community constituting the Australian body politic'": at [177]. Consistently with this usage, both the Administration and the people of Norfolk Island could, in different senses, be described as bodies politic. 54The term "body politic" was used in discussing the validity of interim control orders for the prevention of terrorist acts: Thomas v Mowbray [2007] HCA 33; 233 CLR 307. Gummow and Crennan JJ noted that a "terrorist act" was defined to mean an act with certain motivations and "the intention to intimidate governments or the public (ie elements of the body politic) ...": at [45]. Their Honours further stated at [142]: "Next, the plaintiff points to the words 'the Commonwealth and the several States' as indicative of that which is being defended. This is said to be those 'collective' bodies politic rather than the citizens or inhabitants of the Commonwealth or the States and their property. That submission should not be accepted. The notion of a 'body politic' cannot sensibly be treated apart from those who are bound together by that body politic." 55In Thomas , the body politic was identified as those who owed allegiance to the sovereign or to a representative government and those to whom an obligation of protection was, in turn, owed: at [141] and [143]; see also [371] (Kirby J). 56In a related sense, the electorate was identified as a body politic in Roach v Electoral Commissioner . Referring to the system of representative government, Gummow, Kirby and Crennan JJ noted that "the existence and exercise of the franchise reflects notions of citizenship and membership of the Australian federal body politic": at [83]. Incarceration was treated as a form of physical removal from the body politic, whilst obligations continued to exist as between those incarcerated and the broader community: at [84]. 57It is clear from this (selective) survey of recent usage of the words "body politic" (which is not a modern term) that it may be used to describe, collectively, a group of persons whether small (being ministers of a government) or large (persons living in Australia). The concept may be defined by characteristics derived from a constitution, but that is not necessarily so. Nor is there any constitutional restraint on the creation by the legislature of a collective group identified as a "body politic". While there may remain real questions as to the legal status of a council for different purposes, it is not possible to contend that s 220 fails to establish a collective body capable of exercising statutory functions, and particularly the consideration of the development applications in respect of land within geographically defined boundaries. Nor is it open to contend that the phrase "body politic" has such an inexorable meaning that the State is altering the limits of itself contrary to s 123 of the Constitution. Accordingly, no error has been demonstrated on the part of the primary judge in so far as he struck out pleadings supportive of such a claim, being the claims for relief in paragraphs 2, 3 and 4 of the amended summons and, it would appear, paragraph 27 (and perhaps other paragraphs) of the points of claim. Leave to appeal on these grounds should be refused.

Issue (4): Other causes of action 58The remaining claims, which appear to be covered by grounds in the notice of appeal alleging error in dismissing each cause of action, without leave to amend (pars 13 and 14), were brought in nuisance and negligence. They are partly relied upon to support claims in the summons for injunctive relief and damages. These claims are ineptly pleaded in the points of claim. Paragraphs 13 and 14 deal with a claim that the Federation and the School have created a public nuisance by conduct involved in the construction of the development and, it would appear, conduct which will result from the use of the land once construction has ceased. There is no pleading of any breach of the conditions of the development approval. There is, however, a pleading that the Federation and the School have engaged in "a hazardous activity" on the land which has "the natural consequence" of causing loss and damage to residents in the neighbourhood. 59For the purposes of these causes of action, it was necessary to distinguish between the first plaintiff, the Hoxton Park Residents Action Group Inc and the second plaintiff, an individual resident in the neighbourhood, Ms Marella Harris. His Honour treated their claims separately. In relation to the incorporated association, he held that the body lacked standing to pursue claims in nuisance or negligence because it was not the owner or lessee of land in the area and can have suffered no injury or damage as a result of the activities of the Federation and the school: at [86]. In respect of Ms Harris, the primary judge held that she had no standing to bring a claim in public nuisance and had failed to allege "special damage" for the purposes of a claim in private nuisance. 60To the extent that there was a claim in negligence with respect to the carrying out of a "hazardous activity", his Honour appears to have dismissed the claim on the basis that there was no pleading of the scope and nature of the duty. On its own, this might have been reparable by the grant of a yet further opportunity to amend. However, his Honour appears to have concluded that such claims could not be maintained where the activity in question involved the carrying out of that which was approved under a development consent. In the alternative, his Honour appears to have held that such a claim could not be brought in the Supreme Court by virtue of the exclusive jurisdiction conferred on the Land and Environment Court by the Land and Environment Court Act 1979 (NSW), ss 20 and 71. 61It is convenient to deal with these arguments in the reverse order to that set out above. First, the exclusive jurisdiction of the Land and Environment Court is identified by reference to "proceedings of the kind referred to in s 20(1)(e) of the LEC Act": s 71(1). Section 20 of that Act identifies the "class 4" jurisdiction of the Court and provides, relevantly for present purposes: " 20 Class 4-environmental planning and protection and development contract civil enforcement (1) The Court has jurisdiction (referred to in this Act as 'Class 4' of its jurisdiction) to hear and dispose of the following: ... (e) proceedings referred to in subsection (2). (2) The Court has the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of the following proceedings: (a) to enforce any right, obligation or duty conferred or imposed by a planning or environmental law or a development contract, (b) to review, or command, the exercise of a function conferred or imposed by a planning or environmental law or a development contract, (c) to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function, (d) whether or not as provided by section 68 of the Supreme Court Act 1970 - to award damages for a breach of a development contract." 62The term "development contract" is defined in s 20(5): no submission was made that this aspect of jurisdiction was engaged in the present case. The phrase "planning or environmental law" is defined for the purposes of sub-s (2) in sub-s (3). The respondents did not identify any respect in which the applicants were said to have sought to enforce a provision of such a law. Accordingly, it could not be said that the Supreme Court had no jurisdiction to hear the claims in nuisance and negligence. 63The next point, which emerges less clearly from the reasons given below, is that compliance with a development approval may provide a defence against any claim in nuisance or negligence - such may perhaps be inferred from the statement that no breach of the development approval was pleaded. However, that proposition may be too broad. The fact that a body is carrying out a lawful activity does not of itself answer a claim in negligence, any more than a failure to carry out an activity lawfully (such as driving through a stop sign) necessarily results in liability for negligence. No doubt it is true that the incorporated association is most unlikely to have a claim for damages, but it is not beyond the bounds of possibility that Ms Harris may have one. As presently pleaded she does not, but the opportunity to replead should not have been dismissed without consideration. 64Whether any claim in "private nuisance" was pleaded at all may be doubted: in any event, no argument was put in this Court that the incorporated association would have suffered any relevant damage, which would support such a claim on its part. It is also doubtful that Ms Harris would seek to pursue a claim in private nuisance as opposed to negligence. In the absence of any clearly pleaded claim in private nuisance, that possibility should be put to one side. 65In respect of public nuisance, the difficulty remains for the incorporated association, that it neither suffers nor fears injury or interference with its rights and enjoyment of any land. No authority was relied upon to support its standing to bring a claim for public nuisance. 66At this stage of the proceedings, it seems inappropriate to consider whether or not Ms Harris would have standing to obtain a remedy by way of injunction for a public nuisance. Whether she has suffered "special damage" is not a matter which is easily resolved as a preliminary point on a strike-out application. One may assume that a noxious activity on land will affect various neighbours in different ways, but the fact that two or more may be subject to the same or similar loss or interference with their enjoyment of their respective properties, would not necessarily preclude each bringing an action in nuisance. 67The pleading in paragraphs 13 and 14 of the amended points of claim is too imprecise to be allowed to stand. It creates a broad impression that injunctive relief is sought to prevent all activities by way of construction work on the land owned by the Federation. The possibility of pleading a legitimate claim in nuisance cannot be discounted; injunctive relief has been granted in stranger circumstances: see Vincent v Peacock [1973] 1 NSWLR 466. It is also apparent that injunctive relief can be granted in respect of the use of heavy trucks on a public highway, causing a nuisance to neighbouring residents: see Halfey v Esso Petroleum Co Ltd [1961] 1 WLR 683. The present pleading is embarrassing and should not be allowed to stand. There should, however, have been leave granted to replead. It is not plain that no valid claim can be pleaded. 68So far as the operation of the development consent is concerned, that is a matter to be pleaded by way of defence. Whether or not the grant of a development approval will provide a defence to a claim in nuisance, and if so, in what circumstances, may well depend not merely on a pleading but on the evidence: see Wheeler v JJ Saunders [1995] 2 All ER 697; Hunter v Canary Wharf Ltd [1997] AC 655 at 669 (Pill LJ), 710 (Lord Hoffmann) and 712-22 (Lord Cooke of Thorndon); see generally Markesinis and Deakin's Tort Law (6 th ed), pp 543-544.

Conclusions 69A number of points may be made in summary form in respect of this exercise. First, the restrictive approach adopted in the early cases considering the prohibition on the free exercise of any religion, namely Krygger v Williams [1912] HCA 65; 15 CLR 366 and Adelaide Company of Jehovah's Witnesses Inc v The Commonwealth are unlikely to be central to the applicants' case. Further, there are passages in some judgments in Kruger v The Commonwealth which provide support for a less constrained approach to the construction of s 116. 70Although there may be reason to doubt that the issue as pleaded will succeed at trial, it was not on that basis that the respondents sought to strike out the proceedings. A critical factual issue is the scope and purpose of the grant of funding by the Commonwealth, through the State, for the purposes of the school. If it has such a clear religious purpose as the pleading suggests, it may fall outside the scope of the legislative scheme; if it falls within the scope of the legislative scheme such legislation is not squarely covered by Black ; if the grant of funding does not have such a scope, the case may fall squarely within Black and be dismissed on that basis. In any event, that part of the proceeding should not have been struck out when such questions remain unresolved. 71Further, despite the striking out of the claims in nuisance and negligence as pleaded, Ms Harris should have been allowed an opportunity for repleading. Careful attention to the elements of the respective causes of action, and of course the facts, may permit a tenable claim to be mounted. In other respects, the application for leave to appeal should be refused. 72In the result, the claim will not proceed in respect of the Liverpool City Council, which entered a submitting appearance, but is entitled to its costs, assessed on that basis. 73The Commonwealth and the State sought to maintain the strike out of the proceedings so far as the constitutional issue under s 116 was concerned. They should pay the applicant's costs in respect of that issue. The School and the Federation resisted the claims in tort. Whether or not those claims will proceed, and if so, on what basis is not possible to predict. The pleading was embarrassing and properly struck out, but the respondents have failed to demonstrate that there should not be an opportunity to replead. The applicants should have their costs in respects of that aspect of the matter in this Court. 74The applicants have been partly successful and partly unsuccessful. Because the pleading was and remains unsatisfactory, they should recover only part of their costs. The appropriate course is to allow them to recover 50% of their costs of the proceedings in this Court from the State and the Commonwealth and 20% from the Federation and the School. The costs in the trial Court should be determined by that Court in due course. 75I would propose the following orders: (1) To the extent necessary extend time to file the amended summons seeking leave to appeal up to and including 21 March 2011. (2) Grant leave to appeal from the orders made by the Court on 12 November 2010 (and the orders for costs in connection therewith) on grounds limited to the challenges to the Constitutional validity of the Commonwealth legislation providing for funding of the Australian Federation of Islamic Councils Inc and the Malek Fahd Islamic School Ltd and the claims in nuisance and negligence. (3) Otherwise refuse leave to appeal from the orders made by the Court on 12 November. (4) Allow the appeal. (5) Set aside the orders made by the Court on 12 November 2010 insofar as they dismissed claims alleging the Constitutional invalidity of the Commonwealth legislation providing for the funding of the Federation and the School and insofar as they dismissed claims in nuisance and negligence without liberty to replead such claims. (6) Set aside the costs order made in the Equity Division. (7) Remit the matter to the Equity Division for orders for the further conduct of the proceedings consistent with the reasons of this Court and with respect to the costs of the proceedings in that Court. (8) Order that the State and the Commonwealth pay 50 per cent of the costs of the applicants/appellants in this Court and the Federation and the School pay 20 per cent of the costs of the applicants/appellants in this Court.

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: 25 November 2011