Hoxton Park Residents Action Group Inc. v Liverpool City Council

Background 21The first Plaintiff (Hoxton Park Residents Action Group Inc.) is an incorporated association of which the second Plaintiff (Ms Marella Harris) is a member and the President. Ms Harris, with others, is a resident of Hoxton Park, a suburb in south western Sydney, who lives in close proximity to land, which was acquired by the third Defendant (the Australian Federation of Islamic Councils Inc.) and on which the second Defendant (Malek Fahd Islamic School Ltd) commenced, in March 2010, the development of what is referred to in the proceedings as a faith-based educational facility and place of worship. The fourth Defendant is the State of New South Wales and the fifth Defendant is the Commonwealth of Australia. It is asserted that the Plaintiffs are adversely affected by the development. The first Defendant, the Liverpool City Council, which was the consent authority in respect of the development, is no longer an active party in the proceedings. 22The first Plaintiff commenced the proceedings by Summons filed on 22 July 2009, at which time the only defendant was Liverpool City Council. Subsequently (in May 2010), Ms Harris was joined as the second Plaintiff. The second Defendant was joined as a defendant on 24 March 2010 and the third Defendant on 10 May 2010. The fourth and the fifth Defendant was each joined on 17 May 2010. 23The Summons was subsequently pleaded by way of points of claim, which was the subject of amendment, and, finally, by a Statement of Claim, filed 22 May 2013, which I understand now to be the pleading upon which the Plaintiffs will rely. 24In the Statement of Claim, the relief sought has been reduced to the following: "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 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 (Cth); Schools Assistance (Learning Together-Achievement Through Choice and Opportunity) Act 2004 as amended; Appropriation Act [2008] to date ... 7A. Declaration that Appendix F to the intergovernmental agreement on Federal Financial Relations and/or such informal agreement or arrangement between the Defendants and each of them with respect to the project is an unconstitutional agreement and is invalid and of no effect, or invalid and inoperative to the extent that it provides funds having the purpose or effect of a law prohibited in contravention of the Constitution section 116, and part thereof; ... 18. Further or other relief as to the Court seems fit." 25The Plaintiffs then, relevantly, asserted: "Public Law Claims 25. On or about 2 April 2008 the third defendant purchased a substantial portion of land zoned residential by the first defendant at 612 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 with a view to the construction on the land of substantial infrastructure at a cost of not less [than]... $24,750,000.00 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 for the purpose of a faith based educational facility ('the project') as part of a national network of that and similar projects. 26. On or about 16 September 2008 the second defendant lodged development application No 346/2009 (the DA) with the first defendant in respect of the land comprising the land purchased by the second defendant and land then partly owned by the first defendant and zoned for public purposes. 27. At the time of the lodgement of the DA the land purchased by the third defendant was zoned residential. Hoxton Park is a residential area in which live some 4090 adult residents. 28. 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. ... 34. The Commonwealth has in the exercise of legislative power and in contravention of an implied restriction on the scope of the applicable legislative power to ensure that it conforms to the constitutional limitations in Constitution section 116, funded, managed and directed the project, and has pursuant thereto made payments of public moneys to the second and/or third defendants and/or fourth defendant as the means of payment to the second and/or third defendants for the purpose of the project full particulars of which will be given after discovery. Particulars a. Schools Assistance Act 2008 (Cth) and following years b. Appropriation Act 2008 (Cth) and following years c. Education Act 1990 (NSW) d. Approvals under and pursuant to the said laws of funding and direction and/or management of the project by or for the said entities e. The provision of funding of the project f. The entry into informal arrangements for the purposes of the project with the second and third defendants as more particularly alleged below. 35. In the premises, the decisions of the fifth defendant since 2009 with respect to the project and the funding and management thereof insofar as same were made in aid of the provision of funding management and direction by the fifth defendant of and for the purposes of the project are void in that each decision, and any payment, agreement or arrangement pursuant thereto is for the purpose of or was or is made in the exercise of the executive power of the Commonwealth in contravention of the implied restriction on the scope of the applicable exercise of executive power to ensure that it conforms to the constitutional limitations in Constitution s 116, and without lawful authority: 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. ... 36. Further or alternatively, the said law or laws of the Commonwealth and in particular Schools Assistance Act 2008 (Cth) and the annual Appropriation Acts 2008 to 2012 to the extent they fund, and provide for the project and its management of any other involvement therein by the Commonwealth, and authorize same, are invalid as impairing the constitutional guarantee, directly or indirectly; Particulars a. The laws taken singly or together impair the constitutional guarantee in that the purpose or effect thereof in the circumstances of the case is for establishing any religion, or a branch thereof in that the laws conferred power to authorise the project in circumstances where the project formed part of a national institution funded by or through the defendants; b. The laws taken singly or together impair the constitutional guarantee in that a purpose or the effect thereof in the circumstances of the case is for imposing any religious observance, in that the faith-based educational facility by its constitution and/or practice, imposes on any child or person attending the facility the religious observance of the said faith or a branch thereof in that and its other campus, and other facilities affiliated or associated with through the third defendant; c. The laws taken singly or together impair the constitutional guarantee in that a purpose or the effect thereof in the circumstances of the case is 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. ... 38. In the premises the said laws of the Commonwealth and the said exercise of executive power by the Commonwealth in aid of the project is each void and of no effect. 39. Further or alternatively in the premises set forth in paragraphs 33 to 38 herein, the decisions of the fifth defendant between 1 July 2008 and to date its servants or agents during the same period made in aid of the fifth defendant to fund the project and for the purposes of the direction and management thereof of or by the Commonwealth in purported exercise of the executive power of the Commonwealth have established or funded or party funded the project in contravention of and/or thereby impairing of the said constitutional guarantee and are each void or of no effect. Particulars a. The decision or decisions that the project proposed by the second and /or third defendants provides for education according to a religious belief or faith ('the religion'); b. The decision or decisions that the project proposed by the second and/or third defendants is funded by the Commonwealth and the State Governments through grants to the fourth defendant or directly to the second and/or third defendants depending on the number of students at the institution, full particulars of which will be provided after discovery; c. The decision or decisions that the project proposed by the second and /or third defendants without the said grants the project could not proceed, and the said project could not operate or otherwise proceed on a day to day basis; ... e. The decision or decisions to enter into the intergovernmental agreement and the informal arrangement or agreement alleged in paragraph 37. f. The plaintiffs repeat the particulars in paragraph 36. 40. In the premises set forth in paragraphs 33 to 39 herein the funds paid by the Commonwealth directly or indirectly through the agency of the State or otherwise to the second and/or third defendants were wrongly and unlawfully paid or paid to and received by the second and/or third defendants." 26In broad terms, the Plaintiffs allege that the 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 second and/or third Defendant. It is also alleged that the decisions of the fifth Defendant "since 2009" with respect to the development and its funding and management are void, because any such decisions or payments, agreements or arrangements, are contrary to the limitation in s 116 of the Commonwealth Constitution. Relevantly, the constitutional limitation referred to, prohibits Commonwealth legislation with respect to religion. 27To the extent that the Schools Assistance Act permitted such a grant, that Act is alleged to be invalid as being in contravention of s 116 of the Constitution. State legislation giving effect to the grant was also said to be invalid, because it is in contravention of s 116. 28Each of the fourth and fifth Defendants has filed a Defence, on 17 May 2013 and 10 May 2013 respectively. The second and third Defendants are not required to file a defence because, following the amendments to the pleading by the Plaintiffs, the remaining issues appear to be public law constitutional issues between the Plaintiffs and the fourth and fifth Defendants. It is asserted that: "the second and third Defendants remain as defendants because these matters concern their funding and in order to ensure that they can fully protect their interests, but they are not fully active parties, in particular since no orders are sought as against them". 29In the Defence filed by the fourth Defendant, answers were provided to paragraphs 5, 6, 25 and 34 of the Statement of Claim, extracted above, as follows: "6. In answer to paragraph 5 of the Statement of Claim, the State: A. Admits that it may be sued in accordance with section 5 of the Crown Proceedings Act 1988 (NSW); B. Otherwise does not admit that paragraph. 7. In answer to paragraph 6 of the Statement of Claim, the State: A. Admits that the Commonwealth may be sued; B. Otherwise does not admit that paragraph. 8. In answer to paragraph 25 of the Statement of Claim, the State: A. Admits the Third Respondent purchased land at 612 Hoxton Park Road, Hoxton Park, New South Wales and leased the land, or part of the land, to the Second Defendant; B. Otherwise does not admit that paragraph. ... 15. In answer to paragraph 34 of the Statement of Claim, the State: A. Says that, in 2009-2013, the Fifth Defendant (the Commonwealth) provided funding to the State for 'recurrent expenditure', as defined in section 4 of the Schools Assistance Act 2008 (Cth), for payment by the State to the Second Defendant; B. Says that, in 2009-2013, the State made payments of such monies received from the Commonwealth to the second defendant: (i) In 2009 and 2010, none of those payments were referrable to the Second Defendant's campus on the land at 612 Hoxton Park Road, Hoxton Park, New South Wales; (ii) In 2011, 2012 and 2013, $1,184,858 of those payments (exclusive of GST) were referrable to the Second Defendant's campus on the land at 612 Hoxton Park Road, Hoxton Park, New South Wales; C. Otherwise does not admit that paragraph." 30In relation to paragraphs 26, 27, 28, 35, 36, 39 and 40 of the Statement of Claim, extracted above, the Defence simply stated that "[t]he State does not admit" those paragraphs. 31There was no response directly to paragraphs 7A and 18. 32In the Defence filed by the fifth Defendant, answers were provided to paragraphs 6, 25, 27, 28, 34 and 35 of the Statement of Claim, extracted above, as follows: "6. As to paragraph 6 of the SOC, the Commonwealth: 6.1. admits that the Commonwealth is able to be sued 6.2. otherwise does not admit that paragraph. 7. As to paragraph 25 of the SOC, the Commonwealth: 7.1. admits the third defendant purchased the land at 612 Hoxton Park Road, Hoxton Park (Hoxton Park land) and leased the land to the second defendant 7.2. otherwise does not admit that paragraph. ... 9. As to paragraph 27 of the SOC, the Commonwealth: 9.1. admits that at the time of lodgement of the development application the land purchased by the third defendant was zoned residential 9.2. otherwise does not admit that paragraph. 10. As to paragraph 28 of the SOC, the Commonwealth: 10.1. does not admit sub-paragraph 28(a) 10.2. does not admit sub-paragraph 28(b), and says further: 10.2.1. the Education Act 1990 (NSW) makes no reference to a 'non-government faith based educational facility' 10.3. denies sub-paragraph 28(c) 10.4. does not admit sub-paragraph 28(d) 10.5. denies sub-paragraph 28(e) ... 14. The Commonwealth denies paragraph 34 of the SOC, and says further: Recurrent Expenditure 14.1. The Commonwealth provides grants for recurrent expenditure to the fourth defendant, which pays the grants to the second defendant as the 'approved authority' for the campus of the second defendant located at the Hoxton Park land (Hoxton Park Campus). Particulars a. Schools Assistance Act 2008 (Cth) sections 4 'relevant authority', 13, 30, 149 and Part 4 b. Funding Agreement between the Commonwealth of Australia as represented by the Department of Education, Employment and Workplace Relations and Malek Fahd Islamic School Limited for the provision of funding under the Schools Assistance Act 2008 2009-2012 and Deed of Variation (Recurrent Funding Agreement) c. Determination 2011 - 277 - Section 112 under the Schools Assistance Act 2008: Changes to Approved School Determinations - Location Change Proposals - Providing Education at Another Location effective from 27 April 2011 and dated 6 July 2011. 14.1.1. Funding for recurrent expenditure: i. is funding for expenditure relating to the ongoing operating costs of schools Particulars a. Schools Assistance Act 2008 (Cth), section 4 'recurrent expenditure' b. Recurrent Funding Agreement, cl 4. ii. can be applied to teaching and ancillary staff salaries, professional development of teachers, curriculum development and maintenance and general operation provisions. Particulars a. Schools Assistance Act - Administrative Guidelines: Commonwealth Programs for Non-Government Schools 2009 to 2013/14, para 65 b. Recurrent Funding Agreement, cl 4. 14.1.2.The Commonwealth did not provide any grants to the fourth defendant to pay to the second defendant for the recurrent expenditure of the Hoxton Park Campus for the 2009 or 2010 program year. 14.1.3. For the 2011, 2012 and 2013 program years to date, the Commonwealth has provided a total sum of $1,184,858 to the fourth defendant to pay to the second defendant for recurrent expenditure relating to the Hoxton Park Campus in accordance with the Recurrent Funding Agreement Particulars a. For the 2011 program year - $315,807 was provided referable to the Hoxton Park Campus b. For the 2012 program year - $579,765.74 was provided referable to the Hoxton Park Campus c. For the 2013 program year - $289,285 was provided referable to the Hoxton Park Campus Capital Expenditure 14.2. In relation to funding for capital expenditure, being funding for expenditure as defined in s 83(1) of the Schools Assistance Act 2008 (Cth): 14.2.1. the Commonwealth provides grants to the fourth defendant, which pays the grants to the Association of Independent Schools of New South Wales Block Grant Authority (NSW BGA) as the 'relevant authority' for New South Wales Particulars a. Schools Assistance Act 2008 (Cth) ss 4 'relevant authority', 13, 30, 149 and Part 5 b. Funding Agreement between the Commonwealth of Australia as represented by the Department of Education, Employment and Workplace Relations and the Association of Independent Schools of New South Wales Block Grant Authority Ltd and subsequent Deeds of Variation (NSW BGA Funding Agreement). 14.2.2. to receive grants for capital expenditure, non-government schools must apply to the NSW BGA with a capital grant proposal, and if recommended, the proposal is forwarded to the Department of Education, Employment and Workplace Relations for approval Particulars a. NSW BGA Funding Agreement b. Schools Assistance Act - Administrative Guidelines: Commonwealth Programs for Non-Government Schools 2009 to 2013/14 14.2.3. the Department of Education, Employment and Workplace Relations has not approved any payment by the NSW BGA for capital expenditure that relates, or is referable, to the Hoxton Park Campus Commonwealth Funding 14.3. With respect to funding provided in accordance with the Schools Assistance Act 2008 (Cth), the Commonwealth has: 14.3.1. not provided any funding directly to the second defendant 14.3.2. not provided any funding directly to the third defendant 14.3.3. only provided funding to the fourth defendant to pay to the approved authority for the Hoxton Park Campus as set out in paragraph 14.1 of the Defence." 33The fifth Defendant admitted paragraphs 5 and 26 of the Statement of Claim. 34The fifth Defendant denied paragraphs 36 and 38 of the Statement of Claim. It also denied paragraphs 39 and 40 and, in respect thereof, repeated paragraph 14 of the Defence, outlined above. 35There was no response directly to paragraphs 7A and 18, however, in relation to the relief claimed, generally, the fifth Defendant contended: "In relation to the relief sought by the plaintiffs, the Commonwealth denies that the plaintiffs are entitled to any relief, and says further: 20.1. the plaintiffs do not have standing to challenge the Appropriations Acts particularised in paragraph 6 of the Relief Claimed and paragraph 34 of the Pleading and Particulars of the SOC 20.2. the declaration sought at paragraph 7A of the SOC under the heading 'Relief Claimed' is not available because the said Intergovernmental Agreement does not give rise to rights of a kind which could found the claim for relief 20.3. if, and to the extent that, the plaintiffs seek relief in respect of past funding by the Commonwealth that relates to the Hoxton Park Campus but which is not funding for the purpose of any current or future activities, the plaintiffs do not have standing to seek such relief."

The Court of Appeal Judgment 36As set out above, one of the occasions on which the matter has been before the Court, was in relation to an application by each of the present Defendants to have the proceedings, as originally framed, summarily dismissed. On 12 November 2010, Rein J had ordered that the proceedings be dismissed [2010] NSWSC 1312; (2010) 246 FLR 207. There was a partially successful appeal to the Court of Appeal: Hoxton Park Residents Action Group Inc v Liverpool City Council (No 2) [2011] NSWCA 363; (2011) 256 FLR 156. I say partially successful because leave was granted in respect of the following ground (that remains): (i) in determining that challenges to the Constitutional validity of Commonwealth legislation providing for funding to the second and third Defendants could not succeed in the light of the existing authority. 37At [20] of the Court of Appeal's reasons for judgment, Basten JA, with whom Allsop P (as his Honour then was) and Beazley JA (as the President then was) agreed, wrote: "[20] ... 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 15 A. ... [27] The 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, para 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. [28]... The pleading appears to raise factual questions, including as to the extent of such funding and its relationship to religious purposes. ... [70]... 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."

The Notice of Motion - 30 September 2013 38As stated above, the Plaintiffs' notice of motion seeks an order that the Defendants give discovery, by categories, and that the Plaintiffs have leave to administer interrogatories. 39The Plaintiffs' proposed categories of documents sought from the second and third Defendants comprise 13 in number, some with sub-paragraphs. The Plaintiffs added further categories to the discovery categories in an amended list of categories served on 18 December 2013. The categories of documents now sought comprise 22 in number, some with sub-paragraphs. 40The Plaintiffs' proposed categories of documents sought from the fourth Defendant comprise 12 in number. The Plaintiffs added further categories to the discovery categories in an amended list of categories served on 18 December 2013. The categories of documents now sought comprise 18 in number, some with sub-paragraphs. 41The Plaintiffs' proposed categories of documents sought from the fifth Defendant comprise 11 in number. The Plaintiffs added further categories to the discovery categories in an amended list of categories served on 18 December 2013. The categories of documents now sought comprise 18 in number, some with sub-paragraphs. 42The Plaintiffs' proposed interrogatories to the second and third Defendants comprise 11 in number, some with sub-paragraphs. An amended version comprises 33 in number, some with sub-paragraphs. 43The Plaintiffs' proposed interrogatories to the fourth Defendant comprise 7 in number, some with sub-paragraphs. 44The Plaintiffs' proposed interrogatories to the fifth Defendant comprise 5 in number, some with sub-paragraphs. 45In support of the notice of motion, the Plaintiffs relied upon an affidavit sworn on 30 September 2013 by a solicitor, Robert Balzola, who is also the president of the first Plaintiff, to which is annexed a copy of the categories first sought, as against each of the Defendants. Mr Balzola deposes that he has been "advised by Counsel and believe[s] that the categories of documents referred to are relevant and essential to the just determination of the issues raised by the matter". (Objection was taken to this sentence, but I admitted it, as a submission rather than as evidence of its truth.) 46The Plaintiffs also rely upon an affidavit of Ms Harris, the second Plaintiff, sworn 7 January 2014, at least part of which appears to be made up of contentions and opinions by her in support of the Plaintiffs' categories of discovery against the various Defendants. Once again, I admitted some of her evidence as submission rather than as evidence of its truth. 47In submissions in reply, dated 29 January 2014, the Plaintiffs submit: "Ultimately at issue at present are what moneys did the public entities provide to the 2nd and 3rd Defendants, when and for what purposes." 48The second and third Defendants rely upon the affidavit of Ms J C Lazzaro, a solicitor in the employ of the firm of solicitors acting for those Defendants. 49Ms Lazzaro states that she has reviewed the categories of discovery claimed against the second and third Defendants, which categories she describes as "very broad", extending "over a period of many years and indeed in some cases ... unrestricted in time". She also states that the second and third Defendants "are separate entities and each keep separate records". 50Ms Lazzaro then gives evidence of the work to be done by the solicitors for the second and third Defendants to assist in the discovery process. She states an estimate of the costs of the second and third Defendants to 8 November 2013 ($229,304 plus GST) as well as the time (8 to 10 weeks) and the costs ($40,000 to $50,000 in legal fees alone) involved in meeting the Plaintiff's request for discovery, even before considering the costs of each of the other Defendants. She asserts that the first Plaintiff has no assets and that Ms Harris has only limited assets, the value of which does not extend to anywhere near the costs incurred to date, or likely to be incurred, with the result that the further costs to be incurred are likely to be irrecoverable. 51In relation to the interrogatories, she states that, "[I]n essence, most of them seek information that could only be obtained from documentary records. As such, a similar exercise would be required with each of the second and third Defendants in order to answer the interrogatories as would be required to produce the Lists of Documents". 52Although I permitted some cross-examination of Ms Lazzaro by counsel for the Plaintiffs, he asked her no questions on any of the topics referred to above. 53In opposition to the Plaintiffs' evidence, the fourth Defendant relied upon an affidavit of Michael Waterhouse affirmed 8 November 2013. He is employed by the Department of Education and Communities as the Director, Legal Services. 54Mr Waterhouse deposed that the Department of Education and Communities is responsible for the allocation of State government funding to schools in New South Wales pursuant to the Education Act 1990 (NSW). 55This funding is unrelated to the funding provided by the Commonwealth to the second Defendant. 56The fourth Defendant also relied upon an affidavit of Mark Ronsisvalle, affirmed on 8 November 2013. Mr Ronsisvalle is the Deputy Secretary, NSW Treasury. His duties and responsibilities include overseeing the disbursement of funds to government agencies and other third parties. Mr Ronsisvalle confirms that in NSW: "'recurrent expenditure' funding approved under the SA Act (Schools Assistance Act 2008 (Cth)) is paid by the Commonwealth to the NSW Treasury normally 3 times per year, for the purpose of the State Treasury forwarding the money to the 'relevant authority'. On each occasion, the NSW Treasury receives a notification from the Commonwealth, together with a schedule setting out the exact amount which is to be forwarded to each relevant authority for non-Government schools. ... Following the on forwarding of the Commonwealth funds to the 'relevant authorities', the State has no further role in relation to those funds." 57I also permitted some short cross-examination of Mr Ronsisvale by counsel for the Plaintiffs. He was asked no questions about the contents of his affidavit to which I have referred. 58Finally, the fourth Defendant relies upon a letter, dated 6 December 2013, from the Crown Solicitor's Office to the Plaintiffs' solicitor, which includes the following: "As explained in the evidence served by the State, the State's role in relation to the provision of Commonwealth funding under the School's Assistance Act 2008 (Cth) is strictly limited to on forwarding funds received from the Commonwealth to the recipient bodies (such as Malek Fahd Islamic School). After receiving the plaintiffs' request for discovery, I contacted the Department of Education and Treasury (these Departments being the relevant ones) and requested that they search for documents which evidence or record the provision of funding by the Commonwealth to Malek Fahd Islamic School (and specifically, the Hoxton Park campus). As you would be aware from Ms Chin's affidavit, Hoxton Park has only received recurring funding from the Commonwealth, since 2011. I am instructed that the Department of Education does not have any documents which evidence or record the provision of funding by the Commonwealth to Malek Fahd Islamic School in the period 2011 to date. Treasury does have such documents, and has provided me with copies of the documents. I enclose copies of those documents. As you will note, the documents essentially comprise of: A. A table prepared by NSW Treasury recording the amount of Commonwealth funding to Malek Fahd Islamic School (ie with respect to all three campuses) since 2011; B. Correspondence from the Commonwealth to the State, each enclosing a schedule of federal funding to be on forwarded by the State to recipient bodies; C. The relevant schedules provided by the Commonwealth (please note that, for confidentiality and relevance reasons, I have redacted the entries in the schedules which relate to other recipient bodies). The State provides these documents by way of informal discovery and does so on the basis that the plaintiffs are bound by the implied undertaking as though they were produced in accordance with a court order. I am instructed that Treasury does not have any other documents which evidence or record the provision of funding by the Commonwealth to Malek Fahd Islamic School in the period 2011 to date." 59In opposition to the Plaintiffs' claims, the fifth Defendant relies upon the affidavit of Ms Oon Ying Chin, affirmed 13 September 2013. Ms Chin is employed with the Department of Education, Employment and Workplace Relations as the Strategic Policy Advisor, Schools Cluster. The Department develops and manages the policy in respect of, and administers, the Commonwealth Grants for Recurrent Expenditure Program and Grants for Capital Expenditure Program for non-government schools in accordance with the provisions of the Schools Assistance Act. 60Ms Chin describes, in some detail, the manner in which the Commonwealth provides funding under the Schools Assistance Act to non-government schools, namely by the making of payments to the Treasury Department of the relevant State or Territory for the Treasury to pass on to the "relevant authority". She gives evidence to the effect that no grants have been approved by the Commonwealth for capital expenditure in respect of the Hoxton Park Campus of the second Defendant. Her affidavit, with documents annexed, comprises 286 pages. (The Plaintiffs' counsel did not seek to cross-examine Ms Chin.) 61On 9 December 2013, orders were made by consent, directing the fifth Defendant to give discovery of three different identified categories of documents (identified in Ex. A 19). The fifth Defendant served a list of documents, in apparent compliance with these orders, filed 23 December 2013. I have considered the documents in the possession of the fifth Defendant, which, I gather, have been produced.

The Statutory Regime in relation to the Notice of Motion 62The Plaintiffs rely upon Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), rule 21.2 which relevantly provides that the court may order that a party give discovery to another party of documents within a class or classes specified in the order (using a convention whereby party B is ordered to give discovery to party A). An order for discovery may not be made in respect of a document unless the document is relevant to a fact in issue. A class of documents must not be specified in more general terms than the court considers to be justified in the circumstances. It is clear from this rule that that discovery is discretionary. 63UCPR rule 21.1(2) provides that a document or matter is to be taken to be "relevant to a fact in issue" if it could, or if it contains material that could, rationally affect the assessment of the probability of the existence of that fact (otherwise than by relating solely to the credibility of a witness), regardless of whether the document or matter would be admissible in evidence. 64It is also sufficient if the document would either (i) advance a party's case or damage his or her opponent's case, or (ii) lead to a train of inquiry that would either advance a party's case or damage his or her opponent's case: Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55, 63; Mulley v Manifold [1959] HCA 23; (1959) 103 CLR 341, 345. 65However, Allsop P (as his Honour then was) said in Palavi v Radio 2UE Sydney Pty Ltd [2011] NSWCA 264, at [101]: "Parties should understand that the restriction on discovery now contained in Pt 21 is the current framework for discovery. Discovery (and its uncontrolled use) always contains (and contain) the risk of abuse and oppression. Discovery can be a highly expensive exercise. Courts in defamation, as in all other matters, including commercial matters, should be astute to ensure that it is not used as a weapon of oppression by wealthy litigants to oppress less well-funded parties. Even when all parties are well resourced, over-enthusiastic and unnecessary use of discovery impedes the due administration of justice and undermines confidence in the court system's ability to resolve disputes justly, quickly and cheaply. Parties should understand that there is no entitlement to 'chain of inquiry' discovery. If discovery is being used abusively, the courts can and should control it." 66The same principle, in my view, would apply in circumstances where impecunious litigants seek to use discovery where costs will not be able to be recovered from them if they are unsuccessful. 67Practice Note SC Eq 11 Disclosure, came into force in the Equity Division on 26 March 2012. It applies to all new and existing proceedings in the Division, with the exception of proceedings in the Commercial Arbitration List (paragraph 2). Paragraph 3 confirms that the Practice Note is intended to assist in achieving compliance with the overriding purpose set out in s 56 of the Civil Procedure Act 2005 (NSW). Relevantly, paragraphs 4, 5 and 6 set out a general regime for what is now called "disclosure of documents": "4. The Court will not make an order for disclosure of documents (disclosure) until the parties to the proceedings have served their evidence, unless there are exceptional circumstances necessitating disclosure. 5. There will be no order for disclosure in any proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings. 6. Any application for an order for disclosure, consensual or otherwise, must be supported by an affidavit setting out; the reason why disclosure is necessary for the resolution of the real issues in dispute in the proceedings; the classes of documents in respect of which disclosure is sought; and the likely cost of such disclosure." 68Paragraph 7 enables the court, in an appropriate case, to limit recoverable costs incurred in respect of disclosure. 69There was no dispute that these proceedings are "existing proceedings". Hence, the Practice Note applies. There was also no dispute that the parties had now served the evidence upon which it is intended to rely. The 70Bergin CJ in Eq, in Armstrong Strategic Management v Expense Reduction [2012] NSWSC 393, identified the policy underlying the Practice Note being to require a far more disciplined analysis of the need for disclosure by reference to the real issues in the proceedings, so as to avoid the need for review of large volumes of documents in the absence of knowledge of the proposed evidence. 71Subsequently, in Leighton International v Hodges; Thiess v Reinforced Earth [2012] NSWSC 458, McDougall J, at [13], suggested: "... that the Practice Note wished to make it very clear that, whatever may have been the traditional approach to production of documents in litigation, as between parties, there is a totally new regime in place. True it is that the Practice Note cannot override (in this case) r 21.2. But, as I have said, r 21.2 is discretionary in any event. The Practice Note is intended to set out the general approach that the court will take to the exercise of its discretion under the rule. Of course, it cannot be suggested that the Practice Note sets out in any exhaustive or definitive way the discretionary considerations that may be appropriate in a particular case." 72In SkyMesh Pty Ltd v Ipstar Australia Pty Ltd [2012] NSWSC 696, Sackar J added, at [7] - [9]: "The purpose and object of the Practice Note is an attempt to streamline the disclosure process and in changing the previous practice it is a recognition albeit, long overdue that a great deal of material was often discovered by parties prior to them filing their evidence which did not directly and in many cases even indirectly have any relevance to the ultimate issues before the court. The scope and extent of discovery especially when it occurs before evidence has often had the tendency to delay the parties and the court from clearly and hence effectively confronting the real issues for trial, and thereby in turn delay the cost effective case management of proceedings. Delay translates ultimately into cost with the filtering of often large volumes of materials much of which will never play a part in the ultimate forensic confrontation. On many occasions curiosity has been the culprit in perpetuating unnecessary and wasteful interlocutory confrontation over at best what are often tangential materials. If a party is forced promptly to apply its mind not only what its real case is but how to prove it, this should have the benefit of not only exposing the strengths of the case but also its weaknesses. The unreliable or uncertain witness is earlier exposed as are documents which help or hinder the case on either side. This ought to cause practitioners to purposefully and immediately deal with core issues where if needs be case management can be more constructive. Hopefully this will also cause a timely appraisal of such critical notions as onus with a realistic assessment of prospects." 73This passage, it seems to me, is applicable in relation to the Plaintiffs' notice of motion. 74It has been pointed out that the Practice Note, in its terms, strictly does not apply to a notice to produce. However, in Owners Strata Plan SP 69567 v Baseline Constructions Pty Ltd [2012] NSWSC 502, at [23] - [24], Stevenson J observed that: "It would subvert the intended operation of the Practice Note if parties could avoid its operation by adopting the expedient of serving a notice to produce, rather than seeking an order for disclosure. Indeed, if a notice to produce was served with the object of avoiding the operation of the Practice Note, such service might well constitute an abuse of the Court's process." 75In In the Matter of Mempoll Pty Ltd, Anakin Pty Ltd and Gold Kings (Australia) Pty Ltd [2012] NSWSC 1057, Black J, at [12], agreed with the views expressed by Stevenson J, and noted that: "... the court will be ready to set aside a notice to produce in an appropriate case if it appears to involve the subversion of the operation of the Practice Note. Equally, an application may be made for leave to issue a notice to produce nunc pro tunc, having regard to any evidence which is led to support the need for disclosure." 76Black J also dealt with the cases that had considered the Practice Note. I shall not repeat what he stated therein about "exceptional circumstances" which need to be established for an order in circumstances where the parties have not served all of their evidence. 77However, also see Black J's decision in In the Matter of North Coast Transit Pty Ltd [2013] NSWSC 1912, at [55]. 78The Plaintiffs relied, at least in relation to its claim against the fifth Defendant, upon what McDougall J had written in Leighton International v Hodges; Thiess v Reinforced Earth, at [11], namely that: "...nothing in the Practice Note, or for that matter in the rules, prevents parties to proceedings from agreeing and implementing, by consent and without any order of the court, a regime for or equivalent to disclosure. The Practice Note only applies where an order of the court is sought; but, where an order is sought, the Practice Note applies whether the order is sought by consent or not. That, to my mind, emphasises the role of the court in satisfying itself, at the appropriate stage, that disclosure is necessary." 79Thus, the Practice Note does not preclude the parties from implementing private agreements for the disclosure of documents. Indeed, parties' obligations under s 56(3) and (3A) of the Civil Procedure Act, point to the desirability of a measure of co-operation between the parties. 80As stated above, the Practice Note provides that there is to be no order for disclosure in proceedings in the Equity Division "unless it necessary for the resolution of the real issues in dispute in the proceedings". Thus, it is what are the real issues in dispute between the parties that determines what will be the subject of an order for disclosure. In the ordinary way, it should be possible to demonstrate, from the pleadings and from the evidence, the precise issues in respect of which disclosure is required. 81The concept of necessity was discussed by Stevenson J in James v Royal Bank of Scotland Group Plc; Mckeith v Royal Bank of Scotland Group Plc [2013] NSWSC 402, at [16]: "The concept of 'necessity' in the Practice Note has been interpreted to mean 'reasonably necessary' for disposing of the matter fairly or in the interests of a fair trial: Leighton International v Hodges; Thiess v Reinforced Earth [2012] NSWSC 458; at [22] per McDougall J." 82Ward J (as her Honour then was) in In the Matter of Gerard Cassegrain & Co Pty Ltd - Cassegrain v Gerard Cassegrain & Co Pty Ltd [2011] NSWSC 241, at [22] - [23], described the concept of necessity (in relation to orders for interrogatories) as "those which are 'reasonably required or legally ancillary' to the achievement of a fair trial (they need not be 'essential' but are to be 'subjected to the touchstone of reasonableness' (Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435 per Gaudron, Gummow and Callinan JJ, referring first to Attorney-General v Walker (1849) 3 Ex 242 and then State Drug Crime Commission of NSW v Chapman (1987) 12 NSWLR 447)". Her Honour also held that necessary "does not mean something that cannot be done without or dispensed with". 83A further question in this notice of motion is whether the court's discretion should be exercised to refuse to make the orders sought. The various Defendants rely upon such discretionary factors of policy, fairness and oppression. They also rely upon the estimate of costs that has been provided, which they say will not be able to be recovered if the Plaintiffs are unsuccessful. 84So far as interrogatories are concerned, UCPR rule 22.1(1) authorises the Court "at any stage of the proceedings" to order any party to answer specified interrogatories. The limitation prescribed by rule 22.1(4) is that such an order is not to be made unless the Court is satisfied that it is necessary at the time it is made. 85Thus similar principles apply. However, in determining "necessity", it is important to note that answers that are sought will be material in the sense that they may enable the Plaintiffs either to maintain their own case or to destroy the case put against them: Strata Plan 39743 v Linknarf Management Services; Alan J Crowley v Linknarf Managements Services [2010] NSWSC 225, per Harrison AsJ, at [21], referring to Griebart v Morris [1920] 1 KB 659 and Schutt v Queenan [2000] NSWCA 341; In the Matter of Gerard Cassegrain & Co Pty Ltd - Cassegrain v Gerard Cassegrain & Co Pty Ltd. 86In In the Matter of Olsen Infrastructure Pty Ltd [2012] NSWSC 1202, Brereton J, after referring to the relevant rules, wrote, at [2]: "The concept of necessity has been considered in many cases, and variously characterised as necessary in the interests of a fair trial, or for disposing fairly of the case [Boyle v Downs [1979] 1 NSWLR 192, 204-5 (Cross J); Yamazaki v Mustaca [1999] NSWSC 1083, [4] (Sully J)]. Thus the test is not one of absolute necessity, but of reasonable necessity in the interests of a fair trial." 87His Honour added, at [3]: "Although Practice Note SC Eq 11 - Disclosure in the Equity Division - does not apply in terms to interrogatories, nonetheless the Court would not countenance a party using the process of interrogatories to circumvent the requirements of SC Eq 11."

Issues in the Litigation 88I have set out the relevant paragraphs of the current pleading upon which the Plaintiffs intend to rely and each of the Defendants' answer to it. 89It seems to me, therefore, that the real issues in dispute between the parties will relevantly include whether: (a) the Commonwealth has funded, managed, and directed, the project which includes funding of a religious institution for religious, as opposed to educational, purposes; (b) the Commonwealth has made payments of public moneys to the second, third, and/or fourth Defendants as the means of payment to the second and/or third Defendants for the purposes of the project; (c) The fifth Defendant has made decisions with respect to the project and the funding (or partial funding) and management thereof; (d) Any such decision, and any payment made to the second and/or third Defendant, as a result of the decision, was void under s 116 of the Constitution; (e) Funding was provided for the purpose of the faith-based educational facility as part of the national network. (In relation to this issue, Young AJ stated "what must be demonstrated is that not only is there one institution which has a religious flavour which has been funded by Government, but that is part of a series or network." 90Thus, I should consider the disclosure sought, and the interrogatories to be administered, in the context of the scope and purpose of the grant of funding by the Commonwealth, through the State, to the second and/or third Defendants for the purposes of a faith-based educational facility and/or whether the second and third Defendants conducted a series or network of such educational facilities. 91Young AJ described this issue in the following terms: "Clause 25 pleads that funding was provided for the purpose of the faith based educational facility as part of the national network, that and similar projects. The aim of the allegation is to see if the case can be brought in what the plurality said or at least hinted in the Attorney General (Vic) Ex Rel Black v Commonwealth [1981] HCA 2; 146 CLR 559 that it may be that a religion is established by providing funds for a series or network of religious institutions which are funded by the Government. Accordingly, what must be demonstrated is that not only is there one institution which has a religious flavour which has been funded by Government, but that is part of a series or network." 92With respect, I am not sure that this description accurately summarises Paragraph 25 as presently drafted, which, it seems to me, deals with the third Defendant's purchase of the land at Hoxton Park and the purposes of the second and/or the third Defendant. That Paragraph does not refer to the scope, effect or purpose of Commonwealth funding. 93However, it appears to me that the Paragraph I have quoted from the reasons of Young AJ is really what the Plaintiffs are attempting to establish in order to deal with what I (and others) perceive to be an issue in dispute between the parties. 94Although the submissions made by the Plaintiffs are voluminous (3 different outlines in total exceeding 90 pages), what I have set out above is confirmed in Paragraph 68 of the Submissions dated 10 February 2014, which summarises the "discovery obligations" sought from each Defendant. The obligations "extend to the network of campuses of AFIC/MF (there are, it appears 3 in NSW) and to a time sufficiently proximate to permit the pattern and purpose of the funding to emerge, i.e. prior to the pleaded dated [sic] of April 2008 but beginning in the financial year 2005". 95I have also considered the discretionary factors such as the proximity of the hearing date, the fact that the proceedings were commenced in July 2009, the significant time and cost to one or more of the Defendants, the fact that the hearing date in May 2014 may be lost, the unlikelihood of not recovering costs of the process of disclosure and interrogatories in the event that the Plaintiffs are unsuccessful, that no relief is sought against the second and third Defendants.

The Schedule of Documents 96I do not propose to set out the categories of documents verbatim. I shall simply refer to the Schedule of Plaintiffs' Categories of Documents in relation to the second and third Defendants and then to the fourth and the fifth Defendants and to the categories of documents that I consider should be produced. I shall do the same with the interrogatories. Where the category is too wide, I shall state the limitation. Otherwise, I consider that the disclosure need not be given. (I have used the documents referred to in Ex. A tendered during the course of the hearing of the notice of motion.)

Schedule of Plaintiffs' Categories as against the second and third Defendants (a) Category 1, 14, and 15 - limited to applications actually submitted for federal funding, and applications relating to the project referred to. They do not include applications made to the fourth Defendant under the Education Act. The period covered should be limited to the period after 1 July 2008. (b) Category 2, 3, 5 and 6 - limited to the second and third Defendants and institutions conducted by either or both. The period covered should be limited to the period after 1 July 2008. (c) Category 9 - limited to letters of instruction, or other written instructions, relating to the funding by the fifth Defendant, sent to the second and third Defendants directly, or to either through the fourth Defendant. The period covered should be limited to the period after 1 July 2008. To the extent that there are no documents, that may be stated and verified.

Schedule of Plaintiffs' Categories as against the fourth Defendant (a) Category 1. (b) Category 2, 3, 4, and 5 - limited to Federal funding to the second and third Defendants and institutions conducted by either or both. The period should be limited to after 1 July 2008. (c) The fourth Defendant agreed to a revised category of documents in respect of Category 7, 8, and 10 set out in submissions dated 6 December 2013, which categories of documents, in the terms agreed to, should be provided. To the extent that there are no documents, that may be stated and verified.

Schedule of Plaintiffs' Categories as against the fifth Defendant (a) Category 1, 2, 3, 4, 5 and 16 - limited to the second and third Defendants and institutions conducted by either or both. In relation to applications, they are limited to applications received by the fifth Defendant. (b) Category 8 - limited to letters of instruction, or other written instructions, relating to the funding by the fifth Defendant, sent to the second and/or third Defendants directly, or through the fourth Defendant. To the extent that any of these categories of documents has already been disclosed, it is unnecessary to disclose them again.

Interrogatories as against the second and third Defendants (a) Interrogatory 6, 7 and 8 - limited to the second and third Defendants and institutions conducted by either or both.

Interrogatories as against the fourth Defendant (a) Interrogatory 5(a), (b), and (c), 7 and 8. (b) Interrogatory 5(d) - limited to institutions conducted by the second and/or third Defendants.

Interrogatories as against the fifth Defendant (a) Interrogatory 1 and 3(a), (b) and (c). (b) Interrogatory 3(d), 4(d) and 5(d) - limited to institutions associated with the second and/or third Defendants.

Costs 97It can be seen that the Plaintiffs have had limited success in respect of what was claimed. In my view, the Defendants should bear 30 percent of the costs, calculated on the ordinary basis, of the Plaintiffs' notice of motion. I otherwise dismiss the Plaintiffs' notice of motion filed 30 September 2013.

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: 02 April 2014