Black Hill Residents Group Incorporated v Marist Youth Care Limited (No 2)

[2019] NSWLEC 137

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Black Hill Residents Group Incorporated v Marist Youth Care Limited (No 2) [2019] NSWLEC 137
Hearing dates:	24 September 2019
Date of orders:	27 September 2019
Decision date:	27 September 2019
Jurisdiction:	Class 4
Before:	Robson J
Decision:	See orders at [64]
Catchwords:	COSTS – motion filed by first respondent seeking security for costs under r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW) – applicable legal principles – security for costs ordered
Legislation Cited:	Children and Young Persons (Care and Protection) Act 1998 (NSW) s 164 Civil Procedure Act 2005 (NSW) s 98 Environmental Planning and Assessment Act 1979 (NSW) Pts 4, 5 Land and Environment Court Rules 2007 (NSW) cl 4.2 Newcastle Local Environmental Plan 2012 State Environmental Planning Policy (Affordable Rental Housing) 2009 cll 42, 43 State Environmental Planning Policy (Educational Establishments and Child Care Facilities) 2017 State Environmental Planning Policy (Infrastructure) 2007 Uniform Civil Procedure Rules 2005 (NSW) rr 42.1, 42.21
Cases Cited:	Buckley v Bennell Design & Construction Pty Ltd (1974) 1 ACLR 301 Burrell Place Community Action Group Incorporated v Griffith City Council [2009] NSWLEC 120 Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280 Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176 Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564 Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA 157 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 ILC Group v Sydney Water Corporation [2014] NSWSC 1407 KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82; [2002] NSWCA 32 Roy Kennedy v Director-General of the Department of Environment and Conservation and Another [No. 2] [2007] NSWLEC 271 Sales-Cini v Wyong City Council [2009] NSWLEC 201 Sharples v Minister for Local Government [2008] NSWLEC 67; (2008) 159 LGERA 391
Texts Cited:	G E Dal Pont Law of Costs (4th ed, 2018, LexisNexis Butterworths)
Category:	Procedural and other rulings
Parties:	Black Hill Residents Group Incorporated - INC1900196 (Applicant) Marist Youth Care Limited (Trading as MARIST180) (First Respondent) Minister for Families, Communities and Disability Services (Second Respondent)
Representation:	Counsel: J K Mee (Applicant) P Tomasetti SC with J Doyle (First Respondent) J Farrell (Second Respondent)   Solicitors: Nexus Law Group (Applicant) Colin Biggers & Paisley (First Respondent) Crown Solicitor's Office (NSW) (Second Respondent)
File Number(s):	2019/00159914
Publication restriction:	Nil

Judgment

1. By notice of motion filed 4 September 2019 (‘Motion’), the first respondent in these Class 4 proceedings, Marist Youth Care Limited (‘Marist Youth’) seeks orders pursuant to r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’) that the applicant, Black Hill Residents Group Incorporated (‘Black Hill’) give security for Marist Youth’s costs of the proceedings by paying an amount in such a manner as the Court thinks fit and in the absence of such security being provided by a certain date, that the proceedings be dismissed.

2. For the reasons that follow, I determine that security for costs is to be provided by Black Hill in the sum of $40,000 to be paid by two instalments of $20,000 each on or before 31 October 2019 and 29 November 2019 respectively.

Background

3. The substantive proceedings brought by Black Hill against Marist Youth and the second respondent, the Minister for Families, Communities and Disability Services (‘Minister’) were commenced on 22 May 2019. By way of further amended summons filed 29 August 2019, Black Hill seeks declaratory and consequential injunctive relief in relation to the use and/or proposed use of land at xx xx Road, Black Hill (‘premises’) by Marist Youth for the Newcastle Intensive Therapeutic Care Hub, being a facility for “Intensive Therapeutic Transitional Care”. Black Hill alleges that such development is prohibited or requires development consent.

4. Marist Youth maintains that the premises are being used as a “transitional group home” within the meaning of cl 43 of the State Environmental Planning Policy (Affordable Rental Housing) 2009 (‘SEPP’) and that the premises are operated on behalf of the Minister. As such, Marist Youth contends that the development is permissible without the need to obtain development consent and it denies using the premises for any of the purposes as suggested by Black Hill.

5. Black Hill alleges that the Newcastle Intensive Therapeutic Care Hub does not constitute a “transitional group home” for the purposes of the Newcastle Local Environmental Plan 2012 and the SEPP given that it includes health service facilities, office premises and/or other uses.

6. The proceedings are set down for hearing for three days from 18 to 20 December 2019. The hearing of the Motion proceeded on 24 September 2019 with P Tomasetti of senior counsel appearing with J Doyle of counsel for Marist Youth and J K Mee of counsel appearing for Black Hill. Although Mr Farrell of counsel appeared for the Minister, he did not actively participate at the hearing of the Motion.

Issues in the proceedings

7. As agreed between the parties on 16 August 2019, the essential issues in the proceedings are:

1. What is the proper characterisation of the development?

2. Whether upon such characterisation, the use of the land for that purpose is prohibited or requires consent under Pt 4 of the Environmental Planning and Assessment Act 1979 (NSW) (‘EPA Act’).

3. If the development is properly characterised as a “transitional group home”, whether it has been, is being, and/or is proposed to be carried out on behalf of a public authority (the Minister).

4. If a breach of the EPA Act is found, whether:

1. relief should be granted; and/or

2. the grant of injunctive relief should be postponed or postponed on terms.

8. The issue of whether or not the development is properly characterised as a “transitional group home” arises under the SEPP. That term is defined in cl 42 therein as follows:

transitional group homemeans a dwelling:

(a)   that is occupied by persons as single household with or without paid supervision or care and whether or not those persons are related or payment for board and lodging is required, and

(b)   that is used to provide temporary accommodation for the relief or rehabilitation of people with a disability or for drug or alcohol rehabilitation purposes, or that is used to provide half-way accommodation for persons formerly living in institutions or temporary accommodation comprising refuges for men, women or young people,

…

9. The issue of whether or not the development is carried out by Marist Youth “on behalf of a public authority” (being the Minister) arises under cl 43(1) of the SEPP, which reads as follows (emphasis added):

(1)   Development for the purpose of a permanent group home or a transitional group home on land in a prescribed zone may be carried out:

(a)   without consent if the development does not result in more than 10 bedrooms being within one or more group homes on a site and the development is carried out by or on behalf of a public authority, or

(b)   with consent in any other case.

Circumstances in which proceedings commenced

10. At the time of commencement of the proceedings, Black Hill contended that it was apparent that there had been no development approval or any environmental assessment under Pt 5 of the EPA Act. While non-compliance with Pt 5 of the EPA Act is no longer part of Black Hill’s case as a Review of Environmental Factors (‘REF’) was finalised and approved (‘New Part 5 Approval’) by the Minister on 16 August 2019, two issues of significance remain, being:

1. Whether the actual use of the premises is properly characterised as “transitional group home”; and

2. Whether or not it is carried out “on behalf of a public authority”.

Status of proceedings

11. In its summons filed 22 May 2019, Black Hill initially sought orders for urgent interlocutory relief as well as final relief.

12. The interlocutory dispute was brought before the Court on 22 May 2019, however because a hearing date was able to be allocated on 19 and 20 August 2019, interlocutory agreement was reached and Marist Youth provided an undertaking to the effect that it would not permit any other person (not already residing at the premises) to reside at the premises, except where an emergency request was made by the Minister. Marist Youth was released from that undertaking by Pain J by order made on 19 August 2019 when her Honour vacated the 19 and 20 August 2019 hearing dates.

13. On 6 June 2019, although a notice of motion seeking expedition had been filed, a timetable taking the matter to an early hearing was agreed between the parties and the Court listed the matter for final hearing on 19 and 20 August 2019.

14. On 5 July 2019, the Minister wrote to Black Hill to advise that, without admission, it was conducting a REF to meet the requirements of s 5.5 of the EPA Act (which was completed on 16 August 2019).

15. On 19 August 2019, primarily as a result of the Minister’s recent conduct regarding the REF, Pain J made orders to the following effect:

1. The hearing dates of 19 and 20 August 2019 were vacated;

2. Black Hill was to file and serve any further amended summons to be relied upon by 28 August 2019; and

3. The matter was listed for mention on 30 August 2019.

16. On 29 August 2019, Black Hill filed a further amended summons which deleted the Pt 5 challenge that asserted the Minister had failed to examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of the "transitional group home".

Evidence

17. Marist Youth relied on six affidavits in support of the Motion, including three affidavits of Katherine Patricia Edwards, solicitor for Marist Youth, dated 26 August 2019, 4 September 2019, and 18 September 2019; two affidavits of Peter Edward Monaghan, Chief Executive Officer of Marist Youth, dated 31 July 2019 and 29 August 2019; and an affidavit of Craig Layton, Executive Director, Child & Family within the Department of Communities and Justice (formerly the Department of Family and Community Services (‘FACS’)), dated 6 August 2019.

18. Ms Edward’s affidavit of 26 August 2019 primarily relates to Marist Youth’s application for expedition (a matter which is no longer pressed) and her affidavit of 4 September 2019 summarises the background to the matter and details the nature, composition, and financials of Black Hill; the incurred and anticipated costs of the proceedings; and Marist Youth’s position in support of the Motion. In her affidavit of 18 September 2019, Ms Edwards notes her analysis of the confidential documents produced by Black Hill on 6 September 2019, including a table in relation to contributions made to Black Hill’s bank account; residential locations of contributors to Black Hill’s bank account; contributions made by neighbours adjoining the premises; and an analysis of Black Hill’s bank statement as at 2 September 2019.

19. In his affidavit of 31 July 2019, Mr Monaghan details the role of the organisation and provides further information in relation to various matters including the legislation governing Marist Youth’s work, its contract and relationship with FACS and the Minister, and the services it provides from the premises. Mr Monaghan’s further affidavit sworn 29 August 2019 generally supports the expedition application which is no longer in issue.

20. Black Hill relied on three affidavits of Grant Long, solicitor for Black Hill, dated 16 August 2019, 18 September 2019, and 23 September 2019.

21. Mr Long’s affidavit of 16 August 2019 relates to, among other matters, the Minister’s REF. In his affidavit of 18 September 2019, Mr Long outlines inter alia, the object and composition of Black Hill; the issues in the proceedings; the significance of the issues beyond these proceedings; and the costs incurred by Black Hill to date. Mr Long’s affidavit of 23 September 2019 further deposes to the costs incurred by Black Hill and the amount thereof which has been paid.

Submissions

22. Black Hill and Marist Youth provided detailed written and oral submissions in respect of the Motion. Their positions are summarised as follows.

Marist Youth’s position

23. Marist Youth submits that the evidence before the Court, including bank records produced on 3 September 2019, reveals that Black Hill has no funds with which to meet an adverse costs order and as at the date of hearing of the Motion, Black Hill has incurred legal costs in the order of $240,000 of which approximately $101,000 has been paid. The records produced by Black Hill also indicate that the immediate neighbours of the subject property (who make up the membership of Black Hill) have contributed $100,000 to the costs of the proceedings, yet only a little over $500 remains to meet ongoing expenses and liabilities. The evidence also reveals that Black Hill has no identifiable source of income.

24. Although the proceedings were listed for hearing on 19 and 20 August 2019, the application to vacate these hearing dates was made by Black Hill and the hearing was vacated through no fault of Marist Youth. In these circumstances, Marist Youth has incurred legal fees in the sum of $340,000 and as the case is now listed for a three day hearing in late December, Marist Youth anticipates that it will incur further costs and expenses in the order of $142,500 to prepare for and conduct the final hearing.

25. The issue of security for costs was raised early in the litigation by Marist Youth and was not pursued in circumstances where Black Hill consented to the matter being brought to hearing expeditiously. While not relevant to the Motion currently before the Court, in light of the order to vacate the August hearing dates, Marist Youth subsequently sought to then expedite the hearing however when it became clear that there were no available hearing dates prior to December 2019, it withdrew the expedition application at the hearing of the Motion.

26. Marist Youth further submits that the members of Black Hill, to the extent that they perceive that there will be planning impacts on their properties, and are able to (as they have) continue to contribute substantial funds towards their own costs, should equally be expected to draw upon their resources to make a proportionate provision for the costs impacts of the case. Marist Youth would accept personal undertakings as an appropriate form of security from those who it suggests will most directly benefit.

27. In the circumstances, it would be unjust to expose Marist Youth to the financial burden of defending the claim brought primarily to protect against perceived planning impacts on members’ properties in circumstances where property owners standing behind those claims are protected from the usual cost risk by the corporate shield offered by the incorporation.

28. In relation to the prospects of success, Marist Youth submits that its use of the premises to accommodate vulnerable children with paid supervision and care fits neatly within the SEPP definition for “transitional group home” and could only be considered to be carried out “by or on behalf of a public authority”, particularly in circumstances where the Minister and Marist Youth (as the only two entities in the development relationship) both plead that the care provided by Marist Youth is “on behalf of” the Minister. As such, it would require the most exceptional circumstances for the Court to conclude that the mutual understanding between the Minister and Marist Youth was wrong, noting that the Minister has a continuing responsibility to accommodate children under s 164 of the Children and Young Persons (Care and Protection) Act 1998 (NSW).

29. Marist Youth submits that in relation to each of the outstanding issues at [10] above, Black Hill’s application must fail.

30. Marist Youth made further submissions in relation to the matters to be taken into account in determining an application for security for costs pursuant to r 42.21 of the UCPR as will be considered further below.

Black Hill’s position

31. Black Hill submits that the Motion should be dismissed given the delay in the application, the fact that there is significant public importance in the subject matter of the proceedings, and noting that it is a not-for-profit community organisation seeking to ensure compliance with environmental laws.

32. In relation to delay, Black Hill submits that the proceedings were commenced on 22 May 2019 and the Motion seeking security for costs was not filed until 4 September 2019 in circumstances where it has frequently been held by courts that such applications should be made promptly. Although Black Hill accepts that the question of security for costs was raised earlier by Marist Youth (on or about 29 May 2019), it submits that Marist Youth thereafter informed Black Hill that security for costs would not be pressed (due to the relatively short lead time to hearing) and Marist Youth did not raise the issue again prior to the present Motion being filed. In these circumstances, Black Hill submits that it has “significantly altered its position...by incurring significant costs in progressing the proceedings on the understanding that security for costs would not be sought”.

33. Black Hill submits that to the extent that Marist Youth relies upon the vacation of the August hearing dates, it could not be suggested that the vacation of those dates (although at the request of Black Hill) was a matter for which Black Hill was to blame, reminding the Court it was a consequence of the Minister’s conduct in issuing and approving the REF which was only finalised on 16 August 2019. Black Hill contends that such conduct by the Minister was clearly in response to the issues earlier raised by Black Hill in the proceedings.

34. Second, Black Hill says there is significant public importance in the subject matter of the proceedings which will have implications beyond the particular development in question. Black Hill submits that this is a relevant consideration pursuant to r 42.21(1A)(g) of the UCPR as well as cl 4.2(2) of the Land and Environment Court Rules 2007 (NSW) (‘LEC Rules’).

35. Black Hill further submits that the issue of whether or not the premises operated by Marist Youth are properly characterised as a “transitional group home” as well as the question of whether, pursuant to cl 43(1) of the SEPP, the development is carried out “by or on behalf of a public authority”, both have importance beyond this particular proposal. Black Hill contends that the manner and type of conduct on the premises is or will be sought to be undertaken in up to 9 locations around New South Wales. Therefore, the determination of this matter will have implications for similar existing and future developments in other locations.

36. In these circumstances, the clarification of what is meant by “on behalf of a public authority” and the benefits of planning and other exemptions that flow from such a descriptor will also have impacts beyond the subject proposal in the context of various statewide instruments (including State Environmental Planning Policy (Infrastructure) 2007, State Environmental Planning Policy (Educational Establishments and Child Care Facilities) 2017 and others) and could be an important issue for numerous other types of developments.

37. Third, Black Hill being a not-for-profit association with a wide community membership run by volunteers, commenced proceedings when it was clear that there had been no development approval under Pt 4 of the EPA Act nor any environmental assessment under Pt 5 of the Act. Given that Black Hill has 84 members, it is not the case that its “interest is confined to a relatively small number of members of a group or association in the immediate vicinity of the development”.

31. Whilst accepting its financial position (that it has outstanding legal costs of approximately $140,000), Black Hill points to the financial position of Marist Youth which, as shown by its annual financial report for 30 June 2018, has total equity in the sum of approximately $47,000,000.

Consideration

Legislative framework

39. The application for security for costs was made pursuant to r 42.21(1) of the UCPR which provides as follows:

42.21 Security for costs

(1)   If, in any proceedings, it appears to the court on the application of a defendant:

...

(d)  that there is reason to believe that a plaintiff, being a corporation, will be unable to pay the costs of the defendant if ordered to do so, or

...

the court may order the plaintiff to give such security as the court thinks fit, in such manner as the court directs, for the defendant’s costs of the proceedings and that the proceedings be stayed until the security is given.

40. Rule 42.21(1A) of the UCPR contains a non-exclusive list of factors the Court may have regard to in determining whether it is appropriate to make a security for costs order, including relevantly:

(1A)   …

(a)  the prospects of success or merits of the proceedings,

...

(c)  the impecuniosity of the plaintiff,

(d)  whether the plaintiff’s impecuniosity is attributable to the defendant’s conduct,

...

(f)   whether an order for security for costs would stifle the proceedings,

(g)  whether the proceedings involves a matter of public importance,

...

(i)   whether delay by the plaintiff in commencing the proceedings has prejudiced the defendant,

(j)   the costs of the proceedings,

(k)  whether the security sought is proportionate to the importance and complexity of the subject matter in dispute,

(l)   the timing of the application for security for costs,

…

41. Further, r 4.2(2) of the LEC Rules provides:

4.2 Proceedings brought in the public interest

...

(2)   The Court may decide not to make an order requiring an applicant in any proceedings to give security for the respondent’s costs if it is satisfied that the proceedings have been brought in the public interest.

...

Applicable principles

42. The purpose of an order for security for costs is to protect the respondent beneficiary of a costs order from having that order wholly frustrated by the inability of an applicant to satisfy it. It is a power that is “essentially...of risk-management between the parties having regard to their legitimate interests both as applicant and respondent”: G E Dal Pont, Law of Costs (4th ed, 2018, LexisNexis Butterworths (‘Dal Pont’) at 28.1.

43. In determining an application for security for costs, the Court needs to balance the risk of a respondent successfully defending proceedings and being unable to recover its costs, against the injustice which may be caused by preventing an impecunious applicant from litigating bona fide proceedings: Sharples v Minister for Local Government [2008] NSWLEC 67; (2008) 159 LGERA 391 (‘Sharples’) at [22]-[23], and Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 at [47].

44. The Court must achieve a balance between the protection of Marist Youth from the costs of successfully defending the proceedings and the injustice that may be caused by unfairly precluding Black Hill from litigating bona fide proceedings. The Court’s inherent or implied power to order security for costs is at large and unfettered.

45. In considering applications for security for costs, the factors to be taken into account in the exercise of the Court’s discretion are listed in r 42.21(1A) of the UCPR. Guidance is also gleaned from the approach considered by Beazley J in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 196-198.

46. The parties referred me to and I have considered various other authorities in relation to the ordering of security for costs, including Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664; (2004) 208 ALR 564 at [83], Sharples at [7]-[8], Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA 157 at [6]-[11], Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280 at [56], and ILC Group v Sydney Water Corporation [2014] NSWSC 1407 at [33].

Whether security for costs should be ordered

47. While I accept that delay in making an application for security for costs is a relevant consideration, not the least because a party is entitled to know its position in relation to security as early as practicable and indeed on one view, before it embarks to any real extent in litigation (Buckley v Bennell Design & Construction Pty Ltd (1974) 1 ACLR 301 at 309), I consider that the manner in which the litigation has progressed, albeit with some delay through no fault of either Marist Youth or Black Hill, is not indicative of disentitling delay by Marist Youth. I make this finding primarily because although Marist Youth raised security for costs as a matter of concern early in proceedings, its conduct in not pursuing it at a time when the parties agreed to a relatively expedited hearing is understandable. Further, the fact that the August hearing dates were vacated (in circumstances where apparently most if not all preparation had been undertaken) is not, in my view, a disentitling factor in the present application.

48. While security for costs is not “a card that a defendant can keep up its sleeve and can play at its convenience” (Christou v Stanton Partners Australasia Pty Ltd [2011] WASCA 176 at [20], and Dal Pont at 29.124), in all the circumstances, I do not consider that Marist Youth has engaged in delay in instituting the present application. I do not consider that the lapse of time has caused unfairness to Black Hill.

49. Further, although not determinative, the mere fact that Black Hill is a not-for-profit association does not give it free reign to bring proceedings without regard to the detriment which those proceedings may cause to a respondent such as Marist Youth in the event it is unable to meet an adverse costs order.

50. Although there is dispute in relation to the strength of Black Hill’s case, as I indicated to the parties during hearing, I consider that the case is properly arguable. In any event, I do not find this aspect to be particularly compelling as I have not heard detailed argument in relation to the outstanding issues.

51. I am conscious that there are material differences between the principles to be applied in awarding costs to a successful party and granting security for costs. Costs are usually determined after the completion of the litigation, when all evidence is in, the law considered and the decision given. In those circumstances, the outcome of the litigation is central to a consideration of what order as to costs ought to be made. Contrastingly, in relation to an application for security for costs, all that is usually known is that the proceedings were regularly commenced and the case is arguable. The outcome is not known and the strength of the claimant’s case cannot be assessed. Therefore, the considerations applicable to security for costs applications are quite different to final costs applications: Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82; [2002] NSWCA 32 at [27]-[28].

52. Further, there is no doubt that Black Hill’s impecuniosity, if that description is appropriate, is not attributable to Marist Youth’s conduct.

53. In relation to whether an order for security for costs would stifle the proceedings, although that submission was not put directly, Ms Mee submitted that it was an available inference given the state of Black Hill’s finances and the likely costs of the ongoing conduct of the proceedings. Despite this, I accept the submission made on behalf of Marist Youth that there is no evidence that Black Hill (with its 84 members) could not provide some security for Marist Youth’s costs yet to be incurred.

54. The evidence before the Court is that a limited number of members of the association have been able to make not insubstantial contributions towards the legal costs of Black Hill. In these circumstances, I cannot conclude that an order for security for costs (in what might be seen to be a modest amount) would necessarily stifle the proceedings. Even if that were not the case, I do not accept that it would necessarily mean that another interested party could not or would not support the litigation in light of the relevant open standing provisions, although, again, I do not consider this to be a significant factor.

55. In response to whether the proceedings could be classified as having been brought in the public interest (particularly in relation to r 4.2(2) of the LEC Rules), Marist Youth accepts that the prompt determination of proceedings involves a matter of high public importance because of what it says is the nature of the critical care services that are offered at the premises. I accept Mr Tomasetti’s submission that this point was advanced to support the expedition application as, if the proceedings were expedited, those services could be offered more promptly.

56. Although Ms Mee made submissions as to the “significant public importance” of the subject matter of the case, and while I accept that there may be implications for existing and future developments of a not dissimilar nature, I do not find that these proceedings may properly be characterised as public interest proceedings sufficient to displace a security for costs order (if one was otherwise appropriate). While I accept that Black Hill is raising matters that involve the public interest, I do not consider that this of itself would mean that it would not be ordered to pay costs in the event that it is unsuccessful at the hearing.

57. I consider that r 4.2(2) of the LEC Rules is but one factor, amongst others, the Court takes into account in the exercise of its discretion. I do not consider that the requisite public interest is served by this litigation so as to trigger the discretion under r 4.2(2) of the LEC Rules to refuse to make a security for costs order because: first, I consider that the primary interest of Black Hill (and its members) relates to the planning consequences of the use of the premises; and second, there is little evidence of concerns extending beyond these planning impacts.

58. For avoidance of doubt, s 98 of the Civil Procedure Act 2005 (NSW) and r 42.1 of the UCPR support the proposition that costs are at the discretion of the Court and the usual order is that costs follow the event. While not directly relevant to this application, I consider that in order to justify departure from the usual order for costs, it is necessary that there be some factor in addition to the public interest nature of the litigation (such as an important question of statutory construction or the breaking of new ground on a matter of legal principle): Roy Kennedy v Director-General of the Department of Environment and Conservation and Another [No. 2] [2007] NSWLEC 271 at [13], Burrell Place Community Action Group Incorporated v Griffith City Council [2009] NSWLEC 120 at [20]-[21], and Sales-Cini v Wyong City Council [2009] NSWLEC 201 at [60].

59. Balancing the hardship Marist Youth may suffer in the absence of a security for costs order against the hardship Black Hill may suffer if it is ordered to give security, and having regard to the relevant considerations in r 42.21(1A) of the UCPR, I find it appropriate in the circumstances to grant the relief sought in the Motion and make a security for costs order.

60. The uncontested evidence is that Marist Youth anticipates that it will incur costs in the order of $142,500 to prepare for and attend the hearing irrespective of the fact that it has incurred approximately $340,000 in legal fees to date. I accept Black Hill’s submission that the security should not seek to include an amount for costs already incurred.

61. The amount of security that I consider to be appropriate is well short of the costs that Marist Youth anticipates it will incur. In all the circumstances, I consider that security in the amount of $40,000 is appropriate and I consider it reasonable that Black Hill should be afforded some time in which to provide the security. As such, the security should be paid by two instalments, each of $20,000. The first instalment is to be paid on or before 31 October 2019 and the second instalment is to be paid on or before 29 November 2019.

62. While I am conscious that the security ordered should not be illusory or oppressive, I consider that the quantum I have determined is not such that would cripple Black Hill’s capacity to continue, and it is sufficient a measure of security to Marist Youth for the costs it will incur in defending the proceedings.

63. Although Black Hill has not been successful in resisting an order for security for costs and although for the purpose of considering the application for security, I am of the preliminary view that these proceedings do not constitute public interest proceedings, I have not heard detailed argument on that particular question and in the circumstances, I reserve costs of the Motion.

Orders

64. The Court orders:

1. The first respondent’s notice of motion filed 4 September 2019 seeking security for costs is upheld.

2. Pursuant to r 42.21 of the Uniform Civil Procedure Rules 2005 (NSW), Black Hill Residents Group Incorporated is to provide security for costs of Marist Youth Care Limited (Trading as MARIST180) in the amount of $40,000 in the following tranches:

1. the first tranche of $20,000 to be paid on or before 31 October 2019; and

2. the second tranche of $20,000 to be paid on or before 29 November 2019, in a form acceptable to the Registrar.

3. The proceedings be stayed permanently or until further order of the Court if security is not provided in accordance with Order (2) above.

4. Costs of the motion reserved.

5. The substantive matter is stood over to 9.00am on 6 December 2019 for pre-trial mention.

**********

Amendments

31 December 2019 - Anonymisation amendments to par [3].

Decision last updated: 31 December 2019