Hoxton Park Residents Action Group Inc v Liverpool City Council (No 2)

The proceeding involved the Hoxton Park Residents Action Group Inc. (the applicants) appealing from orders made by the Equity Division of the Supreme Court of New South Wales. The respondents included Liverpool City Council, the State of New South Wales, the Commonwealth of Australia, the Australian Federation of Islamic Councils Inc., and the Malek Fahd Islamic School Ltd. The dispute concerned the validity of Commonwealth legislation providing funding for schools, specifically the Australian Federation of Islamic Councils Inc. and the Malek Fahd Islamic School Ltd., and claims in nuisance and negligence against Liverpool City Council.

The primary legal issues before the Court of Appeal were whether the applicants should be granted leave to appeal from the earlier orders, and if so, the extent of that appeal. Specifically, the court considered the constitutional validity of the Commonwealth legislation under section 116 of the Constitution, the application of section 5 of the Australia Act 1986 (Cth) to State legislative power, and the legal status of local government bodies as consent authorities. The court also addressed whether the applicants had a reasonable cause of action in nuisance and negligence, and whether they should have been afforded an opportunity to replead these claims.

The Court of Appeal reasoned that while section 116 of the Constitution does not apply to State legislative power, the applicants' challenges to the Commonwealth legislation were not necessarily precluded by existing High Court authority, particularly given the specific facts alleged. The court found that the applicants' claims in nuisance and negligence, which had been dismissed without leave to replead, ought to have been permitted to proceed. Consequently, the court granted leave to appeal on grounds limited to the constitutional validity of the Commonwealth funding legislation and the claims in nuisance and negligence. The appeal was allowed, and the previous orders were set aside insofar as they dismissed these specific claims. The matter was remitted to the Equity Division for further conduct.