BLACK Hill residents have until November to find $40,000 or their court case against a Catholic-run facility for troubled youths is permanently stopped.
Marist Youth obtained a court order requiring Black Hill Residents Group to pay the money after telling a Land and Environment Court judge the group has no money to pay Marist Youth's legal costs if the Catholic organisation wins a three-day hearing in December.
Marist Youth's legal bill fighting Black Hill residents has already reached $340,000, the court was told. Marist Youth expects the December hearing will add another $140,000 to its legal bill, leaving the Black Hill group exposed to a potential costs order close to $500,000 if it loses the case.
The court was told Black Hill Residents Group has a current bank balance of $500. Land and Environment Court Justice John Robson was told the group has run up a legal bill so far of $240,000 to stop the Marist Youth proposal, but only $101,000 has been paid.
Group financial records produced to the court show immediate neighbours of the proposed development on Phoenix Road have contributed $100,000, although the group has 84 members.
"The evidence also reveals that Black Hill has no identifiable source of income," Justice Robson said.
Black Hill Residents Group initiated court action on May 22 after Marist Youth bought the property in the quiet rural area 27 kilometres from Newcastle CBD for a proposed Newcastle Intensive Therapeutic Care Hub. The facility plans to offer intensive therapeutic transitional care for troubled youths on behalf of Families, Communities and Disability Services Minister Gareth Ward.
The Black Hill group has argued the facility is prohibited in the area or requires development consent because it is not just a transitional group home.
Marist Youth has argued the development is permissible without development consent. On August 16 the minister finalised and approved a review of environmental factors for the project.
The evidence also reveals that Black Hill has no identifiable source of income.Land and Environment Court Justice John Robson.
Marist Youth argues its use of the site to accommodate vulnerable children with paid supervision and care "fits neatly" within the state planning policy definition of "transitional group home". The minister, listed as second defendant in the case, agreed Marist Youth is acting on his behalf in providing the facility.
The Catholic organisation told the court it would require "the most exceptional circumstances for the court to conclude that the mutual understanding between the minister and the Marist Youth was wrong".
It said 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".
Black Hill Residents Group asked Justice Robson to dismiss the Marist application, saying it is a not-for-profit community organisation seeking to ensure compliance with environmental laws. It noted Marist Youth's June 30, 2018 annual financial report showed it had total equity of $47 million.
Justice Robson ruled against the Black Hill group, after telling the court he needed to "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 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," Justice Robson said.
"Although there is dispute in relation to the strength of Black Hill's case... I consider that the case is properly arguable."
Justice Robson ordered that the Black Hill group pay $20,000 as security by October 31, and a second $20,000 by November 29, or their case against Marist Youth and the minister will be permanently stopped.
The $40,000 "is not such that would cripple Black Hill's capacity to continue", he said.