Supreme Court New South Wales Medium Neutral Citation: HOOSH Inc (Haberfield out of school hours) v State of New South Wales [2017] NSWSC 379 Hearing dates: 7 April 2017 Date of orders: 07 April 2017 Decision date: 07 April 2017 Jurisdiction: Equity Before: Kunc J Decision: Declaration made by consent Catchwords: PRACTICE – Declaratory judgments and orders – Whether to be made by consent – No issue of principle Cases Cited: HOOSH Inc (Haberfield out of school hours) v State of New South Wales [2016] NSWSC 953 Category: Principal judgment Parties: HOOSH Inc (Haberfield out of school hours) (Plaintiff) State of New South Wales (Defendant) Representation: Solicitors: Lincoln Smith & Company (Plaintiff) Hunt & Hunt (Defendant) File Number(s): 2016/154539 Publication restriction: No EX TEMPORE Judgment 1. HIS HONOUR: This is an application for the Court to make consent orders disposing of the outstanding parts of litigation between the plaintiff ("HOOSH") and the State of New South Wales that was primarily resolved by the judgment of Stevenson J in HOOSH Inc (Haberfield out of school hours) v State of New South Wales [2016] NSWSC 953. These reasons should be read in conjunction with his Honour's judgment. 2. In short, HOOSH had a licence from the State to use part of the Haberfield Public School site for the purposes of operating a child care centre from a building which HOOSH had erected on the site (the "Building"). The period of the licence was for ten years. The dispute between the parties was whether or not HOOSH had validly exercised a right to renew the licence. Stevenson J's decision, in effect, disposed of the litigation by finding that HOOSH had not validly done so. In any event, his Honour concluded, unlike the more usual lease or licence case, that the valid exercise of the option would only enliven a discretion in the Minister to grant a further licence. The practical result of his Honour's judgment was that HOOSH's entitlement to occupy that part of the Haberfield Public School site on which the Building was erected was at an end. 3. The remaining issue concerns the status of the Building. Clause 2.5 of the Deed of Licence between HOOSH and the State made on 11 March 2004 (the "Deed") provides: "2.5 Ownership 2.5.1 At the determination of this Licence, all permanent structures erected by the Licensee shall become the property of the Licensor. 2.5.2 At the determination of this Licence, and in the event the structure constructed is demountable, it shall be removed by the Licensee at his cost within one calendar month of the date of determination and within ninenty (90) days of the date of determination restore the premises to its original condition and otherwise leave it in a good clean wholesome and tidy condition." 1. It will be apparent from the terms of cl 2.5 that the rights of the parties in relation to the Building depended upon whether or not it was a 'permanent' structure or a 'demountable' structure for the purposes of cl 2.5. 2. Stevenson J ordered that issue to be considered by experts. Experts were retained and the Court has now been provided with a copy of their joint report and the full report of Mr Nolan, who had been retained on behalf of the State. 3. The parties have resolved the proceedings by coming to an agreement that the Building is a permanent structure for the purposes of cl 2.5 of the Deed. They invite the Court to make a declaration to that effect. 4. That invitation invokes the well‑known principles that govern whether or not the Court should make a declaration by consent. Notwithstanding it is by consent, the Court retains a discretion whether or not to do so. At the very least, the Court is required to be satisfied that there is an evidentiary basis for the declaration to be made. Furthermore, in accordance with the usual principles, the Court must be satisfied that there is utility in making the declaration. For reasons which I shall set out briefly, the Court is satisfied that both of those prerequisites have been met and the discretion to make the declaration should be exercised. 5. Mr Nolan's report contains photographs of the Building. The Court will reproduce some of those photographs as an annexure to this judgment, in order to dispel what might be a prima facie assumption about what a demountable building looks like. It is to be noted that, in particular, the Building is built on steel supports cast into concrete footings with posts welded to beams. It appears to be a considerably more permanent structure then, for example, demountable classrooms that are often seen in the playgrounds of many schools. 6. The experts were unable to agree on whether the building was properly described as a "permanent" or "demountable" structure. Surprisingly, there is no definition of a demountable building in the Building Code of Australia or in the Australian Standards relating to construction. Mr Nolan's report, after describing the structure in question, makes this, with respect, obvious observation: "7.1 In my opinion, most buildings can be dismantled or removed from their current setting with varying degrees of difficulty and cost. However not all buildilngs can then be readily reassembled or repositioned. In my opinion buildings which cannot be readily reassembled or repositionsed should be considered permanent." 1. Mr Nolan ultimately concludes: ""8.1 In my opinion the HOOSH Building located at Haberfield Public School is not a demountable buiding. In my opinion the HOOSH Building is a permanent building. 8.2 My opinion is based on the fact that in order to facilitate relocation of the building; external and internal finishes would need to be cut and would require replacement, replacement of structural elements would be required following cutting of the building into sections and structural alterations/strengthening would be required in order to allow the building to be lifted by crane. I consider these points to mean that the building cannot be readily located." 1. Quite apart from the fact that the parties are now in agreement as to the correct characterisation of the Building, Mr Nolan's report provides an evidentiary foundation for the declaration that is sought. Based on Mr Nolan's report and the Court's own consideration of the matter, the Court has no hesitation in finding that the Building in question is a "permanent" structure for the purposes of cl 2.5 of the Deed. 2. This leads to the question of the utility of the declaration. The Court is satisfied that there is utility in making the declaration for at least two reasons. 3. First, there is utility as between the parties because, as was submitted for HOOSH, it definitively determines that the Building is not one of the kind referred to in cl 2.5.2 in relation to which HOOSH would have had an obligation to remove and take related steps at its own expense. 4. Second, it is useful for the State to have the benefit of a declaration which, in practical terms, determines ownership of the Building. While the Court's declaration will not be binding on all the world and is confined in its immediate effect to the parties to the litigation, the State, not unreasonably, wishes some assurance that it could not be seriously doubted that the Building is now the property of the State. A declaration to that effect, albeit inter partes, will obviously satisfy that requirement. 5. The requirement is not academic. I have been informed from the Bar table that the State intends to enter into an arrangement with another operator, whether by way of lease or licence, to provide child care services in the Building. The State therefore wishes to have some assurance, which it can also give to the new operator, that the State is both in fact and law entitled to grant whatever interest may ultimately be agreed between the State and the new operator in the Building. 6. For these reasons the Court will make the consent orders sought by the parties. Those orders will include a declaration as to the status of the Building and otherwise bring the proceedings to finality. The orders of the Court are that the Court makes orders in accordance with the consent orders which I initial, date today and place with the papers. Annexure HOOSH judgment 7.4.17 (78.2 KB, pdf) ********** 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: 10 April 2017