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ACQUISTA INVESTMENTS PTY LTD & ANOR v THE URBAN RENEWAL AUTHORITY & ORS [2014] SASC 206 (24 December 2014)

Last Updated: 12 January 2015

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)


DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment 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 in which it was generated.


ACQUISTA INVESTMENTS PTY LTD & ANOR v THE URBAN RENEWAL AUTHORITY & ORS


[2014] SASC 206


Judgment of The Honourable Justice Blue


24 December 2014


ADMINISTRATIVE LAW - JUDICIAL REVIEW - GENERALLY

ADMINISTRATIVE LAW - JUDICIAL REVIEW - REVIEWABLE DECISIONS AND CONDUCT

ADMINISTRATIVE LAW - JUDICIAL REVIEW - STANDING TO INSTITUTE PROCEEDINGS

ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - DELEGATION OF POWER

ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - UNREASONABLENESS

ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - IRRELEVANT CONSIDERATIONS

The plaintiffs seek judicial review of a decision by the first defendant, the Urban Renewal Authority, to enter into a contract with the third defendant, Adelaide Capital Partners, granting options to purchase part or all of 407 hectares of land at Gillman, South Australia.

The contract was between the Authority, Adelaide Capital Partners and the Minister for State Development. It was executed by the Authority’s Chief Executive on its behalf.

The Board of the Authority had formally delegated the function of granting contract pre-authorisation in respect of certain contracts to Cabinet when the consideration was $11 million or over. At the same time, it had formally delegated the function of executing a contract concerning the disposal of land when the consideration was over $4.4 million to the Chief Executive (with approval of the Minister for Housing and Urban Development).

The plaintiffs contend that the first delegation had no application to the contract and in any event Cabinet’s function would only have been to give approval in principle, leaving the substantive decision to be made by the Authority. They contend that, on its proper construction, the second delegation delegated power to make the substantive decision whether to enter into such a contract to the Chief Executive, provided that he first obtained approval in principle from the Minister before executing the contract. The defendants contend that power to make the substantive decision to enter into the contract was delegated to Cabinet under the first delegation or alternatively by a specific ad hoc authority conferred by a board resolution on 29 November 2013. In the alternative, they contend that power to make the substantive decision to enter into the contract was delegated by the second delegation to the Minister for Housing and Urban Development and the role of the Chief Executive was largely ministerial. The third defendant contends in the alternative that the Chief Executive had actual authority, implied or under power of attorney, or ostensible authority and in any event his execution of the contract was ratified by the Authority’s defence of this action.

The plaintiffs contend that, if the Chief Executive had authority to execute the contract, the decision to enter into the contract and the contract itself are void because the decision was made contrary to a requirement imposed by section 11 of the Public Corporations Act 1993 (SA) that the Authority perform its commercial operations in accordance with prudent commercial principles, the decision was made without regard to a relevant factor, namely those principles, and the decision was unreasonable in the Wednesbury sense. The defendants take issue with these contentions.

The defendants contend that the plaintiffs do not have standing to bring judicial review proceedings and in any event the decision to enter into a contract is not amenable to review. They also contend that, if the decision was subject of any of the three infirmities alleged by the plaintiffs, the contract was nevertheless valid and the Court has no power in the circumstances to restrain the parties from performing it.

Held by Blue J:

1. The plaintiffs have standing to bring the judicial review proceedings (at [240]-[244]).

2. The decision to enter into the contract is amenable to judicial review (at [273],[282]-[287]).

3. The first delegation to Cabinet did not apply to the decision to enter into the contract (at [329], [351).

4. The Chief Executive did not have authority actual or ostensible, apart from the second delegation, to enter into or execute the contract and the Authority did not ratify the Chief Executive’s decision to enter into the contract (at [399]-[400], [450]-[451], [457]).

5. On its proper construction, the second delegation delegated power to make the substantive decision to the Chief Executive, subject to obtaining the approval in principle of the Minister (at [394]).

6. The Chief Executive made the substantive decision to enter into the contract and obtained the approval in principle of the Minister (at [417]-[428]).

7. The decision by the Chief Executive to enter into the contract was a decision that no reasonable person in the position of the Chief Executive could have made (at [550]-[564]).

8. The decision by the Chief Executive to enter into the contract was made without regard to a relevant factor, namely prudent commercial principles consistent with the Authority’s functions (at [578) and was made in contravention of section 11 of the Public Corporations Act (at [578]).

9. Notwithstanding the infirmities of the decision making, the contract is valid and there is no basis on which to restrain the parties from performing it (at [611]-[627]).

Administrative Decisions (Judicial Review) Act 1977 (Cth); Environment Protection Act 1993 (SA); Environment Protection Regulations 2009 (SA); Housing and Urban Development (Administrative Arrangements) Act 1995 (SA) s 5(b); Migration Act 1958 (Cth); Public Corporations Act 1993 (SA) s 11; Public Corporations (Land Management Corporation) (Dissolution and Revocation) Regulations 2012 (SA); Public Corporations (Land Management Corporation) Regulations 1997 (SA) , referred to.

Associated Provincial Picture Houses Ltd v Wednesbury Corp [1947] EWCA Civ 1; [1948] 1 KB 223; Cooney v The Council for the Municipality of Ku-ring-gai [1963] HCA 47; (1963) 114 CLR 582; Fry v Smellie [1912] 3 KB 282; Harrisons & Crossfield Ltd v London & North-Western Railway Co [1917] 2 KB 755; In Re Portuguese Consolidated Copper Mines Ltd (1890) LR 45 Ch D 16; Jones v Peters [1948] VicLawRp 56; [1948] VLR 331; Lifesavers (Australasia) Ltd v Frigmobile Pty Ltd [1983] 1 NSWLR 431; Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24; Minister for Immigration and Citizenship v Li [2013] HCA 18, (2013) 249 CLR 332; Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35, (2004) 218 CLR 451; Petersen v Moloney [1951] HCA 57; (1951) 84 CLR 91; Paterson v McCallum [1921] NZLR 869; Presentaciones Musicales SA v Secunda [1995] EMLR 118, [1994] Ch 271; Re Reference under s 11 Ombudsman Act 1976; Ex parte Director-General of Social Services (1979) 2 ALD 86; Savery v King [1856] EngR 534; (1856) 5 HL Cas 627; 10 ER 1046; Scott v Bagshaw [1999] FCA 674, (1999) 92 FCR 424; Secretary, Department of Social Security v Alvaro [1994] FCA 1124; (1994) 50 FCR 213; Sharp v Wakefield [1891] AC 173; Taylor v Smith [1926] HCA 16; (1926) 38 CLR 48; Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1; [1972] AC 153; The Baumwoll Manufactur Von Carl Scheibler v Furness [1893] AC 8; The Phoenix Assurance Co Ltd v Berechree [1906] HCA 6; (1906) 3 CLR 946; The State of New South Wales v Bardolph (1934) 52 CLR 455; Tipperary Developments Pty Ltd v Western Australia [2009] WASCA 126, (2009) 38 WAR 488; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd & Ors [2004] HCA 52, (2004) 219 CLR 165; Victorian Professional Group Management Pty Ltd v The Proprietors “Surfers Aquarius” Building Units Plan No 3881 [1991] 1 Qd R 487; Wilson v Tumman and Fretson (1843) 6 M&G 235, applied.

Bateman's Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd [1998] HCA 49, (1998) 194 CLR 247; Broadbent v Medical Board of Queensland [2011] FCA 980, (2011) 195 FCR 438; Commissioner of Taxation of the Commonwealth of Australia v Futuris Corp Ltd [2008] HCA 32, (2008) 237 CLR 146; Holmes v Commissioner of Police  [2011] NTSC 108 , (2011) 30 NTLR 195; No 2 Pitt Street Pty Ltd v Wodonga Rural City Council [1999] 3 VR 439; Sydney Municipal Council v Hermann [1948] NSWStRp 52; (1948) 49 SR (NSW) 46; R (on the application of Lemon Land Ltd) v The Mayor and Burgesses of the London Borough of Hackney [2001] EWHC Admin 336; R (on the application of Ise Lodge Amenity Committee) v Kettering Borough Council [2002] EWHC Admin 1132, [2002] All ER (D) 525; R (on the application of Structadene Ltd) v Hackney London Borough Council [2000] EWHC Admin 405; [2001] 2 All ER 225, distinguished.

Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth of Australia [1977] HCA 71; (1977) 139 CLR 54; Armagas Ltd v Mundogas SA [1985] UKHL 11; [1986] 1 AC 717; Australian Broadcasting Corporation v Redmore Pty Ltd [1989] HCA 15; (1989) 166 CLR 454; Bolton Partners v Lambert (1889) LR 41 Ch D 295; Davison v Vickery’s Motors Ltd (in liq) [1925] HCA 47; (1925) 37 CLR 1; Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149; Khuu & Lee Pty Ltd v Corporation of the City of Adelaide [2011] SASCFC 70; (2011) 110 SASR 235; MBA Land Holdings Pty Ltd v Gungahlin Development Authority [2000] ACTSC 89; (2000) 206 FLR 120; Mercury Energy Ltd v Electricity Corporation of New Zealand Ltd [1994] 2 NZLR 385; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, (1998) 194 CLR 355; R v Anderson; Ex parte IPEC-Air Pty Ltd [1965] HCA 27; (1965) 113 CLR 177; The Royal British Bank v Turquand [1856] EngR 470; (1856) 6 EL & BL 327, 119 ER 886; The State of Victoria v The Master Builders Association of Victoria [1995] VicRp 46; [1995] 2 VR 112; White v Tomasel [2004] QCA 89, [2004] 2 Qd R 438; Xenophon v State of South Australia [2000] SASC 327; (2000) 78 SASR 251, discussed.

Barton v Commonwealth of Australia (1974) 131 CLR 447; Council of Civil Service Unions v Minister for The Civil Service [1985] 1 AC 374; Foster v Minister for Customs and Justice [2000] HCA 38, (2000) 200 CLR 442; Ling v Commonwealth of Australia [1994] FCA 1156; (1994) 51 FCR 88; Montreal Street Railway Co v Normandin [1917] UKPC 2; [1917] AC 170; Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476; Simpson v Attorney-General (NZ) [1955] NZLR 271; Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492; Edwards v Santos Ltd [2011] HCA 8, (2011) 242 CLR 421; Shop Distributive and Allied Employees Association v Minister for Industrial Affairs of the State of South Australia (1995) 183 CLR 552; The State of Victoria v The Master Builders Association of Victoria [1995] VicRp 47; [1995] 2 VR 121; Wentworth v Woollahra Municipal Council [1982] HCA 41; (1982) 149 CLR 672, considered.


ACQUISTA INVESTMENTS PTY LTD & ANOR v THE URBAN RENEWAL AUTHORITY & ORS
[2014] SASC 206



Judicial Review:


BLUE J:


Table of Contents


  1. This is an action for judicial review.
  2. In December 2013, a decision was made purportedly on behalf of the first defendant, the Urban Renewal Authority (the Authority), to enter into a contract with the third defendant, Adelaide Capital Partners Pty Ltd (ACP). The contract was for the grant by the Authority to ACP of three succesive options (the Options) to purchase portions of 407 hectares of land owned by the Authority at Gillman, South Australia (the Land).
  3. On 11 December 2013, the Chief Executive of the Authority executed purportedly on behalf of the Authority a deed entitled the Lipson Industrial Estate Option Deed (the Contract). The Contract was executed by the Minister for State Development on 11 or 12 December and by ACP on 13 December 2013. It was dated 13 December 2013. It provided for the grant of the Options on terms and conditions and for the sale and purchase of the relevant portions of the Land on terms and conditions on the exercise by ACP of an Option.
  4. The plaintiffs contend that the person or persons who made the substantive decision to enter into the Contract (the Contract Decision) purportedly on behalf of the Authority did not have power or authority to do so, the Chief Executive did not have authority to execute the Contract and the Contract is void.
  5. The plaintiffs’ primary contention is that the substantive decision to enter into the Contract was made by Cabinet but the board of the Authority had not delegated to Cabinet power to make any relevant decision or at least the substantive decision to enter into the Contract. Alternatively, if the substantive decision to enter into the Contract was made by the Minister for Housing and Urban Development (the Minister for Urban Development) (which the plaintiffs deny), the board had not delegated to the Minister for Urban Development power to make that decision as opposed to granting approval in principle as a pre-condition to the Chief Executive making that decision. Alternatively, if the substantive decision to enter into the Contract was made by the Chief Executive (which the plaintiffs deny), he had not obtained the approval in principle of the Minister for Urban Development and therefore did not have power to enter into the Contract.
  6. The plaintiffs contend in the alternative that the substantive decision to enter into the Contract was made not in accordance with prudent commercial principles in breach of section 11 of the Public Corporations Act 1993 (SA) (the Public Corporations Act) or was made without taking into account a mandatory relevant factor, namely prudent commercial principles, or was so unreasonable that no reasonable person could have made it. Therefore the Contract Decision and the Contract are void or alternatively the Contract Decision and entry into the Contract by the Authority were unlawful and the parties should be restrained from performing the Contract.
  7. The plaintiffs also seek judicial review on the same three alternative grounds of the decision by the board of the Authority on 29 November 2013 to provide advice to the Minister for Urban Development (the Advice Decision) and of the decision by the Minister for State Development on 11 or 12 December 2013 to enter into the Contract (the MSD Decision).
  8. The defendants contend in limine that the plaintiffs lack standing and in any event none of the decisions are amenable to review.
  9. The defendants’ primary contention is that the substantive decision to enter into the Contract was made by Cabinet and the board had delegated to Cabinet power to make that decision. Alternatively, that decision was made by the Minister for Urban Development and the board had delegated to the Minister power to make that decision. Alternatively, the third defendant contends that the Contract Decision was made by the Chief Executive who had power to do so under delegation or general law implied or ostensible authority or his decision was ratified by the Authority by its defence of this action.
  10. The defendants deny that the plaintiffs have established any of the three grounds of review on the merits. They contend that in any event the Contract is not liable to be declared void and the parties are not liable to be restrained from performing it and relief should in any event be refused in the discretion of the Court.
  11. The action raises the following principal issues:
    1. Do the plaintiffs have standing to seek judicial review?
    2. Are the decisions amenable to judicial review?
    3. Was the Contract Decision made:

(a) by Cabinet, or

(b) by the Minister for Urban Development, or

(c) by the Chief Executive with the approval of the Minister for Urban Development,

pursuant to delegation by the board of the Authority or otherwise so as to have been made within power or authority conferred by the Authority?

  1. Does section 11 of the Public Corporations Act:

(a) render void a decision by a public corporation in the performance of its commercial operations not in accordance with prudent commercial principles and/or not using its best endeavours to achieve a level of profit consistent with its functions?

(b) alternatively render unlawful such a decision and if so does an injunction lie to restrain the parties from performing a contract made in implementation of the decision?

  1. If issue 4 is answered in the affirmative, was the Contract Decision[1] made in breach of section 11 of the Public Corporations Act?
  2. Was the Contract Decision[2] a decision no reasonable person in the decision-maker’s position could have made?
  3. Did the decision-maker in making the Contract Decision[3] fail to take into account a mandatory relevant consideration?
  4. If issue 3 is answered in the negative or issues 4, 5, 6 or 7 are answered in the affirmative, is the Contract void as between the Authority and ACP?
  5. If issue 8 is answered in the affirmative, is the position different because the Minister for State Development is a party?
  6. Should any discretion be exercised in favour of declaring the Contract Decision and the Contract void or restraining the defendants from implementing the Contract Decision or performing the Contract?

PART A: THE LEGISLATIVE REGIME
The Public Corporations Act

  1. The Public Corporations Act[4] was enacted in 1993 in the wake of the collapse of the State Bank. A provision of the Public Corporations Act applies to those statutory corporations (public corporations) to which it is declared to apply by the corporations’ incorporating Acts or by regulation.[5]
  2. Part 2 of the Public Corporations Act is entitled “Ministerial control”. Sections 8, 9 and 10 address the entitlement of the responsible Minister or the Treasurer to attend, and have access to board papers for, board meetings of a public corporation and disclosure of matters to those Ministers.[6]
  3. Part 3 of the Public Corporations Act is entitled “Performance and scope of corporation’s operations” and comprises sections 11 to 13. Section 11 addresses the manner in which a public corporation is required to perform its commercial and non-commercial operations. Section 11 provides:
11—General performance principles
(1) A public corporation must perform its commercial operations in accordance with prudent commercial principles and use its best endeavours to achieve a level of profit consistent with its functions.
(2) A public corporation must perform its non-commercial operations (if any) in an efficient and effective manner consistent with the requirements of its charter.
(3) Where a public corporation's charter identifies any operations of the corporation as non-commercial operations, the operations are to be regarded as such for the purposes of this section.
  1. Sections 12 and 13 require the responsible Minister and the Treasurer, after consultation with the public corporation, to prepare and review annually a charter dealing, inter alia, with the nature and scope of the commercial operations and any non-commercial operations to be undertaken and a performance statement setting performance targets the corporation is to pursue in the coming financial year or other period.
  2. Part 4 is entitled “Duties and liabilities of board and directors”. It comprises sections 14 to 22.

The Housing and Urban Development (Administrative Arrangements) Act and Regulations

  1. The Housing and Urban Development (Administrative Arrangements) Act 1995 (SA)[7] (the Act) was enacted in 1995 to provide for various matters relating to the public administration of housing and urban development within the State; to provide for the creation of certain bodies to facilitate development within the State; and for other purposes.
  2. Part 3 of the Act is entitled “Statutory Corporations”. Section 8 empowers the Governor to make regulations establishing a statutory corporation under the Act, providing for the constitution of a board of management as its governing body and specifying its functions. Section 8(3) provides that, subject to a limitation imposed by or under an Act, a statutory corporation has all the powers of a natural person together with the powers specifically conferred on it by or under the Act or other Acts. Regulations might also limit its powers and make other provisions necessary or expedient for its purposes. Sections 10 to 15 address appointment by the Governor of board members and proceedings at board meetings.
  3. Section 19 gives a power of delegation to a board of a statutory corporation. Section 19 provides:
19—Delegations
(1) A board may delegate a function or power conferred on or vested in the board (or its statutory corporation) under this Act—
(a) to a specified person or body; or
(b) to a person occupying a specified office or position.
(2) A delegation—
(a) may be made subject to conditions and limitations specified in the instrument of delegation; and
(b) if the instrument of delegation so provides, may be further delegated by the delegate; and
(c) is revocable at will and does not prevent the board from acting itself in a matter.
  1. Section 21 defines the powers that might be exercised by a statutory corporation. Section 21(1) relevantly provides:
21—Specific powers
(1) Without limiting another provision of this Act, but subject to a limitation or condition imposed by the Minister in relation to the statutory corporation, a statutory corporation may—
(a) sue and be sued;
(b) acquire, hold, deal with and dispose of real and personal property (or an interest in real or personal property), and grant or hold a lease or licence; ...
(f) enter into any kind of contract or arrangement;
(g) exercise other powers conferred by regulation;
(h) exercise other powers that are necessary, expedient or incidental to the functions of the statutory corporation.
  1. Part 2 of the Act is entitled “The Minister”. Section 4 gives to the Minister similar powers to those conferred by section 21 upon a statutory corporation established under the Act. Section 5 addresses the functions of the Minister. Those functions include initiating, undertaking, supporting and promoting the development of land in the public interest and encouraging and facilitating public and private sector investment and participation in the development of the State.[8]
  2. Section 9 provides that a statutory corporation is subject to the control and direction of the Minister. Section 22 provides that a statutory corporation holds its property on behalf of the Crown.
  3. The Housing and Urban Development (Administrative Arrangements) (Urban Renewal Authority) Regulations 2012 (SA) (the Regulations) came into operation on 1 March 2012.[9]
  4. Regulation 4 establishes the Authority as a statutory corporation under the Act. Regulation 5 creates a board of management constituted of seven persons. Regulations 6 and 7 address the Authority’s functions and additional powers respectively.
  5. Regulation 6(1) relevantly provides:
6—Functions of URA
(1) The functions of URA are as follows:
(a) to initiate, undertake, support and promote the development of land and housing in the public interest, particularly for urban renewal purposes, including by—
(i) acquiring, assembling and using land and other assets in strategic locations, including in areas identified for urban renewal; and
(ii) promoting public support for urban renewal by working with the South Australian Housing Trust (SAHT), community groups and other bodies in the development of land and housing; and
(iii) undertaking preliminary works (including remediation of land) to prepare land for development and other functions such as planning and co-ordination for the purposes of such development;
(b) to encourage, facilitate and support public and private sector investment and participation in the development of the State, including by performing its functions to facilitate development that is attractive to potential investors;
(c) to acquire, hold, manage, lease and dispose of land, improvements and property, including land and housing formerly held under the South Australian Housing Trust Act 1995 transferred to the URA, particularly with a view to—
(i) reducing social disadvantage within the community through urban renewal, including the renewal of public housing by promoting, facilitating or undertaking—
(A) the creation of a mixture of public and private housing in particular locations; and
(B) an increase in the supply of affordable housing and community housing; and
(ii) managing projects involving the development of land and housing, including for urban renewal purposes (on its own behalf or on behalf of other agencies or instrumentalities of the Crown); and
(iii) managing the orderly development of areas through the management and release of land, including areas of undeveloped or under developed land, as appropriate; and
(iv) holding land and other property to be made available, as appropriate, for commercial, industrial, residential or other purposes;
...
(e) to give advice to the Government on issues related to housing and urban development in the State;
...
(l) to carry out its functions to support development that promotes growth in employment and the economy;
  1. Regulation 8 provides that sections 8 to 13 inclusive of the Public Corporations Act apply to the Authority. Because section 5 of the Public Corporations Act effectively leaves it to the Act and Regulations to apply specified provisions of the Public Corporations Act to statutory corporations established under the Act, the Act and the Public Corporations Act should be read in pari materia.
  2. The Authority is the successor to the Land Management Corporation. The Land Management Corporation was established on 24 December 1997 as a statutory corporation.[10] On 1 March 2012, the Land Management Corporation was dissolved and its assets and liabilities transferred to the Authority.[11] Those assets included the Land.

PART B: BACKGROUND

  1. The following matters up to and as at December 2013 are common ground on the pleadings or proved by the evidence.[12]

Parties

The plaintiffs

  1. The first plaintiff, Acquista Investments Pty Ltd (Acquista), is owned and controlled by the Borrelli family, which has been involved in the waste management industry in South Australia since 1962.
  2. The second plaintiff, Veolia Environmental Services (Aust) Pty Ltd (Veolia), is a subsidiary of Veolia Environment SA, a French publicly-listed company. Veolia is a substantial company with gross and net assets worth in the hundreds of millions of dollars as at 31 December 2013.[13]
  3. Since 2004, Acquista and Veolia have conducted a joint venture business trading as Integrated Waste Services (IWS). Veolia carries on business collecting waste and transporting it to IWS which has its principal place of business in the industrial suburb of Wingfield. IWS carries on business sorting, processing, transporting, recycling and disposing of waste and soil. Veolia is IWS’ largest customer and source of materials.
  4. Joseph Borrelli is the Chief Executive Officer of IWS and Paul Bowden is its General Manager.

The Authority

  1. The first defendant, the Authority, was established on 1 March 2012. The Authority operates under the name “RenewalSA”.
  2. The Land, which was then vested in the Land Management Corporation, became vested in the Authority by virtue of the Regulations. As at December 2013, the Authority owned 1,058 hectares[14] of land in greater Adelaide, of which the Land comprised 38 percent.[15]
  3. As noted above, the governing body of the Authority is a board normally constituted of seven persons (the Board). At all material times up to 2 December 2013, there were six members of the Board: the Honourable Bronwyn Pike (Presiding Member), Helen Fulcher, Craig Holden, Theo Maras AM, Dr Amanda Rischbeith and Mike Terlet AO. On 2 December 2013, Mr Maras and Mr Terlet resigned. On 17 and 18 December 2013, Ms Rischbeith and Mr Holden resigned.
  4. On 29 April 2012, the Authority adopted a Real Property Marketing and Pricing Policy (the Marketing & Pricing Policy). Its objective was to ensure that prices for all real property sales were properly benchmarked where appropriate and had a sound and consistent basis and that appropriate sales processes were undertaken. It included the following provisions:
6 POLICY DETAILS
6.1 Method of sale
As a general principle, and in order to achieve competitive neutrality, whenever practical to do so, a competitive sales process should be applied to sales of renewal SA’s real property assets.
Appropriate competition processes include:
...
6.4 Off-market transactions – valuation requirements
As a general rule, off-market transactions (ie. sale of Renewal SA real property which has not been offered to the open market) to the private sector must be supported by two independent valuations. The higher of the two valuations will apply as the minimum acceptable price, unless the Chief Executive determines otherwise.
...
6.5 Valuations
Normally, approval for a sale requires an up-to-date current market valuation (see definition below) to ensure that an adequate value is being received for the property being sold.
The Australian Property Institute’s definition of Market Value is “the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.” A current market valuation that is based on this definition is the appropriate form of valuation to support the sale of any real property assets.
It is preferable for the valuation to be less than six months old to ensure its currency, although in a highly volatile market it may be appropriate to have the valuation updated. If warranted by market conditions, an older valuation may be adopted at the discretion of the Chief Executive.
Criteria which will be considered by the Chief Executive in exercising the above discretion include:
  1. On 3 December 2012, Treasurer’s Instruction 8 was re-issued (Treasurer’s Instruction 8). It applies to dealings in which a public authority enters into a contract involving expenditure or potential expenditure and payments made by public authorities. It requires a “contract authorisation” in respect of contracts to which it applies and a “payment authorisation” in respect of payments. It requires prior approval before contracts to which it applies can be executed in accordance with the following table:
Purchase or Contract consideration
To be approved by
< $1,100,000
  • Cabinet, or
  • The Minister; or
  • The Chief Executive or governing authority, or
  • An employee nominated by a Chief Executive or governing authority; or
  • An employee nominated by an authorised employee pursuant to clause 8.11.2.
$1,100,000 to < $11,000,000
  • Cabinet, or
  • the Minister; or
  • an employee nominated by the Minister in writing by specific Ministerial delegation that specifies the employee, the amount and the nature of the contract including the parties.
$11,000,000 and over
Cabinet.

  1. On 26 August 2013, the Board approved and resolved that a member of the Board execute, and Bronwyn Pike executed, an instrument of delegation (the Instrument of Delegation) delegating functions in accordance with a Delegation and Authorisation Schedule (the Delegation Schedule) and Delegation and Authorisation Guidelines (the Delegation Guidelines).
  2. At all material times, Fred Hansen was the Chief Executive Officer of the Authority. There were several general managers and executive directors reporting to him. Michael Buchan was the General Manager of Major & Residential Project Delivery. He also acted as Chief Executive in the absence of Mr Hansen. Ian Hodgen was General Manager of Industrial Project Delivery and Jason Rollison was Director of Industrial Projects reporting to him. Daniel DeConno was General Manager of Asset Management and Aaron Brumby was Director of Asset Management reporting to him. Warren Smith was Executive Director of Corporate Affairs and Strategy. Warren Smith was also secretary to the Board with responsibility inter alia for communicating with board members, sending out board documents and keeping the minutes of meetings.
  3. On 25 March 2013, the Authority executed a power of attorney (the Power of Attorney) appointing 11 executive employees of the Authority, including Mr Hansen, as attorneys to execute deeds to which the Authority was a party.

The State

  1. The second defendant, the State of South Australia, is being sued pursuant to section 5 of the Crown Proceedings Act 1992 (SA)[16] for the acts of the Minister for Urban Development and the Minister for State Development. At material times, the Honourable Tom Koutsantonis MP was the Minister for Urban Development and the Honourable Jay Weatherill MP was the Minister for State Development.

Adelaide Capital Partners

  1. The third defendant, ACP, is a company incorporated in September 2012. Its shares are owned as to 50 percent by ResourceCo Holdings Pty Ltd and as to 50 percent by Gerlach Asset Development Pty Ltd. Its directors are Simon Brown and Andrew Watson (associated with ResourceCo) and Stephen and Andrew Gerlach (associated with Gerlach Asset Development).

Waste and soil management industries

Waste management industry

  1. The waste management industry in greater Adelaide involves the collection, transport, sorting, processing and recycling or disposal of waste. The waste is generated by household activities (Municipal Solid Waste), commercial and industrial activities (Commercial and Industrial Waste) and construction and demolition activities (Construction and Demolition Waste). The vast majority of Construction and Demolition Waste is generated and collected in bulk but a small minority is deposited into and collected in skip bins.
  2. There are three main operators in the waste management industry in greater Adelaide:
  3. Each of the three main operators operates its own waste processing facility at Wingfield. Waste is delivered to the facility at Wingfield, where it is sorted and processed. The waste is then delivered elsewhere for recycling or disposal, except in the case of ARR where recovered soil is disposed of on site.
  4. There are six major sites in South Australia used for the ultimate disposal of waste (waste depots). These waste depots are all outside the Adelaide metropolitan area and substantial transport costs are incurred to transport waste to them from the Adelaide metropolitan area. Those transport costs are higher than if the materials were transported to a location well within the Adelaide metropolitan area (such as Wingfield or Gillman). Third parties have waste depots at Inkerman (capacity about 25 million tonnes), Uleybury and McLaren Vale (each having a capacity of about 5 million tonnes).
  5. ResourceCo has waste depots at McLaren Vale and Hartley, each with a capacity of about 10 million tonnes of waste.
  6. IWS has a waste depot at Dublin, which has a capacity of about 80 million tonnes of waste. IWS disposes of waste at the Dublin waste depot. This involves IWS first excavating existing calcrete and overburden in cells, lining the cells and then depositing the waste. IWS currently deals with the excavated calcrete and clean soil by selling or stockpiling them.
  7. ARR does not have a waste depot of its own for the ultimate disposal of waste, but uses depots operated by others and in particular IWS’ Dublin site.

Soil management industry

  1. The soil management industry in greater Adelaide involves the collection, transport, processing and re-use as filling material or disposal of soil material (soil). One source of soil is excavation for the purposes of development and construction. Another source is the separation of soil from conglomerated Construction and Demolition Waste, which might contain a majority or minority of soil mixed with building materials.
  2. Since late 2009, soil has been classified into four categories:
  3. Regardless of its source, contaminated soil (high and low level) is required under the Environment Protection Act 1993 (SA) and the Environment Protection Regulations 2009 (SA) to be treated where necessary and disposed of at a licensed waste depot. A levy of $52 per tonne is payable to the Environment Protection Agency (the EPA) on disposal of high and low level contaminated soil.
  4. Waste fill is permitted to be disposed of as soil filling at sites requiring additional soil to increase the surface level of the site. No levy is payable to the EPA on such soil. Waste fill is defined in terms of mineralogical composition, particle size and thresholds for contamination by defined chemicals.[17] Soil material is usually required to be separated and/or processed to meet the criteria for waste fill. Waste fill might be derived from excavated soil or soil that has been separated from conglomerated Construction and Demolition Waste. Clean fill is uncontaminated soil that is excavated and meets the criteria for waste fill without separation or processing.
  5. Approximately 30 percent of soil material excavated or extracted is contaminated and required to be disposed of at a licensed waste depot. Approximately 70 percent of soil material excavated or extracted can, after processing, meet the criteria for waste fill and can be used for land filling purposes. For example, some of the soil material excavated for the recent re-development of Adelaide Oval and the development of the new Royal Adelaide Hospital has been classified as waste fill. Only a small proportion of total soil is clean fill.
  6. There are a limited number of residential, commercial or industrial developments in greater Adelaide seeking fill to build up land at any one time. Such developments generally charge between $8 and $12 per tonne to receive fill. Supply of fill greatly exceeds demand.
  7. There are three main operators in the soil management industry in greater Adelaide. They are also the three main operators in the waste management industry, namely ResourceCo, the IWS group and ARR. This is not coincidental because Construction and Demolition Waste is a major source of soil.
  8. The concept of waste fill being exempt from the EPA levy and the use of waste fill as filling on development sites or potential development sites is relatively recent, originating in late 2009. ResourceCo was the first to enter that market. ARR entered the market by 2012 and IWS in 2012.
  9. Adelaide City Council (the Council) formerly licensed a site at Gillman comprising 16 hectares (Lot 201) that it had been filling with waste fill.
  10. Mr Borrelli gave evidence that ResourceCo has approximately 50 to 60 percent of the soil management market, ARR has approximately 20 to 30 percent and IWS has approximately 20 percent.[18]

IWS business

  1. The soil component of IWS’ total waste and soil management business represents about 40 to 50 percent of its business. Of that soil component, clean fill and waste fill represent about 30 percent and contaminated fill represents about 70 percent.
  2. IWS operates a 12 hectare transfer station and recycling centre at Wingfield. IWS does not collect waste but receives it from customers, the largest of which is Veolia. Waste is received at IWS’ site at Wingfield, where it is sorted into components, processed where necessary, recyclable components are sold off-site or transported to Dublin and the residual waste is then transported to Dublin. IWS also receives soil that is transported directly to its Dublin site. The Wingfield site has the capacity to process approximately ½ million tonnes of waste per annum.
  3. IWS’ site at Dublin covers about 1,000 hectares and is located 55 kilometres from Wingfield. To date, 10 percent of the site has been excavated to create cells, giving rise to 3 million tonnes of excavated material. Much of the material remains stockpiled at Dublin in verge mounds and IWS has an interest in disposing of it to make room for the landfill operations. The site has a capacity to receive approximately 80 million tonnes of waste.
  4. IWS receives construction and demolition waste in skips at Wingfield which is sorted into waste and soil material. If the soil material meets the specification for waste fill, IWS disposes of it at Dublin without having to pay the EPA levy of $52 per tonne.
  5. IWS owns a fleet of five B-Double trucks, each with a 35 tonne pay load. These trucks, together with trucks operated by subcontractors, transport residual waste and recovered soil from Wingfield to Dublin and clean fill and waste fill from source to Dublin. On occasions, they transport calcrete and overburden from Dublin to purchasers or disposal points, but generally they return from Dublin to Adelaide empty.
  6. IWS charges a fee to customers to receive and dispose of waste and soil at its sites at Wingfield and Dublin. It also charges a fee for transport to the extent that it undertakes transport rather than its customer. The fee charged for receival and disposal of clean or waste fill is about $20 to $40 per tonne. The fee charged for transport of clean or waste fill from the central business district is about $8 per tonne to Wingfield and about $18 per tonne to Dublin.
  7. The cost to IWS of transport of clean and waste fill from Wingfield to Dublin is about $12 per tonne; whereas the cost of transport from Wingfield to Gillman would be about $2 per tonne, giving rise to a $10 differential transport cost.
  8. IWS has a strong commercial interest in gaining access to the Land to deposit clean and waste fill received from its customers and recovered as a result of its operations as well as excavated material from its Dublin site.

The Land

Description of the Land

  1. The Land comprises 407 hectares contained in seven allotments, namely:

Appendix 1 is a map showing the location of the Land and its constituent allotments.[21]

  1. The Land is situated in the suburbs of Gillman and Dry Creek and is 12 kilometres by road from the Adelaide GPO.[22] The Land lies generally north of the Port River Expressway; east of Wicker Road; south of the North Arm Creek; and west of the North Arm Creek and the freshwater Barker Wetlands (the Barker Wetlands).
  2. The Land is approximately triangular in shape. On its southern side, it is bounded by the Port River Expressway to the west, the freshwater Range Wetlands (the Range Wetlands) in the middle and the resource recovery operations at Wingfield to the east. On its western side, it is bounded by the freshwater Magazine Creek Wetlands (the Magazine Creek Wetlands) to the south, the Authority’s Incitec land[23] and EGT land[24] in the middle and Wicker Road/Grand Trunkway to the north. On its northern, north-eastern and eastern sides, it is bounded by the North Arm Creek and the Barker Wetlands.
  3. An earthen sea wall (the Seawall) has been constructed along the northern and north-eastern boundary of the Land to protect the Land from tidal inundation from the North Arm Creek. The Seawall is constructed on the Levee land.
  4. DRR lot 3 is broadly rectangular in shape, with its southern (long) side bounded by the Port River Expressway. Lot 203 is broadly rectangular in shape. It includes a significant bulge on its northerly (long) side towards Lot 5. Lots 201 and 202 intrude into the rectangle on its southerly (long) side towards its eastern end. Lot 5 is broadly triangular in shape. GT lot 3 is an irregular shape comprising land north of the EGT land and Incitec land together with a smaller area east of the Incitec land.
  5. A substantial portion of the Land (the Basins) is used by the Torrens Road Drainage Authority (TRDA) for the management of stormwater originating from the north-western suburbs over an area of 2,300 hectares that flows into the Basins and then discharges into the sea via the Dolphin Sanctuary.[25]
  6. The Land is low lying. It has acid sulphate soils containing 90,000 tonnes of sulphuric acid.[26] Parts contain remnant vegetation and habitat of high environmental significance.[27] To facilitate development of the Land for industrial purposes, it would need to be filled with millions of cubic metres of fill.[28] The Department of Environment, Water and Natural Resources is and for some years has been concerned that such development would have a negative environmental impact through the placement of millions of cubic metres of fill materials, acid sulphate soil conditions, the presence of remnant vegetation and habitat of high environmental significance and the present use of the land by the TRDA for the retention of stormwater. [29]
  7. The Land is located within the City of Port Adelaide Enfield Local Government Area.[30] Most of the Land is within the Multi Function Polis (MFP) zone.[31] Smaller parts are within the General Industry Zone, the Industry (Resource Recovery) and Coastal Management Zone and the MOSS [Metropolitan Open Space System] (Conservation) Zone. Appendix 2 is a map showing the zoning of the Land.[32]

History of the Land

  1. In the past, it was proposed that a Multi Function Polis be built in the vicinity of Gillman and Dry Creek including much of the Land. In the 1990s, land was zoned MFP accordingly.[33]
  2. At some point, the Council acquired a 50 percent beneficial interest in the southern portion, representing about two thirds, of the Land (Lot 500 and Lot 31 (collectively the Dean Rifle Range) and Lot 107).[34]
  3. At some point, the Land Management Corporation was formed[35] and land which included the Land was vested in the Land Management Corporation.
  4. Over the years, assessments undertaken as part of the Multi Function Polis proposal, the Commonwealth Natural Disasters and Risk Mitigation Program and in connection with the acquisition of the Council’s interest in part of the Land estimated that up to 200 hectares of the Land is required for stormwater management purposes.[36]
  5. In 2009, a Structure Plan was prepared for the Land Management Corporation (the Structure Plan).[37] The Structure Plan said that up to 200 hectares of the Land was required for stormwater management purposes.[38]
  6. As at February 2010, the Land formed part of a larger area of 471 hectares contained in seven allotments, namely:
  7. On 11 February 2010, the State compulsorily acquired Lot 500, Lot 31 and Lot 107 and thereafter they were vested in the Land Management Corporation free of the Council’s 50 percent interest.[39] The parties could not agree on its value and ultimately the Council instituted proceedings in the Land and Valuation Court to determine its value.[40]
  8. At some point, the 30-Year Plan for Greater Adelaide (the 30 Year Plan) was prepared. It identified that the Land is well located with respect to transport infrastructure (roads, rail and sea). It considered that the majority of the Land should be regarded as a “Key Industry Area” and the balance as “Metropolitan Open Space System” or “High Environmental Significance.” It identified the following action in relation to Gillman: “provide infrastructure, improve zoning and fill land to bring employment lands to market”.[41]
  9. In May 2010, Lot 31 was divided into Lot 201 (16 hectares), Lot 202 (16 hectares) and lot 203 (234 hectares) (Lot 203) in Deposited Plan 75338.
  10. In June 2010, Lot 500 was divided into lot 1 (5 hectares) lot 2 (3 hectares) and lot 3 (39 hectares) (DRR Lot 3).
  11. At some point, the Land Management Corporation agreed to sell 16 hectares (Lot 202) to the north of Lot 201 to a company associated with ResourceCo. Settlement of that sale took place in 2010.[42]
  12. In February 2012, Peter Southwick of Southwick Goodyear prepared a report for the Council valuing Lots 500, 31 and 107 as at February 2010 at $42 million, giving a compensation figure for the Council of $21 million plus $7.54 million for business value and $100,000 for disturbance and giving a total compensable value of the Council’s interest in that land of $28.64 million.
  13. On 1 March 2012, upon the creation of the Authority, the land identified at [81] above with the exception of Lot 202, comprising approximately 450 hectares, (the Gillman land) was vested in the Authority in lieu of the Land Management Corporation.
  14. At some point before ACP’s first proposal in June 2013, the Authority expected ultimately to develop 230 hectares of the Gillman land with a view to selling allotments of land that could be developed for industrial use.[43] This comprised 195 hectares within the Dean Rifle Range and 35 hectares within lot 3 in Deposited Plan 64288 developable in the longer term.[44] The Authority commenced preparation of a master plan (ultimately completed in November 2013) intended to form the basis of a subsequent Development Plan Amendment rezoning 230 hectares of the Gillman land for industrial use.[45]
  15. At some point, the Authority prepared projections of revenue and cost of sales in acting as master developer over 15 or 20 years.[46] These projections were based on the assumption that 195 hectares of the Dean Rifle Range would be developed for industrial purposes.[47] Projections of gross profit of tens of millions of dollars were incorporated in the Authority’s approved budget and ultimately summarised in the September and December Cabinet submissions.[48] These projections did not include holding costs or land tax payable by the Authority to the State.[49]
  16. At some point before ACP’s proposal in August 2013, the Authority decided to develop as an early stage of development of the Gillman land 15 hectares known as East Grand Trunkway (the EGT land) in the south-western corner of lot 3 in Deposited Plan 64288 for sale as industrial allotments.[50]
  17. At some point before ACP’s proposal in August 2013, the Authority decided to develop as an early stage of the development of the Gillman land 17 hectares known as the Hansen Road Extension (the HRE land) on the southern boundary of Lot 203 immediately west of Lots 201 and 202 for sale as industrial allotments.[51]
  18. In August 2013, Robert Taylor of Savills prepared a report for the Authority valuing Lots 500, 31 and 107 as at February 2010 at $13.3 million, giving a compensation figure for the Council of $6.65 million plus $50,000 for disturbance and giving a total compensable value of the Council’s interest in that land of $6.7 million.
  19. At some point before the September Cabinet submission, the Authority agreed a heads of agreement to transfer an allotment to an intending purchaser (Lot 201 to ARR).[52]
  20. At some point before the September Cabinet submission, the Department of Environment, Water and Natural Resources indicated that it would only support development of the Gillman land if 200 hectares were retained for stormwater and environmental purposes in accordance with the Structure Plan.
  21. On 18 November 2013, the draft Gillman Masterplan Report in relation to the Gillman land was released by the Authority for public consultation (the Masterplan Report).[53]
  22. The Masterplan Report included a proposal for the development of the Gillman land. The proposed development involved 207 hectares being developed in four stages for industrial purposes, which comprised the Dean Rifle Range (168 hectares) and Lot 3 in Deposited Plan 64288 (39 hectares including the Incitec land). It also proposed the development of 29 hectares of the Dean Rifle Range for expansion of the Resource Recovery Precinct. In total it showed development of 226 hectares of the Land (excluding the 10 hectares of Incitec land). This assumed that the land would be rezoned from MFP zone to General Industry zone. The balance of the Land, being approximately 181 hectares, would be used for stormwater management and the seawall.
  23. It is apparent that any development of the Land for industrial purposes would be subject to constraints. Those constraints include the need to address and accommodate the use of part of the Land for stormwater purposes; environmental issues including managing the acid sulphate soils and the present environmental significance of the Land; the need to fill the Land extensively; the need to rezone those portions of the Land to be used for industrial purposes; and the need to obtain development approval to fill the Land and develop it for industrial purposes.
  24. At some point before the December Cabinet submission, the Authority projected that it would transfer to Incitec Pivot Limited (Incitec) 11 hectares (the Incitec land) in the south-western corner of lot 3 in Deposited Plan 64288, being land immediately to the east of the EGT land.[54]

Expressions of interest by soil management operators

Approach by IWS

  1. On 6 March 2013, Mr Borrelli together with IWS’ General Manager Paul Bowden met with Ian Hodgen, Jason Rollison and Michael Terlet of the Authority. There was discussion about soil from IWS being used as fill material on the Gillman land. There was discussion about the Authority seeking rezoning of the land to industry and seeking development approval for development of the land. There was discussion about some form of arrangement between IWS and the Authority. Mr Borrelli gave to Mr Rollison a document entitled Gillman/New Port Keys Remediation & Development Action Plan Joint Venture Proposal (the IWS March Proposal), which Mr Rollison skimmed and handed back to Mr Borrelli at the end of the meeting.
  2. Mr Borrelli and Mr Rollison gave evidence about the discussion. There were divergences between their evidence that I address below.

Approach by ARR

  1. On 2 April 2013, ARR wrote to the Authority expressing interest in acquiring the whole of the 311 hectares comprising the Dean Rifle Range.

Approach by ACP

  1. On 18 June 2013, ACP wrote to the Premier, the Honourable Jay Weatherill MP. The letter proposed the acquisition of the Gillman land (450 hectares) for up to $135 million to be paid in three instalments of $45 million in each of the 2014, 2018 and 2022 financial years, equating to $30 per square metre. The letter sought an exclusive development option over the land for six months to enable international investors to decide whether they wished to purchase the land. It was proposed that land suitable for industrial development be filled, with ACP providing 2 million tonnes per year of fill material. The site would be developed as an industrial estate known as the Lipson Industrial Estate.[55]
  2. Between 6 and 26 August 2013, several meetings took place between representatives of ACP and staff of the Authority to discuss the proposal.

ACP’s August proposal

The proposal

  1. On 29 August 2013, the solicitors for ACP wrote to the Honourable Jay Weatherill MP making a more formal proposal (ACP’s August Proposal).[56] The proposal was for the grant to ACP of an option to purchase 418 hectares of the Gillman land for $30 per square metre of usable land. The proposal included as attachments:
  2. The explanation of the site described it as having been:
identified as arguably the most strategically positioned industrial land development opportunity in the Australian market.
  1. The explanation of corporate structure and explanatory memorandum made it clear that under the proposal ACP would not be the purchaser or developer, but that this would be a development company yet to be incorporated in which equity was to be held principally by external investors and to a small extent by ACP. The explanatory memorandum included:
If the option is exercised, ACP may nominate another purchaser. This is consistent with the corporate structure proposed by ACP to potential investors, namely a separately incorporated land development company for which ACP will act as project manager.
  1. The explanation of corporate structure included:
It is proposed that the Lipson Estate industrial development will be undertaken by an Australian domiciled development company and ACP shall act as Project Managers via an existing management company.
It is proposed that the investor will fund the capital costs of the project on a stage by stage basis.
It is also proposed that ACP will invest directly into the development company via funding an agreed percentage of the peak equity value required. ACP will be paid an annual management fee to deliver the project on behalf of the investor and development company.
The development company will establish a separate Board of Directors (“Lipson Development Board or LBD”) comprising representatives from both the investor group and ACP. The LBD shall have responsibility for all strategic and investment decision for the project.
...
ACP shall work with the LBD in providing traditional project management services including funding advice and execution and key relationship coordination with the South Australian State Government.
...
The development functions, including filling and a remediation, placement and delivery will be undertaken via formal contracts between the development company and project partner ResourceCo.
  1. The explanation of ACP stated that it was a joint venture between Gerlach Asset Development and ResourceCo. It described ACP as an independent Australian property development and land remediation company but did not suggest that ACP had previously engaged in any projects.
  2. The explanation of project partners said that ResourceCo was currently processing in excess of 2 million tonnes per annum of discarded materials with access to the required fill volumes to ensure the successful infill of the Lipson Industrial Estate. It included the following reference to Lot 202:
In 2010, ResourceCo purchased a 16 ha site immediately to the north of the Lipson Industrial Estate development. This undeveloped parcel of land had the same topography and development requirements as to the proposed Lipson Industrial Estate project. This land was reclaimed and developed with fill materials sourced and supplied by ResourceCo.
ResourceCo sourced and placed nearly one million tonnes of fill material onto the site and developed the land into a completed industrial facility for use as a multipurpose recycling precinct.
  1. The August draft deed granted an option to ACP for six months to purchase the 418 hectares. It was a condition precedent to exercise of the option that ACP develop a Project Plan identifying inter alia all regulatory approvals required to be satisfied to implement the project and how and when they were expected to be obtained. ACP also had to demonstrate it was likely to secure the financial capacity to commence the project and it had the capacity to execute it in accordance with the Project Plan. Upon execution of the option, the Authority and ACP were deemed to have entered into a land sale contract on defined terms. Those defined terms included a purchase price of $30 per square metre of “usable land” and settlement being subject to at least 230 hectares being rezoned “General Industry” and the purchaser being satisfied that all regulatory approvals had been obtained.

The September Cabinet submission

  1. On 13 September 2013, the Chief Executive, Mr Hansen, sent a Minute to the Minister for Urban Development attaching a draft Cabinet submission prepared by Mr Rollison (in consultation with Mr Hodgen and Mr Buchan) and approved by Mr Hansen. These documents were not tendered. The Board had no involvement at that stage.
  2. On 23 September, the Premier and the Minister for Urban Development presented a submission to Cabinet (the September Cabinet submission). The submission attached ACP’s August Proposal and most of its attachments. The Synopsis stated that a number of the key elements and implications of the ACP proposal required further consideration and clarification before it could be fully assessed. The first was:
The proposal does not provide an opportunity for market testing demand or pricing for the land, either in a single holding (as ACP proposes) or developed into individual allotments or superlots.
  1. The September Cabinet submission said that up to 200 hectares of the land the subject of the ACP proposal had previously been identified as being required for stormwater management purposes and not supporting industrial development. It said that the Authority’s proposal to develop the Land itself was confined to an undefined portion of the land still retained by the Authority in which the Council formerly had a 50 percent interest (267 hectares).[57] It identified that the ACP proposal provided that ACP would pay $30 per square metre for “usable land” being “land capable of being developed for industrial purposes” and that this might result in ACP not paying for 200 hectares of the land.[58] The submission included two tables comparing the financial impacts of accepting the ACP proposal compared to the Authority itself acting as master developer of part of the Dean Rifle Range. Table 3 was premised on ACP paying $30 per square metre for all 418 hectares and showed a net positive financial impact to the Authority.[59] Table 4 was premised on ACP paying for 217 hectares and the third instalment of $22 million not being paid and showed a net negative financial impact to the Authority.[60]
  2. The September Cabinet submission recommended that the ACP proposal in its current form be rejected but that the Authority enter into negotiations with ACP to seek in principle agreement incorporating 10 variations to ACP’s August Proposal. It recommended that Cabinet approve, subject to the Authority’s assessment confirming the suitability of a revised proposal against the 10 variations, the Authority entering into a binding agreement to sell up to 418 hectares of the Authority’s land at Gillman/Dry Creek to ACP or its nominee.[61]
  3. Cabinet resolved in terms of the recommendation, except that the approval was subject to the Authority’s assessment confirming the suitability of a revised proposal against the 10 variations and a further submission being brought to Cabinet to authorise the Authority to enter into a binding agreement to sell up to 418 hectares of the Authority’s land at Gillman/Dry Creek to ACP or its nominee.
  4. On 2 October 2013, representatives of the Authority met with representatives of ACP and informed them of the 10 variations the subject of the Cabinet resolution.[62]

The Draft Contract

  1. The Authority engaged Kyffin Thompson of BDO to advise on probity issues in connection with forthcoming negotiations between the Authority and ACP. A negotiation and evaluation plan was prepared by Ms Thompson to evaluate the outcome of negotiations with ACP against criteria defined by reference to the 10 variations the subject of the Cabinet resolution.[63]
  2. Between 29 October and 13 November, meetings were held between representatives of the Authority and representatives of ACP to negotiate variations to the terms of the August draft deed. On 13 November, version 7.1 of the draft deed was produced (the Draft Contract).
  3. The Draft Contract granted three successive options to ACP to purchase defined components of the Land.[64] It was a condition precedent that by 30 June 2014 ACP develop a Project Plan identifying the land the subject of each stage of the project in a manner substantially consistent with the indicative stages described in the Concept Plan.[65] The Project Plan was to identify all regulatory approvals required to be satisfied to implement the project and how and when they were expected to be obtained.[66] It was a condition precedent that ACP demonstrate that it was likely to secure the financial capacity to commence the project and had the capacity to execute it in accordance with the Project Plan and the Draft Contract.[67]
  4. The Draft Contract contained as Annexure F a Concept Plan, which said that the development process was to be implemented in three distinct four year stages, with 20 to 40 hectares per annum being filled and developed progressively. It was envisaged that stage 1 would commence in the south-eastern portion of the site and the staging would be rolled out in a logical manner to the north. The Concept Plan attached to the December Cabinet submission (the Draft Concept Plan) contained a drawing showing the location of each of stages 1, 2 and 3. Stage 1 was the largest area encompassing over 40 percent of the total (subtracting Lots 201 and 202 out of the area shown as stage 1). Stage 2 was shown as being to the north west of Stage 1 and substantially smaller than stage 1. Stage 3 was shown as being to the north west of Stage 2 and slightly smaller again.
  5. The Draft Contract provided that the Stage 1 Option was required to be exercised by 31 December 2014, unless extended by agreement or by a force majeure or other Suspending Event, and otherwise the Draft Contract would be deemed to come to an end.[68] It was required to be exercised in respect of land not less than 150 hectares separately identified in the Project Plan as the land the subject of Stage 1 (the Stage 1 Option Land).[69] In turn, the Project Plan was required to identify the land the subject of Stage 1 in a manner substantially consistent with the indicative stage 1 described in the Concept Plan.[70] Exercise of the Stage 1 Option was subject to satisfaction of the conditions precedent.[71] Upon exercise, the Authority and ACP were deemed to have entered into and duly executed a Land Sale Contract on terms defined in the Draft Contract.[72] Those terms included that the purchase price was calculated at $30 per square metre (not including GST). They also included that settlement of the sale was subject to at least 230 hectares of the total land being rezoned “General Industry”, the purchaser being satisfied that all regulatory approvals required for Stage 1 had been obtained and deposit of a Plan of Division dividing the Stage 1 land from the balance of the land (the Settlement Conditions).[73]
  6. The exercise of the Stage 1 Option was subject to the potential exclusion of up to an aggregate total of 15 hectares if they satisfied defined criteria for a Project of State Significance (PoSS), could operate within the parameters of the Project Plan and ACP did not reasonably refuse to accommodate it within the project in a manner consistent with the Project Plan and on commercial terms to be negotiated.[74] The PoSS Criteria included that the land had been classified by Cabinet as a Project of State Significance or assessed by the Department for Manufacturing, Innovation, Trade, Resources and Energy (DMITRE) as a major project having regard to eight defined criteria.[75]
  7. Upon settlement of the purchase of the Stage 1 Option Land, the Authority granted to ACP a licence on the terms set out in Annexure G (the Long Term Licence).[76] There was no Annexure G attached to the Draft Contract.
  8. The Stage 2 Option was required to be exercised within five years after the Stage 1 settlement date, unless extended by agreement or a force majeure or other Suspending Event.[77] The Stage 2 Option was required to be exercised in respect of the land, or part of the land, separately identifiable in the Project Plan as the land the subject of Stage 2 (the Stage 2 Option Land).[78] In turn, the Project Plan was required to identify the land the subject of Stage 2 in a manner substantially consistent with the indicative stage 2 described in the Concept Plan.[79] ACP could partially exercise on multiple occasions the Stage 2 Option in respect of separate parts of the Stage 2 Option Land, provided it identified the end user and timeframe for use of that part on each occasion.[80] Settlement was subject to the Settlement Conditions.
  9. The Stage 3 Option was required to be exercised within nine years after the Stage 1 settlement date, unless extended by agreement or a force majeure or other Suspending Event. [81] The Stage 3 Option could be exercised even if the Stage 2 Option was not or was only partially exercised. The Stage 3 Option was required to be exercised in respect of the land, or part of the land, separately identifiable in the Project Plan as the land the subject of Stage 3 (the Stage 3 Option Land).[82] In turn, the Project Plan was required to identify the land the subject of Stage 3 in a manner substantially consistent with the indicative stage 3 described in the Concept Plan.[83] ACP could also partially exercise on multiple occasions the Stage 3 Option in respect of separate parts of the Stage 3 Option Land, provided it identified the end user and timeframe for use of that part on each occasion.[84] Settlement was subject to the Settlement Conditions.
  10. The exercise of the Second and Third Options was subject to the potential exclusion of up to an aggregate total of 15 hectares in each case for Projects of State Significance on terms similar to those in respect of the First Option.
  11. ACP agreed to develop land acquired in a manner likely to substantially achieve the Project Objectives and consistently with the Project Plan at its own cost.[85]
  12. The parties to the Draft Contract were the Authority, ACP and the Minister for State Development. The Draft Contract created rights and obligations as between the Authority and ACP. It was the Authority which granted the Options and the Authority which agreed to sell portions of the Land upon exercise of the Options.
  13. The only obligation undertaken by the Minister for State Development was that, upon receipt of a request by ACP for assistance to promote the project to potential investors or users, the Minister was to form an opinion whether such promotion was appropriate to the activities of government and, if so, provide that assistance.[86] The only other substantive provision involving the Minister was an entitlement of the Minister to give to ACP a PoSS Notice, which deemed the project named in the notice to be a Project of State Significance on a prima facie basis.[87]

Board consideration

  1. On 10 November 2013, Mr Buchan sent an email to board members saying that the Authority had been negotiating with ACP over the last two weeks at the request of Cabinet and it was likely that ACP’s proposal would be rushed into Cabinet on 18 November. Mr Buchan was acting Chief Executive up to 24 November.
  2. On 18 November 2013, the Masterplan Report was released by the Authority for public submissions by 6 December.[88]

The first Board Paper

  1. On 13 November, Mr Smith sent an email to Board members attaching an Out of Session Decision Paper authored by Mr Rollison and authorised by Mr Buchan (the first Board Paper). The paper sought a response of approve/not approve by 15 November at 12 noon. The paper contained four sections: Purpose, Background, Discussion and Recommendation.
  2. Within the Discussion section, the Board was asked to approve the Authority seeking Cabinet approval to the Authority granting to ACP an exclusive call option over the Land; the off-market sale of 150 hectares for $45 million under the Stage 1 Option and of up to 257 hectares for up to $77.1 million under the Stage 2 and 3 Options; and the grant of a long term licence over the balance of the Land after the Stage 1 Option had been exercised.
  3. The Recommendation section at the end of the paper read as follows:
It is recommended that the Board of Management approves:
  1. This proposed resolution necessarily incorporated approval by the Board to seeking Cabinet approval for the transactions identified in the Discussion section summarised at [134] above.
  2. Several board members sent emails that afternoon expressing concern about the proposal, probity and process challenge risks to the Board and the Authority and the short time frame for a response.
  3. On that evening, Mr Buchan sent an email to board members responding to their concerns under the headings Process and Probity, Dean Rifle Range and Timelines. Under the first heading, he said that, before the negotiations between the Authority and ACP commenced, Kyffin Thompson from BDO had made specific recommendations about how the negotiations should be documented and run. With regard to the Authority’s policy for an off-market transaction requiring two independent valuations, he said that the two independent valuations obtained in connection with the compulsory acquisition of the Council’s interest had been used to benchmark the value of the ACP proposal (which was higher than the higher of the independent valuations).
  4. On 14 November 2013, two board members sent emails saying that they did not support the proposal (and a third board member did so the following day).[89] Mr Smith sent an email on that morning to board members attaching ACP’s August 2013 proposal which included the August draft deed. The board members were not shown the November Draft Contract at any point. That afternoon, a teleconference was held between four board members, Mr Buchan and Mr Smith at which additional information was sought by board members, particularly as to detailed financial analysis of and risks associated with the proposal.[90]

The second Board Paper

  1. On the afternoon of 14 November 2013, Mr Buchan withdrew the first Board Paper to enable amendments to be made. On that evening, he sent an email to board members (excluding Mr Terlet who had advised of a potential conflict of interest) attaching an Out of Session Noting Paper authorised by him (the second Board Paper). The paper sought a response of either recommendation noted or an email response to Warren Smith by 15 November at 12 noon. The Background and Discussion sections were largely identical to those in the first paper, except that the body of Mr Buchan’s email sent the previous evening was incorporated towards the end of the Discussion section. It contained a new appendix being a financial analysis of the ACP proposal.
  2. The Recommendation section was substantially changed. It now read:
It is recommended that the Board of Management notes:
  1. While the Discussion section still contained the same recommendation that approval be granted by the Board for the Authority to seek Cabinet approval for the transactions as summarised at [134] above, it is evident that this was an oversight in the re-casting of the paper and was inconsistent with the recommendation at the end of the paper.
  2. On 15 November, the second Board Paper was withdrawn. On that evening, Mr Buchan provided to the Minister for Urban Development a draft Cabinet submission. The draft submission was not tendered. He informed the Chiefs of Staff of each of the Premier and Minister for Urban Development of the Board’s significant reservations.
  3. On 17 November, Mr Buchan sent an email to board members expressing his appreciation for their feedback on the difficult topic and process and saying that he did not know whether the proposal would be presented for Cabinet’s consideration the next day.

Approaches by IWS and E & A Ltd

  1. On 14 November, Mr Bowden on behalf of IWS sent an email to Mr Rollison and Mr Hodgen following up in regard to the meeting on 6 March 2013 regarding potential options for the Gillman Industrial Precinct and IWS working in partnership with the Authority in the filling and development of the land. The email attached a copy of the IWS March Proposal.
  2. On 15 November, Mr Borrelli sent emails to the electorate offices of the Honourable Mr Weatherill MP and the Honourable Mr Koutsantonis MP attaching identical letters to both Ministers. The letters referred to IWS’ meeting with the Authority earlier in the year concerning a proposed joint venture, including the supply of fill material and earthworks and a resulting share in the sale of the land once developed. The letters attached a copy of the IWS March Proposal.
  3. On 15 November, Stephen Young on behalf of E & A Ltd wrote to the Honourable Mr Koutsantonis MP saying that it had been advised that a significant portion of land was likely to be made available to property developers to establish an oil and gas services precinct at Gillman. The letter requested that, if land was available for sale, E & A Ltd be afforded an opportunity to buy all or part of it directly from the government rather than from developers at a higher price. E & A Ltd is a publicly listed company with total assets exceeding $140 million and net assets exceeding $60 million as at 30 June 2013. It has several operating segments including heavy engineering, water and fluid solutions and maintenance and plant construction.

Board consideration

The third Board Paper

  1. On 20 November, Mr Smith sent an email to Board members (excluding Mr Terlet) attaching a revised Out Of Session Decision Paper (the third Board Paper). The paper sought a response of recommendations approved/not approved by 21 November at 5 pm. The Background and Discussion sections were largely identical to the second paper, except that the recommendation within the Discussion section of approval by the Board to seeking Cabinet approval for the transactions summarised at [134] above was amended to merely note that the Cabinet approvals to that effect would be required if approval to proceed were given.
  2. The Recommendation section of the paper was substantially changed. It recommended that ACP’s proposal be rejected. It now read:
    1. The Board of Management recommends to the Minister for Housing and Urban Development that:
      • The South Australian government reject the Adelaide Capital Partners (ACP) submission to government to purchase 407 hectares of Renewal SA-owned land at Gillman/Dry Creek for future industrial development; and
      • The South Australian Government offer the Gillman/Dry Creek land to the market for sale in a transparent and open manner.
2. The Board of Managements notes:
3. The Board of Management notes:
  1. Four board members (a majority of the Board) sent emails supporting the recommendation, which comprised a Board resolution under clause 3.4.3 of the Authority’s Board of Management Policy.
  2. On about 21 November, Mr Buchan sent to the Minister of Urban Development a minute advising of the Board’s rejection of ACP’s proposal and of the Board’s resolution as set out at [149] above together with a draft Cabinet submission. These documents were not tendered. Mr Buchan also informed the Chiefs of Staff to the Premier and the Minister for Urban Development of the Board’s resolution.
  3. On 25 November, the regular monthly board meeting took place. Mr Hansen returned that day and attended the meeting. The resolution made by the Board in response to the third Board Paper was noted. The Minister for Urban Development then joined the meeting. The Minister requested that the Board further consider the matter and provide advice to him to enable Cabinet to determine its response to the ACP offer. After the Minister left the meeting, it was reported to the Board by the executive staff that DMITRE supported the proposed off-market transaction to enable a significant mining services hub to be established at Gillman. There was discussion on the potential for the Land to be placed on the market and whether there would be interest from other entities or consortia that could provide a strategic mining services hub focus. There was discussion on probity issues related to an off-market transaction and on the potential reputational risks accruing to the Authority should an off-market sale proceed. There was discussion about potential implications for the Council’s compensation claim. There was discussion regarding previous industry interest in purchasing the Land. It was reported by the executive staff that there had been little interest in broad hectare purchase unless government funded the infrastructure and what limited interest had been expressed had been from industries such as the resource recovery industry for smaller land portions. There was discussion concerning the Masterplan report and the closing date for consultation being 9 December. Board members requested that they be provided with an out of session decision paper providing options to enable the Board to advise the Minister on a preferred option for Cabinet to consider in relation to sale of the Land.

The fourth Board Paper

  1. On 28 November, Mr Smith sent an email to board members (excluding Mr Terlet) attaching an Out Of Session Decision Paper (the fourth Board Paper). The Background section was essentially the same as in the previous papers except that the reference to the Cabinet approvals required if the proposed transaction were to proceed was transposed from the Discussion section into the Background section. The other sections were essentially new.
  2. The Discussion section commenced as follows:
The Minister has requested advice on a number of key issues before he can recommend to Cabinet a response to the ACP proposal. Some key elements of this advice need to be provided by Renewal SA and other key elements are to be provided by other government agencies, including the Department for Manufacturing, Innovation, Technology, Resources and Energy (DMITRE). The key issues as:
  1. Is the land at Gillman/Dry Creek an appropriate location for a resources sector service hub to support the expansion of the oil and gas industry?
  2. Does the ACP offer for the land at Gillman/Dry Creek represent a good value offer based on independent valuations and existing market evidence?
  1. Has Renewal SA managed the consideration of ACP’s unsolicited offer in accordance with appropriate policies and procedures relating to probity?
  1. Is the ACP proposal to develop a resources sector services hub to support the expansion of the oil and gas industry credible; does it meet with Government strategic economic development objectives; and does it give Government sufficient confidence to proceed with accepting the offer on a preferred basis?
The Board of Management can provide advice in relation to questions (a), (b) and (c), with other Government agencies, such as DMITRE and the Economic Development Board, responsible for providing advice in relation to question (d).
  1. Under the heading of question (b), reference was made to the large discrepancy between the opinions of the two valuers engaged by the Authority and the Council. It was said that extrapolation of their valuations to a larger area would result in a value of $19 million and $59 million respectively in relation to the Land. Reference was made to three specific transactions involving the sale of parcels exceeding 50 hectares in greater Adelaide. It was reported that a number of unsolicited enquiries had been received by the government for portions of the Land, which generally related to land fill operations whereby the land would be held for fill disposal until it could be developed for other industrial/commercial use. It was reported that, in the view of those parties, the Land held a low value being much lower than that proposed by ACP. It concluded:
Based on analysis of the valuation advice received over an extended period of time for the land, the ACP offer does represent a good value offer for the land.
  1. Under the heading of question (c), reference was made to the Pricing & Marketing Policy and in particular to an approach from a private sector party (off-market). It was said that the Policy required two independent valuations to be undertaken and in this respect guidance had been taken from the extensive valuation work completed for the compulsory acquisition of the Council’s interest. Reference was made to Ms Thompson’s recommendations about how the negotiation should be documented and managed.
  2. Under the heading Recommendations, the following appeared:
It is recommended that the Board of Management approves:
1. That advice be provided to the Minister for Housing and Urban Development that:
  1. Renewal SA’s landholding at Gillman/Dry Creek, that is the subject of the Adelaide Capital Partners (ACP) unsolicited offer to purchase, has been identified as land appropriate for industrial/commercial development to support employment and growth targets contained in the The 30-Year Plan for Greater Adelaide and as such a resources sector services hub is an appropriate use of the land;
  2. The ACP offer of $45 million (GST exclusive) as their first exercisable option for 150 hectares of land at Gillman/Dry Creek and $77 million (GST exclusive) for their second and third exercisable options for 257 hectares of adjacent land represents a good value offer based upon independent valuation advice and comparable market evidence;
  1. Renewal SA’s consideration of ACP’s unsolicited offer has been managed within existing policy relating to off-market transactions and has been guided by independent probity advice.
It is recommended that the Board of Management notes:
  1. That advice pertaining to whether the ACP proposal meets with the Government’s strategic economic development objectives and gives Government sufficient confidence to proceed with accepting the offer on a preferred basis will be provided by other Government agencies, and ultimately this will be a policy decision of Cabinet.
  2. Four board members sent emails supporting the recommendation, which comprised a Board resolution under clause 3.4.3 of the Authority’s Board of Management Policy.[91]
  3. On 29 November, Mr Hansen sent a Minute to the Minister for Urban Development setting out the resolution made by the Board on that day. The Minute attached a draft Cabinet submission.

The December Cabinet submission

  1. On 29 November 2013, the Department of Treasury and Finance sent a minute to the Treasurer (who was also the Premier and Minister for State Development) urging rejection of the ACP proposal in favour of an open marketing and sales process.
  2. On 2 December 2013, the Premier and the Minister for Urban Development signed a Cabinet submission (the December Cabinet submission). It contained a limited number of changes to the draft provided by Mr Hansen. It attached as Appendix C the Draft Contract including annexures A[92] to F[93]. The Synopsis summarised Cabinet’s September consideration of the ACP proposal, said that the Authority had now concluded negotiations with ACP resulting in various changes and concluded by saying:
The revised ACP proposal has been considered by the Urban Renewal Authority Board of Management, which resolved to advise Government that the ACP offer (which values the land at $30/m²) represented a good value offer, based upon independent valuation advice and comparable market evidence.
  1. The Cabinet submission said that, in addition to concerns raised regarding the off-market nature of the initial ACP proposal, it had been considered in September to have a number of shortcomings that were identified under 10 dot points.[94] The submission listed each of the 10 dot points, identifying the underlying issue and the outcome of the negotiations.
  2. The submission then contained the following paragraphs:
In relation to the risks identified above, and negotiated with ACP, there continues to be a risk that the proposal has not been subjected to an open and transparent market process. This matter has been discussed by Urban Renewal Authority Board of Management. The Board noted current Renewal SA policies contemplate potential off-market transactions in cases where a “strong justification” exists, however the Board acknowledged that Renewal SA does not have the expertise in the oil and gas sector required to inform Government about whether there is sufficient merit in the ACP proposal to warrant an off-market transaction.
Based on the significant financial modelling undertaken as part of the DRR compulsory acquisition process, the Board was satisfied that the ACP offer (which values the land at $30/m²) represented a good value offer, based upon independent valuation advice and comparable market evidence.
The Board also considered the issue of probity in accepting an unsolicited offer for the subject land and the potential for industry/community dissatisfaction with the sale of the subject land through a non-competitive process. In relation to probity matters, the Board received a Probity Services Letter from BDO which concluded that “the Lipson Estate procurement process involved a fair, impartial and unbiased process conducted in the public interest without any known conflict of interest”.
Despite the robust internal processes adopted by Renewal SA in its dealings with ACP, the concern regarding probity is reinforced by the recent receipt of letters from industry to the Minister for Transport and Infrastructure expressing an interest in the Government’s intentions, based on hearsay, of the potential sale of the land.
  1. The Cabinet submission contained an analysis of the project financial impacts on a “reasonable best case” and “potential worst case”. It attached a Minute from Treasury and Finance (the Treasury Minute) addressing those costings. The Treasury Minute referred to two options, being to reject the ACP offer and instead offer the Land to the market for sale in a transparent and open manner; or approve ACP’s unsolicited proposal. The Minute said that the first option was consistent with the resolution of the Board and addressed risks identified by the Board, being inter alia lack of market testing to determine the competitively derived market value of the Land, the probity of accepting an unsolicited offer for the Land and dissatisfaction with the Authority facilitating the sale through a non-competitive process.
  2. The Cabinet submission concluded with recommendations that inter alia Cabinet:
    1. Approve the Adelaide Capital Partners offer as documented in the 13 November 2013 (version 7.1) draft of the Deed (attached as Appendix C), including the project objectives (Appendix A) and the concept plan (Appendix B).
    2. Approve Renewal SA granting Adelaide Capital Partners and exclusive call option (or series of call options) for Adelaide Capital Partners and/or nominee to acquire up to 407 hectares of future industrial land within three tranches over a nine-year period.
    3. Approve the off market sale of approximately 150 hectares of land forming portion of Allotment 203 in Deposited Plan 75338 (or adjacent) at Dry Creek to Adelaide Capital Partners (and/or nominee) for $45 million (GST exclusive), relating to the first exercisable option if ACP exercises this option....
    4. Approve Renewal SA entering into a Long Term Licence with Adelaide Capital Partners for up to 257 hectares of land adjacent to the land described in Recommendation 3 for uses that facilitate Adelaide Capital Partners developing the land which it acquires in a manner that is consistent with its Project Plan....
    5. Approve the off-market sale of up to 257 hectares of land at Gillman/Dry Creek to Adelaide Capital Partners (and/or nominee) for up to $77.100 million (GST exclusive) relating to the second and third exercisable options if Adelaide Capital Partners exercises these options.
  1. On 2 December, Cabinet approved the December Cabinet submission. On 3 December, the Minister for Urban Development’s liaison officer sent an email to the Authority saying that the December Cabinet submission had been approved in the Cabinet meeting.
  2. On 9 December, the regular monthly meeting of the Board took place. The resolution made by the Board in response to the fourth Board Paper was noted. There was discussion about Cabinet’s deliberations, the timing of any announcement and other aspects of the matter.

The Contract

  1. On 11 December, the Contract was executed by Mr Hansen on behalf of the Authority. On 11 or 12 December, it was executed by the Minister for State Development and on 13 December by ACP. It was dated 13 December 2013.
  2. The terms of the Contract differed in several respects from the terms of the Draft Contract provided to Cabinet on 2 December 2013. One significant difference was between the drawings attached to Annexure F - the Concept Plan - attached to the Draft Contract and Contract. The drawing[95] attached to the Draft Contract showed a much larger Stage 1 area with a different shape compared to the drawing[96] attached to the Contract. The shapes and layouts of stages 2 and 3 also differed, although their overall size was largely the same. Another significant difference was that the Draft Contract did not contain any terms of the Long Term Licence. The Contract contained as annexure G detailed provisions of the Long Term licence.
  3. There were various other, less significant, differences between the Draft Contract and the Contract. These included the provisions relating to re-definition of the Land,[97] Projects of State Significance,[98] relocation of the drain,[99] exercise of options,[100] notices to remedy,[101] the Project Objectives[102] and the Speedboat Club licence.[103]

PART C: THE TRIAL
Documentary evidence

  1. Four volumes of tender documents were tendered by the plaintiffs. The defendants objected to many of the documents on the ground of relevance but I admitted each of those documents. This reserved to the defendants the right to contend that a particular document could not be used for a particular purpose, a matter addressed below. The September draft and final December Cabinet Submissions were tendered and received in closed court for confidentiality reasons, as were unredacted versions of other documents in respect of which redacted versions were tendered and received in open court. Several individual documents were also tendered by the plaintiffs (including most of the documents exhibited to Mr Borrelli’s first affidavit) and by the defendants.

Witnesses

  1. The plaintiffs called Mr Borrelli as a witness. His two affidavits were tendered and, subject to certain passages struck out in response to objections by the defendants, were received in evidence. Mr Borrelli also gave oral evidence in chief and was cross-examined and re-examined.
  2. The defendants called Mr Rollison, Mr Smith and Mr Brumby as witnesses. Their affidavits were tendered and received in evidence. Mr Smith and Mr Brumby also gave oral evidence-in-chief. Each witness called by the defendants was cross-examined and re-examined.

Mr Borrelli’s evidence generally

  1. Mr Borrelli and his brother Nicola Borrelli are currently and were at relevant times the directors of Acquista. Mr Borrelli has worked in the waste management industry since 1980. He has been the Chief Executive Officer of IWS since 2004.
  2. In general terms, I accept Mr Borrelli’s factual evidence about IWS’ business, its cost structure and the waste and soil management industries. I also accept his evidence about ResourceCo and ARR when he was speaking of his personal knowledge. Despite objections to his factual evidence and cross-examination concerning his source of knowledge of these factual matters, in general terms Mr Borrelli’s evidence about these matters was not ultimately controversial.[104] On the other hand, when Mr Borrelli expressed opinions or conclusions about the potential effect upon IWS’ business of the Authority entering into the Contract with ACP, I have not relied upon his opinions or conclusions. My findings under the heading Background above about IWS’ business, its cost structure, its competitors and the waste and soil management industries are based in part on evidence given by Mr Borrelli that was ultimately uncontroversial and in part on documents tendered by the parties.

IWS’ interest in the Land

  1. Mr Borrelli gave evidence that as at December 2013 IWS was interested in acquiring some or all of the Land. He expressed the belief that IWS was one of the few likely purchasers of the whole or large portions of the Land before it is remediated because it would be of limited interest to all but a few major players in the waste management industry before remediation. Mr Borrelli gave evidence that, if the Land had been offered for sale under a tender process, IWS would have participated. Mr Borrelli gave evidence that as at December 2013, if certain portions of the Land had been offered for sale under a tender process and it had been indicated that the price offered by a successful tenderer would need to be at least $30 per square metre, IWS would have been willing to purchase an allotment comprising 16 hectares (matching the size of Lot 201 or 202) or 39 hectares (matching the size of ARR Lot 3) or 150 hectares (the minimum size of the Stage 1 Option Land) or the entirety of the Land for that price.
  2. Mr Borrelli’s evidence in this respect was not challenged directly in cross-examination. He was, however, cross-examined concerning IWS’ interest in two parcels of land that subsequently came onto the market in September 2014. In addition, as noted above, there was some dispute on the evidence between Mr Borrelli and Mr Rollison as to the discussion between IWS and the Authority on 6 March 2013. I address those two matters before returning to Mr Borrelli’s evidence about IWS’ interest in purchasing the Land.

Discussion on 6 March 2013

  1. Notwithstanding their evidence in their affidavits, after cross-examination Mr Borrelli and Mr Rollison both agreed that during the discussion on 6 March Mr Borrelli expressed interest in some form of joint venture between IWS and the Authority and that Mr Borrelli expressed interest in the Authority’s land at Gillman in general. However, differences between their versions of the detail of the discussion remained.
  2. Mr Borrelli gave evidence that he referred to the 39 hectares that represents DRR Lot 3 initially and then moved on to refer to the whole of the Gillman land; whereas Mr Rollison gave evidence that he referred specifically to the HRE land although there was also discussion about the whole of the Gillman land. Mr Borrelli gave evidence that he was interested in IWS purchasing land, which Mr Rollison denied. Mr Borrelli gave evidence that he referred to waste fill for the land being derived from Newport Quays and Mr Rollison gave evidence that Mr Borrelli referred to calcrete fill being derived from Dublin, but neither denied the version given by the other.
  3. No submission was made during closing address that either witness was not being honest in giving his evidence and indeed no detailed submissions were made as to what findings I should make as to what was said on 6 March..
  4. I consider that each witness was attempting to narrate the conversation to the best of his recollection, but I find that the recollection of each witness was, not surprisingly, imperfect. I find that the conversation included the following elements.
  5. The discussion was mostly about the Authority’s land at Gillman in general. When Mr Borrelli referred to specific land, he was intending to refer to DRR Lot 3 but Mr Rollison either did not apprehend this or does not now recall it. When Mr Rollison referred to specific land, he was intending to refer to the HRE land but Mr Borrelli either did not apprehend this or does not now recall it.
  6. Mr Borrelli expressed interest in a joint venture of some type between IWS and the Authority involving the Authority’s land at Gillman generally. The proposed joint venture included the supply and delivery by IWS of fill to the land. The proposed joint venture would extend in some fashion to development of the land (to be explored in further detail at a later stage). Mr Borrelli referred to sourcing fill from both Newport Quays and Dublin. Mr Borrelli referred to starting with DRR Lot 3 but Mr Rollison either did not apprehend this or does not now recall it.
  7. Mr Rollison said that the Authority intended to develop the Gillman land generally for industrial purposes and it was completing a master plan with the intention of seeking that it be re-zoned from MFP to General Industry. He said that the Authority could not proceed with development until the master plan was completed, the land was re-zoned and development approval had been received.
  8. Mr Rollison said that the Authority could not acquire fill materials until it received development approval and the timing of development approval was out of its control. He said that, once development approval had been obtained, there would likely be a tender process for the development, including for the fill. He said that, once development approval had been obtained, he would contact IWS.
  9. Mr Borrelli gave to Mr Rollison the IWS March proposal, which Mr Rollison skimmed during the meeting and returned to Mr Borrelli at the end of the meeting.
  10. Mr Borrelli did not tell Mr Rollison that IWS was interested in purchasing the Gillman land. I make this finding for a combination of reasons, no one of which is decisive in itself. Mr Borrelli was relatively vague in his evidence in chief concerning the discussion about IWS’ interest in purchasing land, merely saying he said to Mr Rollison words to the effect “IWS would be willing to be involved as a purchaser or developer of all or part of the Gillman land” without any surrounding discussion or context. In cross-examination, Mr Borrelli at times accepted that purchase, as opposed to filling, was not discussed. Mr Rollison categorically denied that Mr Borrelli expressed interest in purchase and this was not seriously challenged in cross-examination. The IWS March proposal refers to filling but not to purchase.

Cross-examination on interest in subsequent land

  1. Mr Borrelli was cross-examined concerning IWS’ interest in 43 hectares of land (the GTW land) owned by the Authority immediately to the west of Grand Trunkway contained within an area known as Grand Trunkway West. In late August/early September 2014, the Authority placed advertisements in the Advertiser and the Australian Financial Review seeking expressions of interest closing on 18 September 2014 in respect of 53 hectares of land that included the GTW land. Mr Borrelli’s attention was drawn to the advertisements and on 9 September 2014 he and Mr Bowden inspected the GTW land. They subsequently obtained an information memorandum from the agent. IWS did not lodge an expression of interest.
  2. The information memorandum said that the property (whole or portion thereof) was offered for sale or lease by expression of interest. It said that the GTW land was located within Ports Policy Area 12, the objective of which was, inter alia, land for the long term growth of the port and to accommodate activities dependent on a port side location. It said that the GTW land will need to be brought up with controlled fill to a level of approximately 3.35 metres AHD. Mr Borrelli gave evidence that the average level of the GTW land was approximately 1.5 metres and that it would require in the vicinity of 600,000 to 800,000 cubic metres of fill to bring it up to this level.
  3. Mr Borrelli was challenged in cross-examination as to why IWS did not lodge an expression of interest in light of his evidence that IWS had a strong interest in acquiring land at Gillman in need of fill. He said that this was for a combination of reasons: the proximity of neighbouring industrial and other properties potentially adversely affected by the noise and dust generated by a filling operation; the proximity of the Adelaide Dolphin Sanctuary potentially adversely affected by loss of soil into the waterway; IWS was looking for land that could take a greater quantity of fill given the fixed mobilisation costs; and Veolia not being able to re-locate its operation to that land due to zoning constraints. Mr Borrelli was cross-examined at some length on these reasons and it was suggested to him that they were not sufficient for IWS not to proceed or at least not to lodge an expression of interest.
  4. Mr Borrelli was also cross-examined as to how IWS staff missed the advertisements in the Advertiser and the Australian Financial Review. Mr Borrelli gave evidence that he had instructed his staff to check newspapers generally for suitable land becoming available and they did not draw his attention to the advertisements until Veolia’s group general manager did so. While this is surprising, it does not demonstrate that IWS did not have an ongoing interest in acquiring suitable land.
  5. Mr Borrelli was cross-examined briefly concerning an information memorandum issued by Colliers International Property & Advisory relating to 5,500 hectares of land at the former Dry Creek Salt–Field. The information memorandum was issued in September 2014 and sought expressions of interest by 21 November 2014. Mr Borrelli said that IWS was considering lodging an expression of interest before the closing date. Mr Borrelli said that his preliminary assessment was that the end use was residential, the land was sensitive to environmental issues, there was no convenient crossover and Veolia could not relocate to that land, but no decision had yet been made whether to lodge an expression of interest.
  6. Mr Borrelli was cross-examined about the limited steps he took to approach the government concerning the availability of land before and after March 2013. He said that he only became aware in early 2012 that the Gillman land might be available, he then made various enquiries that ultimately led to the 6 March 2013 meeting and thereafter he was awaiting the processes described to him by Mr Rollison.

Finding on IWS’ interest in the Land

  1. I accept Mr Borrelli’s evidence as to IWS’ interest in purchasing the Land and willingness to do so as at December 2013. As noted above, he was not directly challenged in cross-examination as to that evidence. While he was challenged as to why IWS did not lodge an expression of interest in the GTW land, his explanation for not doing so does not cause me to doubt IWS’ interest in purchasing the Land. The cross-examination concerning the former Dry Creek Salt-Fields land was inconclusive because the closing date for expressions of interest had not yet been reached when Mr Borrelli gave evidence. While IWS clearly lagged behind its competitors, ResourceCo and ARR, in identifying the significance of the Authority’s land at Gillman, Mr Borrelli’s cross-examination does not lead me to doubt IWS’ level of interest in the Land by December 2013.

Other evidence by Mr Borrelli

  1. Mr Borrelli gave evidence about his observations of the fill on Lot 202. He said that he had observed Lot 202 on many occasions and that it contained fill to a height of more than 3 metres. He said that he had observed compactors working on the whole of Lot 202 and he had also observed heavy trucks driving on it without sinking in the manner expected if it had not been compacted. Several objections were made to Mr Borrelli’s evidence in this regard and he was cross-examined at some length concerning it.
  2. I find that Lot 202 contains compacted fill to a height of more than 3 metres. This is corroborated by ACP’s August Proposal, which says that in 2010 ResourceCo purchased a 16 hectare site, it was reclaimed and developed with nearly 1 million tonnes of fill material sourced and supplied by ResourceCo, preload material was placed in 500mm layers using track dozer compaction, select fill was placed and compacted in 200mm layers and the sub base layer was placed and compacted in 150mm layers.

Other evidence by Mr Rollison

  1. Mr Rollison was cross-examined extensively concerning various steps taken by and attitudes of executive staff of the Authority. Most of his evidence does not bear upon the matters that I have to decide.
  2. Mr Rollison gave evidence that there was no practical impediment to the Authority calling for expressions of interest in the Land or obtaining valuations of it under the terms and conditions of the drafts of the Contract.
  3. Mr Rollison said that his role was confined to assessing ACP’s proposal and did not extend to larger questions such as whether the Authority should call for expressions of interest or obtain valuations of the Land.
  4. Mr Rollison gave evidence that, until receipt of ACP’s unsolicited offer in June 2013, he and his colleagues did not turn their minds to the possibility of selling the Land as a single holding to a private developer.
  5. Mr Rollison gave evidence that he was not aware of a previous instance in which the Authority had granted to a party a free option over such a large parcel of land or had granted a licence to use a large parcel of land after an option had been exercised to purchase a portion only of it.

Evidence by Mr Smith and Mr Brumby

  1. Mr Smith was cross-examined at some length as to the matters upon which Mr Rollison was ultimately cross-examined. Mr Smith’s role in relation to the ACP proposal was very limited. In his capacity as secretary to the Board, he acted as the liaison between Mr Buchan and board members.
  2. Mr Brumby was cross-examined as to the processes subsequently adopted by the Authority to market the GTW land. He was cross-examined as to the Authority’s practices and the purposes and potential advantages of auctions, tenders, calls for expressions of interest and other open market processes. This was general and of limited significance to the issues I have to decide.

Pleading amendments and issues concerning parties’ cases at trial

  1. During closing addresses, a question arose as to whether it was open to the defendants, in the alternative to their primary case (the Cabinet decision case) that the substantive decision to enter into the Contract was made by Cabinet pursuant to the Contracting Delegations table and clause 6.1.1 of the Delegation Guidelines (the Contracting delegation), to advance a secondary case (the Minister decision case) that that decision was made by the Minister for Urban Development pursuant to the Property Delegations table and clause 6.4.1 of the Delegation Guidelines (the Property delegation). The plaintiffs contended that the Minister decision case had not been pleaded or run during the trial and it was not open to the defendants to raise it for the first time during closing address. The defendants demurred.
  2. I invited the first and second defendants to formulate proposed amendments to their defence to articulate clearly the Minister decision case without prejudice to their contention that such amendments were not strictly necessary. Similarly, I invited the plaintiffs to formulate proposed amendments to the statement of claim to articulate clearly their case as framed during closing address in other respects, and also their case on the assumption that the Contract Decision was made by the Minister, without prejudice to their contentions about what was open to the parties to run at trial without amendment.
  3. The first and second defendants sought permission to amend their defence in respect of the Minister decision case. The plaintiffs opposed this and in the alternative sought permission to amend their statement of claim to seek judicial review of the Minister’s decision if it should be held that the Contract Decision was made by the Minister.
  4. The plaintiffs sought permission to amend their statement of claim in various respects unrelated to the Minister decision case without prejudice to their contention that such amendments were not strictly necessary. The defendants generally did not oppose this. However, the first and second defendants did oppose the application for permission to amend the statement of claim to plead that any delegation to or authority of the Chief Executive to make the Contract Decision had been revoked by the Board by its 21 November 2013 resolution.
  5. A question also arose as to whether it was open to the third defendant to contend, in the alternative to its primary and secondary cases in support of the first and second defendants, that the Contract Decision was made by the Chief Executive (the Chief Executive decision case) or whether it was open to the Court to find that the Contract Decision had been made by the Chief Executive independently of such a case being advanced by the third defendant. The plaintiffs contended, and the third defendant denied, that the Chief Executive decision case had not been pleaded or run during the trial and it was not open to the third defendant to raise it for the first time during closing address. The plaintiffs contended that it was not open to the Court to find that the Contract Decision was made by the Chief Executive in the absence of a party advancing such a case.

The Minister decision case

  1. I granted permission to the first and second defendants to amend their defence to articulate clearly the Minister decision case. My reasons for granting permission follow.
  2. The plaintiffs’ case at all times was that the Chief Executive executed the Contract without authority from the Authority and it was thereby void. The plaintiffs rightly assumed the onus of pleading and proving that case. In their Third Statement of Claim, the plaintiffs first addressed the standing delegation effected by the Contracting delegation and pleaded why that delegation was not applicable as a source of authority for Cabinet to make the Contract Decision.[105] The plaintiffs then addressed the standing delegation effected by the Property delegation and pleaded why that delegation was not applicable as a source of authority to make the Contract Decision, namely that the role of the Minister was in the nature of a power of veto over a decision by the Chief Executive rather than a delegation of the decision-making function itself and in any event the consideration payable under the ACP contract was less than $4.4 million (inclusive of GST) and therefore the Property delegation did not apply to the Contract.[106] These pleas could not reasonably be understood as being confined to meeting in anticipation a case by the defendants that Cabinet made the Contract Decision exercising the Property delegation. If they were doing so, they could be expected to have pleaded that the Property delegation for disposals referred to in clause 6.4.1 was not conferred on Cabinet but they did not do so.
  3. It is true that the Third Statement of Claim created confusion and was contradictory in that it explicitly pleaded a decision by Cabinet on 2 December 2013 to approve the Authority entering into the Contract[107] and did not explicitly plead a decision by the Minister for Urban Development on any date. On the other hand, it did plead a decision by the Authority on or about 11 December 2013 to enter into the Contract without identifying who made that decision and the pleas concerning clause 6.4.1 of the Delegation Guidelines referred to above are capable of being read as contending that the Minister did not have authority pursuant to the standing delegation to make a decision on behalf the Authority on or about 11 December 2013 to enter into the Contract.
  4. Turning to the first and second defendants’ Second Defence, they had pleaded that the Contract was executed pursuant to the standing delegation referred to in clause 6.4 of the Delegation Guidelines. However, they created confusion of their own by pleading the reference to clause 6.4 of the Delegation Guidelines in the context of a plea that it was Cabinet that granted the approval exercising authority delegated to it by clause 6.4 in the alternative to their plea that Cabinet exercised authority delegated to it by clause 6.1.[108] In addition, they did not plead material facts comprising a decision by the Minister approving entry into the Contract.
  5. As appears from the Property delegation set out at [375] and [376] below, it is self-evident that the delegation referred to in clause 6.4.1 refers to the Minister and not to Cabinet and this must have been apparent to the plaintiffs when preparing their statement of claim and reading the defence of the first and second defendants.
  6. Turning to the manner in which the parties conducted their cases at trial, the first and second defendants lodged and served a written opening four days before commencement of the trial. The written opening addressed the delegation issue. Under the heading “Delegation to Cabinet”, it put contentions why the Instrument of Delegation delegated to Cabinet the power or function of approving entry into the Contract. Under the heading “Delegation to the Minister”, it put the alternative contention that the Instrument of Delegation by clause 6.4.1 delegated to the Minister for Urban Development the power or function of approving entry into the Contract. It contended that the Minister clearly approved entry into the Contract, evidenced by his recommendation, membership of Cabinet and the email sent on 3 December 2013 from his office to the Authority. Before closing addresses, the plaintiffs did not take issue with the entitlement of the defendants to put these contentions.
  7. In the circumstances, the plaintiffs cannot contend that delegation to and a decision by the Minister for Urban Development was not a live issue at trial or that the defendants could not run the Minister decision case at trial.[109]
  8. The plaintiffs contended that they would suffer prejudice if the first and second defendants were permitted during closing address to amend their defence and permitted to run the Minister decision case. The nature of that prejudice was identified in an affidavit sworn by the plaintiffs’ solicitor that, if he had been aware that the defendants’ case was that the Minister made a decision to approve the Contract independently of Cabinet, he would have sought disclosure of documents:
    1. evidencing or recording or communicating to the Authority any decision made by the Minister; and
    2. evidencing or recording the Minister’s consideration of the merits of ACP’s proposal.
  9. Given my conclusion that the plaintiffs should have been aware that delegation to and a decision by the Minister was a live issue at trial, this prejudice in itself should not prevent the defendants from running the Minister decision case at trial. On the other hand, documents falling within the categories sought were directly relevant to those live issues and it was appropriate that disclosure be made of documents falling within those categories.
  10. I concluded that it was desirable that the first and second defendants explicitly plead their Minister decision case. I also concluded that it was appropriate that the plaintiffs be permitted to plead explicitly their case in this respect (and this was not opposed by the defendants). I therefore granted permission to the first and second defendants to amend their pleading and to the plaintiffs to do likewise. I directed that the first and second defendants file an affidavit making disclosure of any documents falling within the categories identified by the plaintiffs’ solicitor and gave to the plaintiffs liberty to apply to revoke the permission, cross-examine the deponent on the affidavit or tender further documents after consideration of that affidavit.
  11. The solicitor for the first and second defendants swore an affidavit addressing the existence of documents falling within the identified categories. She said that in so doing she proceeded conservatively erring on the side of disclosure, and disclosed and exhibited documents evidencing or recording consideration of the ACP proposal by the Minister’s office and not necessarily by the Minister himself. The plaintiffs elected to make no further application in consequence of the affidavit.

The Chief Executive decision case

  1. As noted above, it is the first and second defendant’s secondary case, supported by the third defendant, that the relevant delegation by the Board was pursuant to the standing Property delegation and on its proper construction this delegation was to the Minister for Urban Development and the role of the Chief Executive thereafter was essentially ministerial confined to ensuring that the terms of the Contract were in accordance with the Miniter’s decision and then executing the Contract. It is the plaintiffs’ primary case that the only relevant delegation by the Board was pursuant to the standing Property delegation and this delegation was to the Chief Executive provided that he obtained the approval in principle of the Minister for Urban Development.
  2. If the plaintiffs’ primary case were accepted, the question logically arises whether the Chief Executive made a substantive decision to enter into the Contract (and whether the Minister gave approval for him to do so). When this question was asked of the parties during closing addresses, the first and second defendants said that it was not their case that the Chief Executive made a substantive decision, whereas the third defendant said that, if the plaintiffs’ primary case were accepted (and the defendants’ primary and secondary cases were rejected), its case was that the Chief Executive did make a substantive decision. The plaintiffs contended that it was not open to the third defendant to advance that case or for the Court to entertain it.
  3. The third defendant had pleaded in its Second Defence that Mr Hansen had actual authority, or alternatively ostensible authority, to enter into the Contract.[110] While the third defendant in the pleading relied upon Mr Hansen’s office as Chief Executive or the Power Of Attorney as sources of his authority to make the decision to enter into the Contract rather than the Property delegation, this plea is incapable of being read other than as a plea (albeit in the alternative) that the Chief Executive made the substantive decision to enter into the Contract and, in so doing, he acted within the scope of his authority conferred by the Authority.
  4. In these circumstances, it was always a live issue at trial arising from the third defendant’s defence whether the Chief Executive made such a substantive decision to enter into the Contract. The mere fact that the first and second defendants chose to eschew a case that the Chief Executive made such a decision does not preclude the third defendant from advancing that case. The mere fact that the Court might ultimately hold that the source of the Chief Executive’s power to make such a decision was the Property delegation rather than either of the sources identified by the third defendant does not preclude the third defendant from advancing its case that the Chief Executive made the substantive decision, albeit that the source of his authority to do so arises from the Property delegation as contended by the plaintiffs themselves.
  5. The plaintiffs contended that they would suffer prejudice if the third defendant were permitted to advance the Chief Executive decision case. The prejudice identified was founded on the fact that there had been no disclosure by the first and second defendants of any documents between 2 December 2013, when Cabinet made its decision, and 11 December 2013, when the Chief Executive executed the Contract, apart from the email of 3 December and the minutes of the board meeting of 9 December 2013, and the plaintiffs were deprived of disclosure of documents relevant to a decision by the Chief Executive to enter into the Contract. In addition, it was contended that, if the plaintiffs had been aware that the third defendant’s case was that the Chief Executive had made the substantive decision to enter into the Contract, they would have cross-examined witnesses called by the defendants, presumably Mr Rollison and Mr Smith,[111] on this topic.
  6. In relation to disclosure of documents, the third defendant’s defence plainly pleads that the Chief Executive made a decision to enter into the Contract. If there were documents in the possession of the first and second defendants directly relevant to that question, they should have been disclosed. Given the extensive history of consideration of ACP’s proposal by the executive staff, including the Chief Executive, of the Authority between June and December 2013, there is no reason to believe that further documents necessarily must have been created between 2 and 11 December 2013 (or during any other period) relating to the Chief Executive’s consideration of the proposal beyond those which have been disclosed. The plaintiffs point to the late disclosure by the first and second defendants of the Minute from Treasury and Finance to the Treasurer dated 29 November 2013 as evidencing inadequate disclosure by the first and second defendants. However, as the plaintiffs themselves contend, that document is relevant to a substantive decision by Cabinet or by the Minister for Urban Development and should have been disclosed independently of any Chief Executive decision case being advanced by the third defendant.
  7. In relation to cross-examination of witnesses called by the first and second defendants, each of Mr Rollison and Mr Smith were cross-examined at length concerning their knowledge of decisions made by the Authority’s officers at higher levels and comprehensively disclaimed having such knowledge on various topics upon which they were cross-examined. It is very unlikely that they could have added to the evidence adduced at trial relevant to the factual question whether Mr Hansen made a decision to enter into the Contract. I have concluded that that question is to be determined objectively, rather than by reference to Mr Hansen’s subjective state of mind, which renders it even more unlikely that Mr Rollison or Mr Smith could have given additional relevant evidence. In any event, as the third defendant’s defence rendered the question whether Mr Hansen made a substantive decision to enter into the Contract a live issue at trial, it was the responsibility of the plaintiffs to make decisions whether to cross examine on this issue.
  8. I therefore ruled that it was open to the third defendant to contend that the Chief Executive made the substantive decision to enter into the Contract and open to the Court to make such a finding if it should be made on the merits. I granted permission to the plaintiffs, which was not opposed by the defendants, to amend their statement of claim to seek a review of the Chief Executive’s decision if it should be found that the Contract Decision was required to be made by the Chief Executive.
  9. My conclusion rendered it unnecessary to consider whether it would have been open to the Court to entertain the question whether the Chief Executive made the substantive decision to enter into the Contract in the absence of any party pleading or advancing that case. Particularly given the nature of judicial review proceedings which transcend the interests of the parties themselves, it should not be assumed that this course would not have been open to the Court subject to considerations of prejudice.[112]

The Board revocation case

  1. The plaintiffs applied for permission to amend their statement of claim to plead that any delegation to or authority of the Chief Executive to make the Contract Decision had been revoked by the Board by its 21 November 2013 resolution.
  2. The first and second defendants initially opposed this application on the ground that they would suffer prejudice because, if it had been earlier pleaded, they may have adduced evidence relevant to this issue at trial. Ultimately, they accepted that they would not have adduced any additional evidence and would not suffer prejudice if permission to amend were granted.
  3. I granted permission to the plaintiffs to amend their statement of claim in this respect.

PART D: STANDING OF THE PLAINTIFFS

  1. The first issue to be determined is whether the plaintiffs have standing to seek the relief sought. I assume – without deciding – for the purpose of this analysis that the relevant decisions and actions are amenable to review because otherwise the issue of standing would not arise.
  2. In Boyce v Paddington Borough Council,[113] Buckley J said that a plaintiff has standing to institute proceedings in relation to interference with a public right if the plaintiff “suffers special damage peculiar to himself from the interference with the public right.”[114]
  3. In that case, the defendant Council had control over a churchyard required to be held free from buildings under the Metropolitan Open Spaces Acts 1877, 1881 (UK). The plaintiff owned an adjoining building with windows looking out over the churchyard. It was held that the plaintiff had standing to bring judicial review proceedings claiming it was unlawful for the Council to erect a hoarding in the churchyard to obstruct light to the plaintiff’s window. It was sufficient to give the plaintiff standing that the hoarding would take away the opportunity the plaintiff might otherwise have to acquire a prescriptive right to light in future by uninterrupted access over a period of years.
  4. In Australian Conservation Foundation Inc v The Commonwealth of Australia,[115] Gibbs J said:
Although the general rule is clear, the formulation of the exceptions to it which Buckley J. made in Boyce v. Paddington Borough Council is not altogether satisfactory. Indeed the words which he used are apt to be misleading. His reference to "special damage" cannot be limited to actual pecuniary loss, and the words "peculiar to himself" do not mean that the plaintiff, and no one else, must have suffered damage. However, the expression "special damage peculiar to himself" in my opinion should be regarded as equivalent in meaning to "having a special interest in the subject matter of the action." ...
... However, an interest, for present purposes, does not mean a mere intellectual or emotional concern. A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails.[116]
(Footnotes omitted)
  1. In Onus v Alcoa of Australia Ltd,[117] Gibbs CJ (Stephen and Mason J relevantly agreeing) said:
The principle which has been settled by the courts ...was recently stated in Australian Conservation Foundation Inc. v. The Commonwealth. A plaintiff has no standing to bring an action to prevent the violation of a public right if he has no interest in the subject matter beyond that of any other member of the public; if no private right of his is interfered with he has standing to sue only if he has a special interest in the subject matter of the action. The rule is obviously a flexible one since, as was pointed out in that case, the question what is a sufficient interest will vary according to the nature of the subject matter of the litigation.
It seems to me that the appellants have an interest in the subject matter of the present action which is greater than that of other members of the public and indeed greater than that of other persons of aboriginal descent who are not members of the Gournditch-jmara people. The appellants, and other members of the Gournditch-jmara people, would be more particularly affected than other members of the Australian community by the destruction of the relics...
...Counsel for Alcoa sought to meet the claim that the appellants and the other members of the Gournditch-jmara community put the relics to actual use by submitting that no relief could be given to them which would enable them to continue to use the relics. Alcoa, he said, has the right to occupy, and indeed owns, the land; the appellants have no right to resort to the land and therefore could gain no advantage from success in the present action. There is therefore, he submitted, no sufficient relationship between the facts relied on as giving standing and the relief sought in the action. With all respect this argument, although plausible, is unconvincing. If the relics are preserved, the appellants will at least have a possible opportunity to have access to them.[118]
(Footnotes omitted)

Brennan J gave expansive reasons for agreeing with the test articulated by Gibbs CJ,[119] adding:

The interests which were held sufficient to give standing in these cases may not have satisfied the Court of Appeal in Boyce but they fall squarely within the concept of "special interest" expressed in the A.C.F. Case.
...
If the grant of declaratory and injunctive relief to enforce performance of public duties is not now dependent upon an affection of public proprietary interests, there is no reason in principle why the special interest in that relief which a plaintiff must show should necessarily consist in an affection of his proprietary or pecuniary interests by the threatened breach of the law. ...
...the question whether the private plaintiff has or has not legal or equitable rights to enforce does not furnish an exhaustive test for distinguishing between the two classes.
...
A plaintiff must show that he has been specially affected, that is, in comparison with the public at large he has been affected to a substantially greater degree or in a significantly different manner. It is not necessary to show that the plaintiff is uniquely affected; there may be some others whose interests may be affected in like manner.[120]
(Footnotes omitted)

and Wilson J referred to and applied the test formulated by Gibbs J in Australian Conservation Foundation Inc v The Commonwealth of Australia.

  1. The High Court subsequently endorsed the test formulated by and approach of Gibbs CJ in Australian Conservation Foundation Inc v The Commonwealth of Australia and Onus v Alcoa of Australia Ltd and criticised the test formulated by Buckley J in Boyce v Paddington Borough Council as being unduly restrictive.[121]
  2. In Bateman’s Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd,[122] the plaintiff Benefit Fund operated a funeral benefit fund catering for members of the New South Wales aboriginal community. The defendant Land Council proposed to establish a funeral benefit fund catering for the same persons. The Benefit Fund instituted proceedings seeking a declaration that the Land Council had no power under the Aboriginal Land Rights Act 1983 (NSW) to establish or carry on a funeral benefit fund. The Land Council argued that the Benefit Fund had no standing to seek relief because the Benefit Fund was not a member of and had no interest in the Land Council or its operations. The High Court held that the Benefit Fund had standing. Gaudron, Gummow and Kirby JJ said:
In the joint judgment of Brennan, Dawson, Toohey, Gaudron and McHugh JJ in Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (SA), reference was made to the requirement that the plaintiff have "a special interest in the subject matter of the action". Their Honours stated that the rule is flexible and continued that "the nature and subject matter of the litigation will dictate what amounts to a special interest". This emphasises the importance in applying the criteria as to sufficiency of interest to support equitable relief, with reference to the exigencies of modern life as occasion requires. It suggests the dangers involved in the adoption of any precise formula as to what suffices for a special interest in the subject matter of the action, where the consequences of doing so may be unduly to constrict the availability of equitable remedies to support that public interest in due administration which enlivens equitable intervention in public law. That would be the consequence of the adoption of the approach taken by the primary judge in this litigation. It will be recalled that, in Onus v Alcoa of Australia Ltd, Brennan J warned that to deny standing may be to "deny to an important category of modern public statutory duties an effective procedure for curial enforcement".[123]
(Footnotes omitted)
  1. In Edwards v Santos Ltd,[124] Heydon J (French CJ, Gummow, Crennan, Kiefel and Bell JJ agreeing) said:
The plaintiffs have a sufficient interest to make those claims, because success in those claims would advance their interests in the negotiations which the parties were contractually obliged to conduct. The plaintiffs have standing because they have an interest in the question whether the ATP is valid which is greater than that of other members of the public...
...here, whether or not the plaintiffs have rights enforceable against the petroleum defendants, the question whether the ATP is valid is not hypothetical, it is of real practical importance to the plaintiffs, they have a real commercial interest in the relief, the petroleum defendants (and Queensland) are plainly contradictors, and there is obviously a real controversy.[125]
(Footnotes omitted)
  1. In the present case, the plaintiffs are one of the three major operators in the waste and soil management industries in greater Adelaide. Those operators are the plaintiffs, ResourceCo and ARR. ResourceCo is proposed by ACP to be the supplier of millions of tonnes of waste fill on the Land for the purpose of development by ACP if ACP exercises the Options under the Contract. The holding company of ResourceCo owns 50 percent of the shares in ACP. The three major operators in the waste and soil management industries have a natural interest and advantage in acting in conjunction with a substantial developer to purchase the Land for a commercial price. This is evidenced by the fact that between March and June 2013 they each expressed interest in the Land to the Authority.
  2. Mr Borrelli gave evidence, which was not challenged or contradicted, that as at December 2013 IWS would have been willing to purchase the Land for $30 per square metre and it is apparent from the evidence that Veolia has the financial capacity to make such a purchase.
  3. The Authority itself identified the interest of operators in the waste and soil management industries in the Land. In the fourth Board Paper, it was stated that:
... there has been a general understanding for some years that land at Gillman / Dry Creek would be available for industrial / commercial uses with a number of unsolicited enquiries received by Government for proportions of the land. These enquiries have generally related to land fill operations whereby the land would be held for fill disposal until such time as it could be developed for other industrial/commercial use.
  1. The plaintiffs as interested prospective purchasers of the Land have an interest in the question whether the Authority made a valid decision to enter into the Contract which is much greater than that of other members of the public, being an interest likely possessed by only a handful of entities. The question is of real practical importance to the plaintiffs and they have a real commercial interest in the relief. The plaintiffs have a special interest in the subject matter of the action within the meaning of that test as formulated and developed by the High Court. The plaintiffs are not deprived of standing because they do not have a right to negotiate with the Authority to purchase the Land. Due to the purported decision of the Authority to enter into a contract, the plaintiffs have been deprived of such opportunity as they would otherwise have had to negotiate with the Authority to purchase the land.
  2. The plaintiffs have standing to bring this action.

PART E: AMENABILITY TO REVIEW

  1. The second issue to be determined is whether the challenged decisions are amenable to review.
  2. The defendants contend that none of the decisions are amenable to review on any grounds. The defendants contend that this arises from:
    1. the source of the power of the Authority to enter into the Contract being common law rather than statutory or under the Royal prerogative; or
    2. alternatively, the subject matter of the decisions being commercial in nature.
  3. The defendants contend that in any event the Advice Decision is not amenable to review because it was merely recommendatory and was not required to be taken into account by the ultimate decision-maker.

Source of power

  1. The defendants’ first contention is that the source of the power of the Authority to enter into contracts is the common law rather than its being a statutory or prerogative power and that common law powers exercised by public authorities are not amenable to judicial review. The defendants make this contention independently of which ground of review is relied upon by the plaintiffs and independently of the subject matter or nature of the decision the subject of the application for review.
  2. The defendants contend that the source of the Authority’s powers is the common law because section 8(3)(b) of the Act equates the Authority to a natural person and provides that, subject to any statutory limitations, the Authority has all the powers of a natural person. The defendants contend that this is also so because, or notwithstanding, section 21(1)(f) of the Act confers power on the Authority to enter into any kind of contract or arrangement.
  3. The defendants contend that it cannot be said that the source of power of the Authority to enter into a contract is statutory merely because its powers derive from sections 8 and 21 of the Act by analogous reasoning to that adopted in cases that have held that a decision is not “under an enactment” within the meaning of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act).
  4. The defendants also put this contention in a different way further or in the alternative to their primary contention. They contend that a decision to enter into a contract does not itself affect rights and interests and therefore can never be amenable to judicial review. They contend that it is the contract itself that affects rights and interests and this aspect is derived from the consensual nature of the contract rather than the exercise of power by paramount force.

Statutory v prerogative or common law power

  1. In Council of Civil Service Unions v Minister for The Civil Service,[126] the Minister made a decision under a Civil Service Order in Council made in turn under the prerogative power to give an instruction that staff at the Government Communications Headquarters cannot belong to a national trade union. On application by the trade union for judicial review, the Minister contended that his decision and instruction were not amenable to review because, inter alia, the manner of exercise of a prerogative power cannot be reviewed. The House of Lords rejected that contention, holding that executive action is amenable or not to judicial review according to its nature and subject matter independently of the source of power. Lord Fraser said:
The Order in Council, being made under the prerogative, derives its authority from the sovereign alone and not, as is more commonly the case with legislation, from the sovereign in Parliament. ... But whatever their source, powers which are defined, though, either by reference to the object or by reference to procedure for their exercise, or in some other way, and whether the definition is expressed or implied, are in my opinion, normally subject to judicial control to ensure that they are not exceeded.[127]

Lord Scarman said:

I believe that the law relating to judicial review has now reached the stage where it can be said with confidence that, if the subject matter in respect of which prerogative power is exercised is justiciable, that is to say if it is a matter upon which the court can adjudicate, the exercise of the power is subject to review in accordance with the principles developed in respect of the review of the exercise of statutory power.... The Royal prerogative has always been regarded as part of the common law... Today, therefore, the controlling factor in determining whether the exercise of prerogative power is subject to judicial review is not its source, but its subject matter.[128]

Lord Diplock said:

As respects “procedural propriety” I see no reason why it should not be a ground for judicial review of a decision made under powers of which the ultimate source is the prerogative... But in any event what procedure will satisfy the public law requirement of procedural propriety depends upon the subject matter of the decision, the executive functions of the decision-maker (if the decision is not that of an administrative tribunal) the particular circumstances in which the decision came to be made.[129]

and Lord Roskill said:

If the executive instead of acting under a statutory power acts under a prerogative power... so as to affect the rights of the citizen, I am unable to see, subject to what I shall say later, that there is any logical reason why the fact that the source of the power is the prerogative and not statute should totally deprive a citizen of that right of challenge to the manner of its exercise which he would possess were the source of the power statutory.[130]
  1. In Minister for Arts, Heritage and Environment v Peko-Wallsend Ltd,[131] a Full Court of the Federal Court followed the House of Lords’ decision. Bowen CJ (Sheppard J agreeing) said:
In the United Kingdom in the CCSU case their Lordships took the view that Executive action was not immune from judicial review merely because it was carried out in pursuance of a power derived from the common law or prerogative rather than a statutory source. A Minister acting under a prerogative power might, depending upon the subject matter, be under the same duty to act fairly, as in the case of his acting under a statutory power. The words “depending on its subject matter: were designed to cover matters which were regarded as not justiciable in the courts...
In my opinion, subject to the exclusion of non-justiciable matters, the courts of this country should now accept responsibility for reviewing the decisions of Ministers or the Governor-General in Council notwithstanding the decision is carried out in pursuance of a power derived not from statute but from the common law or the prerogative.[132]

and Wilcox J (Sheppard J agreeing) said:

...in Council of Civil Service Unions v Minister for The Civil Service... All members agreed that the fact that the power being exercised had its origins in the Royal prerogative was not enough to exclude judicial review... I think that, in the current state of authority, it is not possible to exclude judicial review of a decision merely because it was one made by the Cabinet, merely because it was a decision taken in the exercise of the prerogative powers of the Crown or merely because the decision combined both these characteristics. The critical matter is the nature and effect of the relevant decision. Nature and effect involves two elements: justiciability in the sense described by Lord Diplock in CCSU and, if the decision is justiciable, whether it contained some feature... which makes judicial review inappropriate in a particular case.[133]
(Footnotes omitted)
  1. In Blyth District Hospital Inc & Anor v South Australian Health Commission & Anor,[134] King CJ (Matheson J agreeing) said:
It is now well established in the law that certain types of decisions by the executive government itself is subject to review by the Courts... It is also now established, in my opinion, that the Courts will review such a decision irrespective of whether it is made in the exercise of a power derived from statute, common law or the prerogative: Council of Civil Service Unions v Minister for The Civil Service (supra); Minister for Arts, Heritage and Environment v Peko-Wallsend Ltd.[135]
(Footnotes omitted)
  1. In Von Einem v Griffin & Anor,[136] the Full Court held that judicial review was not available in respect of the Governor’s prerogative of mercy. Prior J (Wicks J agreeing) said:
The approach of the House of Lords in Council of Civil Service Unions v Minister for Civil Service, is to have judicial review applicable to the exercise of prerogative or common law powers provided it relates to a public law matter and the subject matter is justiciable.... There are decisions of several Australian courts accepting the CCSU approach. In this State, in Blyth Hospital v SA Health Commission, King CJ[‘s]... view was that the review occurs “irrespective of whether it is made in the exercise of a power derived from statute, common law or the prerogative”.[137]

and Lander J said:

The modern approach does not deny that a prerogative power can be judicially examined because it is a prerogative power, but rather considers the nature or subject matter of the power which is sought to be reviewed.
It is the nature or the subject matter of the power which determines whether it is subject to review rather than whether the power owes its source to prerogative or statute.[138]
(Footnotes omitted)
  1. In Xenophon v State of South Australia & Ors,[139] the Full Court held that judicial review was not available in respect of a decision by the Executive Council or the Attorney-General to indemnify a Minister in relation to a defamation action. Prior J (with whom Lander J agreed) said:
Judicial review is available against the Crown with respect to the exercise of statutory powers and to some aspects of the royal prerogative. However, the submission was that it is not available here since the action taken by the Attorney-General with respect to Mr Lucas’ liability and costs involves the exercise of a prerogative power in the widest sense embracing a power the exercise of which is not exercisable by reference to objective criteria or considerations, but rather policy and political ones. The power exercised here was likened to a person’s power to contract. The exercise of the power alone is not susceptible to judicial review.. It is unassailably correct that the Executive, in common with members of the community at large, may grant indemnities to any person to whom it is thought appropriate to grant such an indemnity. The Crown has certain special prerogative and statutory powers. That most of them are now open to judicial review does not dictate that all “rights and capacities” enjoyed by the Crown “in common with” others should also be open to judicial review. Thus, the exercise of a simple capacity to indemnify is not the exercise of a capacity which can be the subject of judicial review. The very subject matter of the power means that.[140]

and Bleby J (with whom Lander J also agreed) said:

It was argued that an exercise of the Crown prerogative of this nature was immune from judicial review. As Wilcox J pointed out in Minister for Arts Heritage and Environment v Peko Wallsend Ltd, courts have always been able to examine the validity of an Executive Council decision if it were said to be beyond power. Courts would also interfere if the decision was bad in form. Review on other grounds was not available. However, since the 1980’s, there had been considerable relaxation of that position ...
The prohibition on judicial review of executive decisions was relaxed substantially in the UK in Council of Civil Service Unions v Minister for the Civil Service. King CJ, with whom Matheson J agreed, considered that it was well established by that decision and by Peko-Wallsend that “the courts will review.... a decision [of the executive government] irrespective of whether it is made in the exercise of a power derived from statute, common law or the prerogative”: Blyth District Hospital Inc v SA Health Commission. His Honour recognised, however, as have others, that there is a “wide range of executive government decisions based upon policy and political considerations which are not subject to judicial review and which are not subject to a duty to provide persons affected thereby an opportunity to be heard”. As Lander J pointed out in Von Einem v Griffin, the unwillingness of courts to intervene by judicial review is not because the power in question is a prerogative power. It depends on the nature and subject matter of the power which is sought to be reviewed...
The elusive question is the nature of the power that will be excluded from judicial review and that which will be subject to judicial review....
Most prerogative decisions to enter into contracts and to grant indemnities will not be subject to review. This is because they may properly be said not to be exercisable by reference to the rights of citizens, or for particular purposes or by reference to objective considerations and criteria. Some will be exercised by reference to policy and political considerations only. Some will be exercised as being essential for government administration. It is for these sorts of reasons that most decisions of this nature will not be subject to judicial review. In particular, courts cannot be made reviewers of government policy or administrative necessity.[141]
(Footnotes omitted)
  1. The defendants contend that the decision of the Full Court in Khuu & Lee Pty Ltd v Corporation of the City of Adelaide[142] is authority for the proposition that, in order to be amenable to judicial review at common law, the prerequisite imposed by the ADJR Act that a decision be “made under an enactment” is to be applied by analogy.[143]
  2. The ADJR Act applies to “a decision of an administrative character made...under an enactment”. In Australian National University v Burns,[144] the University was governed by the Australian National University Act 1946 (Cth). It entered into a contract of employment with Professor Burns which empowered it to terminate the contract if he became permanently incapacitated from performing his duties. The Council of the University subsequently terminated the contract on this ground. A Full Court of the Federal Court held that the Council’s decision was not made “under an enactment” but rather under the contract. Bowen CJ and Lockhart J said:
Notwithstanding that s. 23 was the source of the council's power to appoint and dismiss the respondent in 1966, it does not follow that the decision to dismiss him was made under the University Act. The answer to the question lies in the true characterization of the decision itself. It was not a decision to dismiss the respondent simpliciter. It was a decision to dismiss him on a particular ground namely, that he had become permanently incapacitated from performing the duties of his office. This was one of the grounds expressly provided for in condition 2 (b) (ii) of the conditions of appointment which formed part of the respondent's contract of engagement. The University Act prescribes no essential procedural requirements to be observed before a professor is dismissed and lays down no incidents of a professor's employment.
In our opinion the rights and duties of the parties to the contract of engagement were derived under the contract and not under the University Act. Section 23 empowered the council to enter into the contract on behalf of the appellant. Even if the council, in considering the position of the appellant under the contract might be said to be acting under s. 23, the effective decision for dismissal taken and notified to the respondent was directly under the contract.
...
If the making of a contract is authorized by an enactment, and such a contract, when made, in fact provides for the making of certain decisions, it does not necessarily follow that those decisions, when made, are not made under the enactment. This must depend on the language and operation of the particular enactment and contract.[145]
  1. In Griffith University v Tang,[146] the position was similar except that Ms Tang was not engaged under a contract but under a consensual arrangement under the general law. Gummow, Callinan and Heydon JJ said:
If the decision derives its capacity to bind from contract or some other private law source, then the decision is not "made under" the enactment in question. Thus, in Lewins, a decision not to promote to Reader a member of the staff of the Australian National University was not "made under" the Australian National University Act 1991 (Cth) ("the ANU Act"). Lehane J explained:
"In this case, the relevant statutory power (in s 6(2)(k) of the ANU Act) is simply one 'to employ staff'. Obviously that, taken together with the general power to contract, empowers the University to enter into contracts of employment, to make consensual variations of employment contracts and to enter into new contracts with existing employees. But I cannot see how it is possible to construe a mere power to employ staff as enabling the University unilaterally to vary its contracts with its employees or to impose on them, without their consent, conditions which legally bind them – except, of course, to the extent that contracts of employment may themselves empower the University to make determinations which will be binding on the employees concerned."
For these reasons, a statutory grant of a bare capacity to contract does not suffice to endow subsequent contracts with the character of having been made under that enactment. A legislative grant of capacity to contract to a statutory body will not, without more, be sufficient to empower that body unilaterally to affect the rights or liabilities of any other party. The power to affect the other party's rights and obligations will be derived not from the enactment but from such agreement as has been made between the parties. A decision to enter into a contract would have no legal effect without the consent of the other party; the agreement between the parties is the origin of the rights and liabilities as between the parties.[147]
(Footnotes omitted)
  1. In General Newspapers Pty Ltd & Ors v Telstra Corporation,[148] General Newspapers expressed interest to Telstra in printing the White Pages and Yellow Pages and its name was placed on a list of potential tenderers. After Telstra entered into new contracts with its existing printer without calling for tenders, General Newspapers brought proceedings under the ADJR Act. A Full Court of the Federal Court held that Telstra’s decision was not “a decision of an administrative character made under an enactment”. Davies and Einfeld JJ said:
Earlier, in Kioa v West, Mason J undoubtedly had that principle in mind when he said (at 584):
"The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention."
The reference to "administrative decisions which affect rights, interests and legitimate expectations" reflects the concept which his Honour developed in more detail in Australian Broadcasting Tribunal v. Bond. In Bond, Mason CJ did not imply that there was a duty to comply with the rules of natural justice in respect of every act or thing done by a body incorporated or otherwise formed under a federal enactment or in circumstances governed entirely by the ordinary laws of the land such as the law of contract. His Honour was speaking of decisions which had force and effect because they were authorised or required by an enactment. See also Annetts v. McCann.[149]
(Footnotes omitted)
  1. In Khuu & Lee Pty Ltd v Corporation of the City of Adelaide,[150] the Council granted a lease and two licences to Khuu & Lee for a stall at the Adelaide Central Market. Upon their expiry, the Council offered to renew the lease and one licence but not the other licence. Khuu & Lee sought judicial review of that decision on the ground that the Council was obliged to accord procedural fairness giving to it the opportunity to adduce evidence and make submissions before making a decision. Khuu & Lee contended that a decision whether to renew a licence was governed by section 202 of the Local Government Act 1999 (SA) but the Full Court rejected that contention as a matter of statutory construction and it can be put aside. The Full Court held that the position was comparable to that in a private shopping centre and the Council’s decision was not of an administrative character and was not amenable to review. Contrary to the defendants’ contention in the present case, the Full Court did not apply by analogy or otherwise a requirement that, to be amenable to judicial review, the Council’s decision must have been made under an enactment. Vanstone J (Sulan and Peek JJ agreeing) said:
The respondent’s power to contract is given by s 36 of the LGA. The mere fact that the power to contract is found in the LGA does not mean that any decision taken relevant to a contract is amenable to judicial review. Not every decision taken by a statutory corporation pursuant to a general power to contract is liable to judicial review; only administrative decisions affecting rights, interests and legitimate expectations: General Newspapers Pty Ltd v Telstra Corporation. General Newspapers was a case decided in the context of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) which applies to “decisions of an administrative character made ... or required to be made ... under an enactment”: s 3 ADJR Act. However, the judgment of Davies and Einfeld JJ makes clear that at common law the obligation to afford procedural fairness is likewise confined to administrative decisions. Their Honours referred to the quotation from the judgment of Mason J in Kioa earlier set out and observed (at 171):
The reference to administrative decisions which affect rights, interests and legitimate expectations’ reflects the concept which his Honour developed in more detail in Australian Broadcasting Tribunal v Bond. In Bond, Mason CJ did not imply that there was a duty to comply with the rules of natural justice in respect of every act or thing done by a body incorporated or otherwise formed under a federal enactment or in circumstances governed entirely by the ordinary laws of the land such as the law of contract. His Honour was speaking of decisions which had force and effect because they were authorised or required by an enactment. See also Annetts v McCann.
The decision in Griffith University v Tang illustrates the same distinction. There, in the context of the appellant having been excluded from a university post-graduate degree program, the plurality, comprising Gummow, Callinan and Heydon JJ, observed (at 129):
... a statutory grant of a bare capacity to contract does not suffice to endow subsequent contracts with the character of having been made under that enactment. A legislative grant of capacity to contract to a statutory body will not, without more, be sufficient to empower that body unilaterally to affect the rights or liabilities of any other party. The power to affect the other party's rights and obligations will be derived not from the enactment but from such agreement as has been made between the parties. A decision to enter into a contract would have no legal effect without the consent of the other party; the agreement between the parties is the origin of the rights and liabilities as between the parties.
In my view the respondent’s decision not to renew the appellant’s licence was not an administrative decision, but rather an ordinary decision made in the course of a conventional commercial relationship.[151]
(Emphasis added; citations omitted)
  1. The passages quoted, read as a whole, show that Vanstone J was referring to a need for a decision to be of an administrative character to be amenable to judicial review at common law, rather than any need for it to have been made “under an enactment”. The statement by Her Honour that “not every decision taken by a statutory corporation pursuant to a general power to contract is liable to judicial review” connotes that some such decisions are liable to judicial review. The statement that decisions liable to judicial review are “only administrative decisions affecting rights, interests and legitimate expectations” shows that it was because the Council’s decision was not of an administrative character, rather than because it had not been made “under an enactment”, that it was not liable to judicial review.
  2. Vanstone J went on to analyse the relationship between the Council and Khuu & Lee and held that it was contractual and private in nature and did not give rise to public law considerations. Her Honour concluded:
As I have observed, the facts of Beer, and indeed Agnello, are far from the present situation. The critical feature in both was the historical common law right of public access to the land which gave decisions relevant to the market a sufficient “public element, flavour or character”. That imposed additional obligations on the councils in their dealings with licence holders. In contrast, members of the public have no established right to set up a stall in the Central Market and the public has no particular interest in the negotiations between the Corporation and potential stall holders. The position with respect to the Central Market is that the contractual relations between the Corporation and licence holders are essentially private. It is comparable to a private shopping centre.[152]
(Citations omitted)
  1. Vanstone J held that the Council’s decision was not amenable to judicial review because it was not an administrative decision. Vanstone J did not say that the requirement in the ADJR Act that a decision be “made under an enactment” should be imported by analogy into the criteria for determining reviewability at common law, nor did Her Honour hold that the Council’s decision was not reviewable because it was not made under an enactment. The decision was not reviewable because of its nature and subject matter. Further, no reference was made to the earlier Full Court decisions in Blythe District Hospital Incorporated v South Australian Health Commission,[153] Von Einem v Griffin[154] or Xenophon v State of South Australia,[155] in which it had been held that it was the nature and subject matter of a decision which determine amenability to review rather than whether the source of the power is statute, the prerogative or common law.
  2. In addition, there was no equivalent in Khuu & Lee Pty Ltd to the plaintiffs’ contention in the present case that the decision to enter into a contract was made without power under section 19 of the Act or was made in contravention of section 11 of the Public Corporations Act.
  3. The judgment of Prior J in Xenophon v State of South Australia is not authority for the defendants’ contention. The reason why Prior J concluded that the decision in that case was not amenable to review was based upon its nature and subject matter rather than the source of the power to grant indemnities. This is apparent from the passage extracted at [256] above. It is confirmed by the fact that Lander J agreed with Bleby J as well as Prior J and Bleby J not only based his decision upon the nature and subject matter of the decision but also explicitly cited with approval the four decisions referred to above that the source of power is not a relevant criterion.
  4. I reject the defendants’ contention that, if the source of the power of the Authority to enter into contracts is the common law rather than its being a statutory or prerogative power, it is not amenable to judicial review. In any event, the grounds of judicial review relied on by the plaintiffs based on section 19 of the Act and section 11 of the Public Corporations Act entail that public law principles are engaged in this action.

Rights and interests

  1. The defendants contend that a decision to enter into a contract does not itself affect rights and interests and therefore can never be amenable to judicial review. They contend that it is the contract itself that affects rights and interests and this effect is derived from the consensual nature of the contract rather than the exercise of power by paramount force. I reject this contention.
  2. The distinction drawn by the defendants between the decision by a public authority to enter into a contract and the rights and interests that arise from entry into the contract is artificial. The rights and interests that arise from the contract are a direct result of the decision by the public authority to enter into the contract. There is no reason in principle or policy why the decision should not be amenable to judicial review merely because the rights and interests affected by the decision come into existence upon entry into the contract with the other party rather than immediately upon making the decision.
  3. The defendants rely upon the passages from Griffith University v Tang[156] and General Newspapers Pty Ltd v Telstra Corporation[157] cited at [259] and [260] above. However, the references in those cases to decisions unilaterally affecting rights and interests are in the context of the requirement imposed by the ADJR Act that the decision be made “under an enactment”. The defendants rely upon passages from Khuu & Lee Pty Ltd v Corporation of the City of Adelaide[158] cited at [261] above, but they have been explained above and do not support the defendants’ proposition.
  4. The decisions in The State of Victoria v The Master Builders Association of Victoria,[159] CO Williams Construction Ltd v Blackburn & Ors[160] and MBA Land Holdings Pty Ltd v Gungahlin Development Authority & Ors[161] addressed below are inconsistent with the defendants’ proposition.
  5. The defendants’ contention also does not sit well with the decision of the High Court in Bateman’s Bay Local Aboriginal Land Council & Anor v The Aboriginal Community Benefit Fund Pty Ltd & Anor[162] In that case, the High Court held that the plaintiff competitor had standing to seek to restrain the defendant Land Council from establishing a funeral benefit fund as beyond power. If the business had been established, it would have been conducted by entering into contracts with clients and suppliers. While amenability to review was not in issue as such, the High Court proceeded on the basis that the decision was amenable to review on the institution of proceedings by a party with standing.

Conclusion

  1. I reject the defendants’ contention that the Contract Decision is not amenable to review because of the source of power to make the decision.

Nature and subject matter of decision

  1. The defendants contend that the nature and subject matter of the Contract Decision is such that it is not amenable to review. This is because of its commercial character and the inherently subjective nature of commercial decision-making.
  2. Some decisions are not amenable to review because they involve policy decisions, there is no criterion by reference to which judicial review could be undertaken or they do not involve any relevant public element.
  3. In Xenophon v State of South Australia & Ors,[163] Bleby J (Lander J agreeing) acknowledged that most prerogative decisions to enter into contracts are not subject to review because they are exercised by reference to policy and political considerations.
  4. In Khuu & Lee Pty Ltd v Corporation of the City of Adelaide,[164] the Full Court held that the contractual relationship between the Council and the stallholder was private and comparable to that in a private shopping centre. Hence, the Council’s decision was not of an administrative character and was not amenable to review.
  5. In Mercury Energy Ltd v Electricity Corporation of New Zealand Ltd,[165] the Corporation, which had entered into a contract to supply electric power to Mercury’s predecessor, terminated the contract. Mercury sought judicial review of that decision on various grounds. The Privy Council held that the decision was amenable to judicial review at common law. Lord Templeman (Lords Goff, Mustill, Slynn and Woolf agreeing) said:
Judicial review was a judicial invention to secure that decisions are made by the executive or by a public body according to law, even if the decision does not otherwise involve an actionable wrong. A state-owned enterprise is registered under the Companies Act 1955, it is accountable to shareholders and carries on commercial activities. The power of the Corporation to determine the contractual arrangements was derived from contract and not from statute...
The state-owned enterprise is a public body; its shares are held by ministers who are responsible to the House of Representatives and accountable to the electorate. The Corporation carries on its business in the interests of the public. Decisions made in the public interest by the Corporation, a body established by statute, may adversely affect the rights and liabilities of private individuals without affording them any redress. Their Lordships take the view that in these circumstances, the decisions of the Corporation are in principle amenable to judicial review... under the common law.[166]
  1. In The State of Victoria v The Master Builders’ Association of Victoria,[167] the Victorian Government acting under prerogative power established a task force to deal with collusive practices in the building industry. The task force sent to building contractors a letter enclosing a statutory declaration denying involvement in collusive practices and indicating that it was intended that government agencies not deal with contractors who did not respond satisfactorily. The task force subsequently published to government agencies a blacklist of such contractors. The MBA brought judicial review proceedings challenging the decision and conduct of the task force on various grounds. The Victorian government contended that the task force’s decision and conduct was not amenable to judicial review because, inter alia, the government was not exercising any executive power but merely exercising the capacity of any juristic person to determine with whom and on what conditions it will enter into contracts. Tadgell J held that the compilation and publication of the black list was the result of a decision made in exercise of public power and performance of a public duty.[168] Ormiston J said:
...there would be, and is, no good reason for denying citizens a right to claim that the acts of the executive arm of government, and in particular the acts of government officials acting on behalf of the executive, were ultra vires or otherwise illegal. Merely because the Crown in right of the state has effectively the powers and rights of any citizen does not mean that it cannot be prevented from pretending to assert an authority which it does not have any exercise of those powers, or rights.[169]

and Eames J said:

In so far as it is necessary to identify a public law element in the decision of the task force, as contrasted with a decision relating to merely private affairs as between contractors, then the task involves, in my opinion, a comprehensive analysis of the nature of the power being exercised, the characteristics of the body making the decision, and the effect of determining that the exercise of the power is not amenable to review. The source of the power would also remain a relevant, but not determinative, factor to be considered...
In my opinion, there is a clear public law basis, either in the nature of the power, or as to the consequences of its exercise, as would, in the present case, meet the requirement of there being a public law factor which was identified in CCSU. It would be unrealistic to pretend that the actions of the executive in this case, through administrative agencies of the state, concerned merely private functions akin to those which might be exercised by any citizen. The integrity, and efficiency, of the building industry is plainly a matter of immense public importance.[170]
  1. In CO Williams Construction Ltd v Blackburn & Anor,[171] the Barbados Cabinet made a decision to accept the higher of two tenders for the performance of highway works. The lower tenderer brought judicial review proceedings challenging the decision on various grounds. The Privy Council held that the decision was amenable to review. Lord Bridge (Lords Keith, Oliver, Lloyd and Nicholls agreeing) said:
when the cabinet exercises a specific statutory function which, had it been conferred on a minister instead of the cabinet, would unquestionably have been subject to judicial review, their Lordships can see no reason in principle why the cabinet’s exercise of the function should not be subject to judicial review to the same extent and on the same grounds as the minister’s would have been.[172]
  1. In MBA Land Holdings Pty Ltd v Gungahlin Development Authority & Ors,[173] the Development Authority called for tenders to develop certain land. MBA offered $6.41 million (inclusive of GST) to lease the land. A competitor offered $5.7 million, but was permitted by the Development Authority to increase its offer to $6.08 million (inclusive of GST). The Development Authority accepted the lower bid. Higgins J held that the decision was amenable to judicial review at common law. Higgins J said:
Does the activity and function of the GDA involve a public law element? Clearly, if the function being exercised was merely that of selling vacant land for commercial development, it would be difficult to perceive any “public law factor”.
There is no doubt that the GDA exercises the powers of and acts as the alter ego of the government, that is, the Crown in right of the Territory represented by the Executive. It is subject to ministerial direction (s 11 of the GDA Act). The GDA is directed by s 6 of the GDA Act:
“... to ensure that the Gungahlin Central Area is developed in accordance with the principles and policies for the area set out in the Territory Plan in order to provide for the social and economic needs of the community.”
That provision is supplemented by s 7(2) of the GDA Act. Only one of the performance requirements of the GDA (s 7(2)(b)) is that it should act in accordance with “prudent commercial principles”.
It is apparent from the GDA’s reasons for its decision to choose Landco that it was not driven by “prudent commercial principles” alone. It was concerned to produce the best result for the community in terms of social infrastructure and amenity. That included addressing environmental issues, such as solar power use and tree preservation. The GDA is obliged by the GDA Act to perform its functions in a manner which advances the interests of the public.
That the function being performed in the public interest was that of determining to enter into a contract for the development of Territory Land does not seem to me to remove the purported exercise of that function from the scope of judicial review. It is beyond doubt that, in exercising any power or function conferred upon it by the GDA Act, the GDA’s decisions made under that enactment would be subject to judicial review. It does not, in my view, take that decision-making process out of the scope of judicial review merely because the decision involves the creation of contractual obligations rather than the making of a decision “under an enactment”.[174]
  1. While recognising that in principle different grounds of challenge might give rise to different issues as to amenability to review, the defendants put the submission that none of the decisions in the present case are amenable to review because of their commercial character regardless of the specific ground of challenge. The defendants contend that the decisions in The State of Victoria v The Master Builders Association of Victoria[175] and MBA Land Holdings Pty Ltd v Gungahlin Development Authority[176] are distinguishable because the ground of challenge in those cases was lack of procedural fairness. However, while no other grounds of challenge ultimately succeeded on the merits, there were wide-ranging grounds of challenge in each case and in each case the court held that the decision was amenable to review on all grounds. The defendants contend that MBA Land Holdings Pty Ltd v Gungahlin Development Authority[177] was wrongly decided. However, it accords with the earlier authorities cited.
  2. By reason of the provisions of the Act and the Regulations, the Authority is under a duty to act in the public interest. This is apparent from the definition of the Authority’s functions in regulation 6(1) of the Regulations as extracted at [25] above. For example, its first function is to “initiate, undertake, support and promote the development of land and housing in the public interest” and its third function is to “acquire, hold, manage, lease and dispose of land” particularly with a view to reducing social disadvantage within the community and managing the orderly development of areas through the management and release of land, including areas of undeveloped or underdeveloped land. In this respect, its functions are remarkably similar to those of the Development Authority in MBA Land Holdings Pty Ltd v Gungahlin Development Authority[178]. It is evident from section 11 of the Public Corporations Act that the Authority is required to have regard to these public interest functions as well as to commerciality in performing its operations. Speaking generally, and before turning to the specific grounds of challenge, this action raises public law matters.
  3. I consider separately each ground of challenge to the Contract Decision. The first ground is that no person with power or authority on behalf of the Authority made a decision to enter into the Contract, the Chief Executive’s execution of the Contract was unauthorised and the Contract is thereby void. The Contract involves the potential disposition of 40 percent of the Authority’s total land holdings in South Australia for tens of millions of dollars in respect of land that is regarded as of vital strategic importance. The delegation of functions and powers by the Authority is explicitly governed by section 19 of the Act. The question whether any person with power or authority entered into a contract for the potential disposition of the Land is quintessentially a matter of public interest involving public rights and duties. The Contract Decision is amenable to judicial review on this ground.
  4. The second ground of challenge is that the decision to enter into the Contract was made in breach of section 11 of the Public Corporations Act and, as a matter of statutory construction, that decision is void. Section 11 imposes on statutory corporations a public duty to act as required by the section. If it is assumed that the Authority acted in contravention of section 11 and that the decision to enter into the Contract was thereby void, this ground of challenge raises matters of public interest involving public rights and duties. The decision directly gave rise to execution of the Contract. It is amenable to judicial review on this ground.
  5. The third ground of challenge is that the decision to enter into the Contract was made in breach of section 11 of the Public Corporations Act and, as a matter of statutory construction, that decision was unlawful. Section 11 imposes on statutory corporations a public duty to act as required by the section. If it be assumed that the Authority acted in contravention of section 11 and that the decision to enter into the Contract was unlawful, this ground of challenge raises matters of public interest involving public rights and duties. While it is a different question whether, the Contract having been executed by all parties, it is now too late for the plaintiffs to seek injunctive relief, the Contract Decision is amenable to judicial review on this ground.
  6. The fourth and fifth grounds of challenge are that the decision to enter into the Contract was unreasonable in the Wednesbury sense or made without taking into account a mandatory relevant consideration. These grounds ultimately rely on section 11 of the Public Corporations Act in conjunction with provisions of and implications drawn from the Act. Nevertheless, it is necessary to draw a distinction between ordinary commercial operations of the Authority and operations required to be conducted in the public interest giving rise to public law obligations. For the reasons given at [283] above, the decision of the Authority to dispose potentially of the Land is in stark contrast to the decision of the Council to terminate a contractual licence in Khuu & Lee Pty Ltd v Corporation of the City of Adelaide.[179] In that case, the Council was carrying on an ordinary commercial activity of conducting a market being an activity likened by the Full Court to operating a private shopping centre. The Contract Decision is amenable to judicial review on these grounds.

The nature of the Contract Decision

  1. As will appear in Part F below, the parties are in dispute as to who, if anyone, made the Contract Decision. The first and second defendants contend that the substantive decision to enter into the Contract was made by Cabinet or alternatively the Minister for Urban Development. The third defendant supports these contentions but contends in the alternative that the Chief Executive made the substantive decision. The plaintiffs contend that Cabinet and only Cabinet purported to make the substantive decision but it had no power to do so.
  2. Whether the substantive decision to enter into the Contract was made by Cabinet or the Minister or the Chief Executive, it is amenable to review for the reasons given above.
  3. The plaintiffs contend that, under the terms of the Board’s delegation, the Minister was required to give in principle approval for the Chief Executive to enter into the Contract. While the plaintiffs contend that the Minister made no decision at all and, if it be held that the Minister made the substantive decision to enter into the Contract, they challenge it on the three substantive grounds of review, they do not so challenge the Minister’s decision if it be found that he made a decision confined to approval in principle. The question whether an approval in principle is amenable to review therefore does not arise for decision.

The MSD Decision

  1. The defendants do not seek to distinguish the amenability to review of the MSD Decision from the amenability to review of the Contract Decision. They treat its amenability to review as being dependent on the amenability to review of the Contract Decision.
  2. The role of the Minister for State Development under the Contract is a very limited one. The Contract creates rights and obligations as between the Authority and ACP. It is the Authority which grants the options and the Authority which agrees to sell portions of the Land upon exercise of the options. The only obligation undertaken by the Minister for State Development is under clauses 5.4.2 and 5.4.3 of the Contract, upon receipt of a request by ACP for assistance to promote the project to potential investors or users, to form an opinion whether such promotion is appropriate to the activities of government and, if so, provide that assistance. The only other substantive reference to the Minister for State Development is in clause 2.7.2 which entitles the Minister to give to ACP a PoSS Notice, prima facie deems a project to be a Project of State significance.
  3. Given the very limited role of the Minister for State Development under the Contract, for reasons which will become apparent it is not necessary to decide whether his decision to enter into the Contract is amenable to review.

The Advice Decision

  1. The defendants contend that the Advice Decision is not amenable to review in any event because it was merely recommendatory and was not required to be taken into account by the ultimate decision-maker.
  2. In Hot Holdings Pty Ltd v Creasy,[180] Brennan CJ, Gaudron and Gummow JJ said:
In Ainsworth the Court reiterated the function of certiorari. In the joint judgment of Mason CJ, Dawson, Toohey and Gaudron JJ it was said:
"The function of certiorari is to quash the legal effect or the legal consequences of the decision or order under review."
Brennan J spoke to similar effect as follows:
"Quashing annihilates the legal effect of an act or decision that has been reached in breach of a condition of its validity but, if an act or decision has no legal effect, there is nothing to quash."
Thus, for certiorari to issue, it must be possible to identify a decision which has a discernible or apparent legal effect upon rights. It is that legal effect which may be removed for quashing.

This formulation encompasses two broadly typical situations where the requirement of legal effect is in issue:
(1) where the decision under challenge is the ultimate decision in the decision-making process and the question is whether that ultimate decision sufficiently "affects rights" in a legal sense;
(2) where the ultimate decision to be made undoubtedly affects legal rights but the question is whether a decision made at a preliminary or recommendatory stage of the decision-making process sufficiently "determines" or is connected with that decision.

... In the second situation, the question becomes whether the stage of the process under challenge has the necessary effect on the final or ultimate decision....

The distinction between the two situations we have described may be highlighted by reference to a passage in the joint judgment in Ainsworth ...Their Honours said:
"The report made and delivered by the Commission has, of itself, no legal effect and carries no legal consequences, whether direct or indirect. It is different when a report or recommendation operates as a precondition or as a bar to a course of action, or as a step in a process capable of altering rights, interests or liabilities."
...

The applicant in ACTU-Solo Enterprises sought an order nisi for certiorari to quash, on various grounds, the report of a Royal Commission. The Royal Commission had been appointed to inquire into the production by refining, the marketing, and the pricing in Australia of petroleum products...
Stephen J concluded that this requirement was not satisfied:
"Whatever may be the tenor of the Commission's report, it will not legally affect the rights of the applicant; with or without such a report, and even, no doubt, in direct opposition to any recommendations in it, the Minister might, in his absolute discretion, take action affecting the applicant's crude oil entitlements, or might decide to take no action at all. Accordingly the nature of the Commission's report neither directly affects nor in any way subjects to a new hazard the rights of the applicant; the hazard of Ministerial intervention has always been present and it is only the degree of likelihood of that intervention occurring in a sense adverse to the applicant's interests which is increased by the actual nature of the Commission's recommendation."
...

A preliminary decision or recommendation, if it is one to which regard must be paid by the final decision-maker, will have the requisite legal effect upon rights to attract certiorari.[181]
(Footnotes omitted)
  1. Assuming that the Contract Decision was made by a person to whom power or authority to make it had been delegated, that person had no obligation to take into account the Board’s advice on the three questions addressed in the fourth Board Paper. The decision by the Board to give that advice had no legal consequence. That decision is not amenable to review.

PART F: AUTHORITY TO ENTER INTO CONTRACT

  1. The third issue to be determined is whether the person[182] who purported to make the Contract Decision and the person who purportedly executed the Contract were authorised by the Authority to do so.
  2. This issue encompasses four questions:
    1. Who had power or authority[183] to decide on behalf of the Authority to enter into the Contract and to execute the Contract on behalf of the Authority?
    2. Who made the decision on behalf of the Authority to enter into the Contract?
    3. If the Contract was executed without authority, was it subsequently ratified by the Authority?
    4. If the Contract was executed without actual authority, did the Chief Executive have ostensible authority to enter into it?
  3. It is common ground that the Board did not itself decide to enter into or execute the Contract.
  4. The plaintiffs contend that no one having power or authority to do so made a decision to enter into the Contract and that the Chief Executive executed the Contract without power or authority to do so, resulting in the Contract being void.
  5. The defendants’ primary case is that:
    1. the Board delegated power to Cabinet in terms encompassing a substantive decision by Cabinet to enter into the Contract, being a general standing delegation to Cabinet contained in the Instrument of Delegation of 26 August 2013 or alternatively a specific delegation made on 29 November 2013;
    2. Cabinet made the substantive decision to enter into the Contract pursuant to that delegation; and
    3. the Chief Executive executed the Contract merely in implementation of Cabinet’s decision, his role being essentially ministerial confined to verifying that the terms of the Contract did not diverge from the essential characteristics of the transaction approved by Cabinet and then formally executing the Contract.
  6. The plaintiffs deny that the standing delegation to Cabinet had any application to entry into the Contract. Alternatively Cabinet’s role was confined to granting pre-authorisation enabling the Authority to make its own substantive decision whether to enter into the Contract. The plaintiffs deny the existence of the specific delegation alleged by the defendants.
  7. In the alternative to their primary case, the defendants’ secondary case is that:
    1. the Board delegated power to the Minister for Urban Development in terms encompassing a decision by the Minister to enter into the Contract, being a general standing delegation contained in the Instrument of Delegation of 26 August 2013;
    2. the Minister made the substantive decision to enter into the Contract pursuant to that delegation; and
    3. the Chief Executive executed the Contract merely in implementation of the Minister’s decision, his role being essentially ministerial confined to verifying that the terms of the Contract did not diverge from the essential characteristics of the transaction approved by the Minister and then formally executing the Contract.
  8. The plaintiffs contend that the standing delegation was to the Chief Executive subject only to his obtaining approval in principle from the Minister enabling the Chief Executive to make his own substantive decision whether to enter into the Contract. The plaintiffs deny that the Minister in fact made any decision of his own to enter into the Contract or to grant approval in principle enabling the Authority to do so and contend that the Minister proceeded in the mistaken belief that Cabinet had made the relevant decision under delegation to it.
  9. In the alternative to the defendants’ primary and secondary cases, the third defendant’s case[184] is that:
    1. the Chief Executive had a general implied authority to enter into contracts which encompassed a substantive decision by the Chief Executive to enter into the Contract; or
    2. alternatively, the Chief Executive had authority to make a substantive decision to enter into the Contract pursuant to the Power of Attorney; and
    3. the Chief Executive in fact made a substantive decision to enter into the Contract.
  10. In the further alternative, the third defendant’s case[185] is that:
    1. by its defence to this action, the Authority has ratified the Contract; or
    2. alternatively, the Chief Executive had ostensible authority to enter into the Contract.
  11. The plaintiffs take issue with each of these contentions.

Who had authority?

  1. The defendants contend that:
    1. the Authority delegated a general standing power to Cabinet in the Instrument of Delegation of 26 August 2013 which on its proper construction authorised Cabinet to make the substantive decision on behalf of the Authority to enter into the Contract;
    2. alternatively, the Authority delegated specific power to Cabinet on 29 November 2013 to make the substantive decision whether to enter into the Contract;
    3. alternatively, the Authority delegated a general standing power to the Minister for Urban Development in the Instrument of Delegation of 26 August 2013 which on its proper construction authorised the Minister to make the substantive decision on behalf of the Authority to enter into the Contract;
    4. alternatively, the third defendant contends that the Chief Executive had a general implied authority to enter into contracts which encompassed making the substantive decision to enter into the Contract;
    5. alternatively, the third defendant contends that the Chief Executive had authority pursuant to the Power of Attorney which encompassed making the substantive decision to enter into the Contract.
  2. I hold that the question of the existence and terms of the grant of power or authority by the Board to others is to be determined on an objective basis by reference to the objective facts. The internal intention or state of mind of members of the Board is irrelevant. If the question of authority is to be determined in accordance with private law, this is in accordance with the general approach of the law of contract.[186] If the question of power is to be determined in accordance with public law, the rationale for the approach of private law applies a fortiori.

Delegation to Cabinet on 26 August 2013

  1. The plaintiffs’ case is that the decision to enter into the Contract did not fall within the scope of the delegation to Cabinet made by the Board by the Instrument of Delegation which required Treasurer’s Instruction (TI) 8 pre-authorisation when the purchase or contract consideration was $10 million[187] or more. The defendants’ primary contention is that the substantive decision to enter into the Contract was made by Cabinet pursuant to that delegation.
  2. The operative provisions of the Instrument of Delegation were as follows:
... the Board by this instrument delegates to nominated employees/positions of the Urban Renewal Authority trading as Renewal SA and other individuals the rights to:
in the manner and to the extent, and subject to the conditions set out in the attached Delegation and Authorisation Schedule and Delegation and Authorisation Guidelines.
  1. The Delegation and Authorisation Schedule (the Delegation Schedule) contained several tables. One table was entitled Contracting Delegations (the Contracting Delegations Table) and provided as follows:
Delegates
TI 8 contract pre authorisation (GST Inclusive)
Contract execution delegation (GST Inclusive)
Delegation to approve contingency amounts in respect of a contract (GST Inclusive)
TI 8 financial contract variation pre authorisation (GST Inclusive)
Notices under Contracts
Cabinet
$11,000,000 and over (including Office Accommodation)
Over $4,400,000 for the purchase of land only
Yes
Yes
Minister for Housing and Urban Development
Up to (but not including) $11,000,000 (other than in relation to Office Accommodation Projects)
Yes
Yes
Yes subject to 5% TI 8 rules
Yes
Minister for Transport and Infrastructure
$1,100,000 up to (but not including) $11,000,000 (Only in relation to Office Accommodation)
Yes
Yes
Yes subject to 5% TI 8 rules
Yes
Urban Renewal Authority Board of Management
Up to (but not including) $1,100,000
Yes
Yes
Yes subject to 5% TI 8 rules
Yes
Chief Executive
Up to (but not including) $1,100,000
Yes
Yes
Yes subject to 5% TI 8 rules
Yes
Chief Executive – Department of Planning, Transport and Infrastructure (or nominated delegate)
Up to (but not including) $1,100,000 for Office Accommodation only
Yes
Yes
Yes subject to 5% TI 8 rules
Yes
General Manager
Up to (but not including) $550,000
Yes
Yes
Yes subject to 5% TI 8 rules
Yes
Executive Director
Up to (but not including) $110,000
Yes
Yes
Yes subject to 5% TI 8 rules
Yes
Director (Major & Residential Project Delivery)
Up to (but not including) $110,000
Yes
Yes
Yes subject to 5% TI 8 rules
Yes
Project Director (Major & Residential Project Delivery)
Up to (but not including) $55,000
Yes
Yes
Yes subject to TI 8 rules
Yes
Director
Up to (but not including) $11,000
Yes
Yes
Yes subject to 5%TI 8 rules
Yes
Development Manager (Major & Residential Project Delivery)
Up to (but not including) $11,000
Yes
Yes
Yes subject to 5% TI 8 rules
Yes
  1. The Delegation and Authorisation Guidelines (the Delegation Guidelines) included the following provisions:
2. GUIDELINE STATEMENT
The purpose of these guidelines is to provide clarity and guidance to Urban Renewal Authority trading as Renewal SA (‘Renewal SA’) employees, including executive employees’ and the Chief Executive (individually and collectively called ‘Renewal SA Officers’) concerning Renewal SA’s Delegation and Authorisation Schedule (‘DAS’).
...
4. OBJECTIVES
The objective of this guideline is to ensure and maintain a consistent and clear understanding and exercise by Renewal SA Officers and other nominated individuals of delegations provided to them by the Board of Management.
  1. GENERAL DELEGATION AND AUTHORISATION. GUIDELINE DETAILS
5.1 General
5.1.1 Context of Delegations
All delegations contained within the DAS are to be read in conjunction with, and subject to, any relevant legislative/regulatory requirements and applicable South Australian government requirements (including but not limited to Treasurer’s Instructions (particularly 5, 8, and 17)).
All delegations contained within the DAS are to be exercised within Renewal SA’s framework of other approved policy/procedure documents, business plan and budgets.

...

  1. SPECIFIC DELEGATION AND AUTHORISATION GUIDELINE DETAILS
...
This guideline provides guidance in respect of each of the delegations included in the above categories contained within the DAS.
6.1 Contracting
The delegations and authorisations contained within this category are broken down as follows:
1. Treasurer’s Instruction 8 contract pre-authorisation;
2. Contract execution delegation;
3. Delegation to approve contingency amounts in respect of a contract;
4. Treasurer’s Instruction 8 financial contract variation pre authorisation;
5. Notices under contracts.
An explanation of each delegation and authorisation is as follows:
  1. This authorisation allows delegates to approve the entering into of contracts (as defined in Treasurer’s Instruction 8 Financial Authorisations (which for the avoidance of doubt includes deeds and undertakings with local/state/federal government and private organisations and land purchase contracts but does not include employment contracts)). The authorisation must be evidenced in writing and be placed on the relevant file.
  2. This delegation allows delegates to sign contractual documentation (including contract variation instruments, as defined in Treasurer’s Instruction 8 Financial Authorisations contract definition (which includes memorandum of the administrative arrangements or similar). This does not include instruments which are deeds and must be signed pursuant to a Renewal SA power of attorney (refer section 6.8)) after a Treasurer’s Instruction 8 contract pre-authorisation has been granted in respect of the given contract (if the contract involves any expenditure, or potential expenditure by Renewal SA). ...
  3. Both the Delegation Schedule and the Delegation Guidelines referred to Treasurer’s Instruction 8, which contained the following provisions:
Scope
8.1 This instruction applies to:
8.1.1 all public authorities unless otherwise stated;
8.1.2 any dealing whereby a public authority enters into a contract involving expenditure or potential expenditure, including purchases of goods and services, provision of grant funding, or lease or rental of property, plant or equipment (including intangible property); and
8.1.3 any payment made by a public authority.
Objective
8.2 To establish a governance regime to apply to all public authorities such that prior approval is required, by a person authorised pursuant to this instruction, before the public authority can:
8.2.1 incur expenditure through contractual arrangements, including purchases;
8.2.2 enter into an agreement with the potential to lead to expenditure; and
8.2.3 make a payment or disbursement.
Interpretation and Definitions
...
8.5 For the purposes of this instruction:

8.5.1 “financial authorisation” means the approval given by Cabinet, a Minister, a governing authority, Chief Executive or nominated employee for a public authority to enter into a contract, including a purchase, subject to the authority’s procurement policies, or to make a payment or disbursement, including a payment between public authorities, up to a specified monetary limit.

...

8.5.3 a “contract authorisation” is a financial authorisation that relates to the approval for a public authority to enter into a contract, including for the purchase of goods and services, subject to the public authorities procurement policies. ...

8.5.4 a “payment authorisation” is a financial authorisation that relates to the approval of a public authority making a payment or disbursement, including through a direct debit arrangement.

8.5.5 a “contract” refers to an arrangement, including for the purchase of goods and services, whereby a public authority commits to or incurs expenditure, or where there is the potential for expenditure to be incurred, where the terms and conditions are contained in a document signed by the parties, or where the terms and conditions are recorded in some other document or documents such as a purchase order or an exchange of letters, or terms and conditions are agreed in an oral exchange...

8.5.6 “incurs expenditure” refers to a dealing which results, or will result, in an obligation on the public authority, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. Economic benefits can take various forms, such as payment of cash, transfer of assets, provision of services, replacement of an obligation with another obligation for the conversion of the obligation to equity.

...

General

8.10 Instances may arise where a contract and payment authorisation may be provided by the same employee, possibly at the same time. In these instances it is necessary for the employee to be empowered to provide both types of authorisations.

...

Contracts (including purchases)

8.11.1 Unless the public authority’s enabling legislation has alternative specific arrangements that are inconsistent with this clause, a contract, including from the purchase of goods and services, can only be executed if approved as follows:


Purchase or Contract consideration
To be approved by
< $1,100,000
  • Cabinet, or
  • the Minister; or
  • the Chief Executive or governing authority; or
  • an employee nominated by a Chief Executive or governing authority; or
  • an employee nominated by an authorised employee pursuant to clause 8.11.2.
$1,100,000 to < $11,000,000
  • Cabinet, or
  • the Minister; or
  • an employee nominated by the Minister in writing by specific Ministerial delegation that specifies the employee, the amount and the nature of the contract including the parties.
$11,000,000 and over
Cabinet.
...
8.13 In addition to any other requirement:
8.13.1 Cabinet approval must be obtained for a contract for the purchase of land where the expenditure involved exceeds $4,400,000 ...
...
Payments and disbursements
8.15 Unless the public authority’s enabling legislation has alternative specific arrangements that are inconsistent with this clause, a payment or disbursement can only be made with the prior approval of an employee where the employee is empowered as follows:
8.15.1 by an instrument in writing;
8.15.2 specifying the employee, or the position (subject to clause 8.8.3), monetary limits (consistent with clauses 8.16 and 8.17) and other conditions, determined as follows:

public authority
to be determined by
administrative unit
  • the Minister, or
  • any employee nominated by the Minister, or
  • any employee nominated by a Chief Executive, where the Minister has authorised the Chief Executive to grant payment authorisations
public authority that is not an administrative unit
  • the Minister, or
  • any employee or governing authority nominated by the Minister, or
  • any employee nominated by a Chief Executive or governing authority, where the Minister has authorised the Chief Executive or governing authority to grant payment authorisations

  1. The Instrument of Delegation refers to and incorporates both the Delegation Schedule and the Delegation Guidelines. The Delegation Guidelines cross-refer to the Delegation Schedule. Each cross-refers to Treasurer’s Instruction 8. It is therefore necessary to construe the Delegation Schedule and the Delegation Guidelines together and to construe both by reference to and harmoniously with Treasurer’s Instruction 8. The delegations are effected by the Delegation Schedule and not by the Delegation Guidelines; nevertheless the two documents are to be construed in pari materia.

Contracts for sale of land

  1. The plaintiffs contend that, on its proper construction, Treasurer’s Instruction 8 encompasses transactions by public authorities acquiring property or services for monetary or non-monetary consideration, but does not extend to transactions by public authorities selling property or services for monetary consideration.
  2. The defendants contend that a contract for the sale of land by a public authority falls within the definition of contract in clause 8.5.5 of Treasurer’s Instruction 8 because under such a contract the public authority commits to or incurs expenditure within the meaning of clause 8.5.6 this is because settlement of the obligation by the public authority to convey the land to the purchaser results in an outflow from the public authority of resources embodying economic benefits, namely transfer of an asset.
  3. I reject the defendants’ contention. It is evident from clauses 8.1 and 8.2 of Treasurer’s Instruction 8 that the object and purpose of the Instruction is to control the incurring and discharge of obligations by public authorities to pay out public monies for the acquisition of property or services or by way of grant. The entire focus of the Instruction is on the outflow, and not the inflow, of public monies. Because there can be an effective outflow of public monies in the form not only of cash but also non-monetary benefits such as the provision of services or transfer of assets, the definition of incurs expenditure in clause 8.5.6 is broadened to capture such other non-monetary benefits. However, this does not change or detract from the object or purpose of the Instruction as a whole being to control the outflow, and not the inflow, of public monies.
  4. This is reinforced by the use of the word financial in the central concept of financial authorisation. The Instruction uses this term as the genus of the subject matter to which it applies. That genus has two species: a contract authorisation and a payment authorisation. The contract authorisation relates to the first stage at which the public authority incurs an obligation to pay under a contract. The payment authorisation relates to the second stage at which the public authority discharges that obligation by making payment and also to a single stage at which the public authority makes a payment otherwise than pursuant to an antecedent contractual obligation. The close interrelationship between contract and payment authorisation is confirmed by clause 8.10 which contemplates both being provided at the same time by the same person.
  5. It is also the intention of the Instruction to control the making of grants of public monies by public authorities. In that case, there will not usually be a contract or contract authorisation but there will be a payment authorisation. The fact that the definition of payment authorisation refers to making a payment or disbursement and does not utilise the phrase incur expenditure with its extended definition is a further indicator that the Instruction addresses the inflow, and not the outflow, of public monies.
  6. It is significant that the examples given in clause 8.1.2 of a contract involving expenditure are the purchase of goods and services; the lease or rental of property, plant or equipment; and the provision of grant funding. It is clear from the various references to purchases throughout clauses 8.5.1, 8.5.3, 8.5.5, 8.11.1 and 8.13.1 that a purchase is the paradigm transaction contemplated by the Instruction. Clause 8.13.1 provides explicitly for a contract for the purchase of land but neither that provision nor any other provision in the Instruction refers to a contract for the sale of land or indeed for the sale of other property or services.
  7. The definitions of financial authorisation and contract authorisation both refer to a public authority entering into a contract “subject to the public authority’s procurement policies”. This reinforces the conclusion that the Instruction is concerned with the procurement of property and services and not their sale.
  8. The defendants’ reliance upon the reference in the definition of “incurs expenditure” to an outflow of economic benefits (whether in the form of cash, transfer of assets, provision of services or otherwise) focuses attention on only one side of the transaction. It ignores what is apparent from the operative clauses 8.11 and 8.15, the scope and objective clauses 8.1 and 8.2 and the definitions of financial, contract and payment authorisations in clause 8.5 that, insofar as the Instruction is concerned with contracts, it is concerned with contracts for the acquisition of property or services and not their sale.
  9. If the defendants’ construction were correct, the Instruction would apply to every type of transaction entered into by a public authority encompassing transactions involving the inflow or outflow of economic benefits in any form. If that had been the intention, the Instruction’s scope and objective in clauses 8.1 and 8.2 would have been worded very differently, as would its operative provisions in clauses 8.11 and 8.15 and its definitional provisions in clause 8.5. It is evident that this was not the intention of the Instruction.
  10. Turning to the Instrument of Delegation, it is clear from the structure and content of the Contracting Delegations Table in the Delegations Schedule and the other tables that the words contract and TI 8 contract in the headings of the Table refer to and are confined to contracts within the meaning of Treasurer’s Instruction 8. A contract for the sale of land for monetary consideration is not a contract within the meaning of the Contracting Delegations Table. There is only a delegation to Cabinet in respect of a contract within the meaning of Treasurer’s Instruction 8.
  11. This conclusion is reinforced by the structure of the Contracting Delegations Table, which adopts money levels that mirror the money levels contained in the table in clause 8.11.1 of Treasurer’s Instruction 8 (the TI 8.11 Table). The TI 8.11 Table in conjunction with clause 8.13.2.2 requires prior approval of Cabinet to enter into a relevant contract for consideration of $10 million or more, prior approval of the responsible Minister or his or her delegate to enter into a relevant contract for consideration of $1 million or more and prior approval of the Minister for Transport and Infrastructure or his or her delegate in respect of office accommodation for consideration of $1 million or more. The same persons or entities and the same dollar limits appear in the Contracting Delegations Table.
  12. This conclusion is reinforced by the distinction made in the Property Delegations Table between a contract concerning the disposal of land and a contract concerning the acquisition of land. That Table requires Cabinet approval “under TI 8” in respect of a contract concerning the acquisition of land for more than $4 million[188] and is thereby in compliance with clause 8.13.1 of Treasurer’s Instruction 8. By contrast, that Table provides for approval of a contract concerning the disposal of land by the Minister when the consideration exceeds $4 million.[189] The Table makes no provision for approval by Cabinet and gives no delegation to Cabinet at all in respect of contracts concerning the disposal of land, including contracts where the consideration exceeds $10 million. There is no reference to Treasurer’s Instruction 8 in respect of contracts concerning the disposal of land. On the defendants’ construction, the Property Delegations Table is inconsistent with the Contracting Delegations Table for this reason. This strongly reinforces the conclusion that the Contracting Delegations Table does not apply to contracts for the sale of land.
  13. This conclusion is also reinforced by the reference in clause 6.1 of the Delegation Guidelines to Treasurer’s Instruction 8 contract pre-authorisation in the Contracting Delegations Table allowing “delegates to approve the entering into of contracts (as defined in Treasurer’s Instruction 8 Financial Authorisations)”.
  14. On the proper construction of the Instrument of Delegation, the Board did not delegate to Cabinet any power in respect of a decision to enter into a contract for the sale of the Land.

Pre-authorisation

  1. The plaintiffs contend in the alternative that the Contracting Delegations Table only delegated to Cabinet the function of granting pre-authorisation to the Authority to contract for the sale of land, leaving the Authority itself to make the substantive decision whether to enter into the contract. I assume for the purpose of considering this submission that, contrary to my conclusion reached above, the Contract is a contract within the meaning and for the purpose of the Contracting Delegations Table.
  2. I begin by considering the proper construction of Treasurer’s Instruction 8. The defendants disclaim any contention that Treasurer’s Instruction 8 applied of its own force to the Contract Decision. Nevertheless, they accept (as do the plaintiffs) that the Contracting Delegations Table in the Instrument of Delegation should be construed consistently with Treasurer’s Instruction 8 because it explicitly incorporates reference to Treasurer’s Instruction 8.
  3. I have concluded that Treasurer’s Instruction 8 requires approval by Cabinet as a pre-condition to a public authority making or implementing its own decision to enter into a relevant contract where the consideration is $10 million or more. An alternative theoretical construction is that the Instruction provides for Cabinet to make the actual decision whether to enter into a relevant contract. Until the final stages of closing addresses, the first and second defendants appeared to advance this construction in the context of the Contracting Delegations and Property Delegations Tables. However by the end of closing addresses, this construction had been repudiated by all parties.
  4. The alternative construction ultimately advanced by the defendants[190] is that Treasurer’s Instruction 8 provides for the decision as a matter of substance to enter into a transaction or contract to be made by Cabinet on behalf of the Authority. Cabinet is required to give the substantive approval, or make the substantive decision to enter into the transaction, which requires Cabinet to approve the substance or essence of the transaction. This leaves some scope to the public authority to decide on the formalities and finer details of the transaction. On the defendants’ construction, the question what constitutes the substance or essence of a transaction in any given case is determined objectively by reference to the transaction. For example, in the case of a contract for the sale of land, the substance or essence of the transaction will usually comprise identification of the land, the purchaser, the reason or reasons for the transaction, the price range and the time frame. Once Cabinet has made the substantive decision to enter into the transaction, the role of the public authority is then to verify that the contract incorporates or reflects the substance or essence of the transaction that was approved by Cabinet, complete the formalities and finer details of the transaction and execute the document.
  5. Clause 8.2 of Treasurer’s Instruction 8 identifies its objective as being to:
establish a governance regime to apply to all public authorities such that prior approval is required, by a person authorised pursuant to this instruction, before the public authority can:
8.2.1 incur expenditure through contractual arrangements, including purchases;
8.2.2 enter into an agreement with the potential to lead to expenditure; and
8.2.3 make a payment or disbursement.
  1. The reference to the grant of prior approval before the public authority can incur the expenditure, enter into the contract or agreement or make the payment suggests that the approval required is logically anterior to and separate from the authority’s own decision to so act. This is reinforced by use of the word can and the reference to a governance regime which suggests the superimposition onto the authority’s own decision-making of an additional layer of governance as a pre-condition to the authority’s own decision-making.
  2. The definitions in clause 8.5 of financial authorisation and contract authorisation refer to approval for a public authority to enter into a contract. This connotes that it is the public authority making the decision to enter into the contract rather than the person whose approval is required as a pre-condition to the authority making that decision.
  3. The evident purpose of clause 8.11 of Treasurer’s Instruction 8 is to prevent public authorities making decisions to enter into relevant contracts agreeing to pay $10 million or more without obtaining the prior approval of Cabinet or to pay $1 million or more without obtaining the prior approval of Cabinet or the relevant Minister or Minister’s delegate for this purpose. It is the evident purpose of clause 8.11 to impose a pre-condition upon a public authority making its own decision to enter into a relevant contract. It is not the evident purpose of clause 8.11 to somehow delegate a public authority’s decision-making to Cabinet or the Minister or the Minister’s delegate.[191]
  4. It may be expected that ordinarily Cabinet would only make a high level decision as a matter of principle whether to grant prior approval to a public authority to enter into a relevant transaction. It may be expected that ordinarily a public authority would not seek Cabinet or Ministerial approval to enter into a relevant contract without it first having decided that it wishes to enter into the contract subject to the grant of such approval. These expectations inform the proper construction of Treasurer’s Instruction 8.
  5. It is an unlikely intention to impute to the author of Treasurer’s Instruction 8 that, because prior approval is granted under the Instruction, the public authority is absolved from the important responsibility it would otherwise have to make a prudent decision to enter into the relevant contract.
  6. It is a corollary of the defendants’ construction that, if it is Cabinet that makes the substantive decision to enter into a contract, the public authority would be obliged to execute the contract provided that it first verifies that it incorporates or reflects the substance or essence of the transaction approved by Cabinet. This does not sit comfortably with the authority being left to decide upon the finer details of the transaction which might result in its not proceeding for non-essential or non-substantial reasons despite Cabinet having decided that it should proceed. The wording and structure of Treasurer’s Instruction 8 suggests that a public authority is not obliged to enter into a transaction merely because Cabinet has granted prior approval. Rather Cabinet’s prior approval is a pre-condition to the public authority entering into the transaction.
  7. The construction advanced by the defendants is a convoluted one likely to give rise to the very real problems of acceptance and attribution of responsibility for making decisions by public authorities. Cabinet or the relevant Minister would not be responsible for the entirety of the decision to enter into a contract because their role would be confined to the substance or essence of the transaction. The board, officers or employees of the public authority would not be responsible for the entirety of the decision either. On the defendants’ construction, their role would be confined to determining that the contract incorporated or reflected the substance or essence of the transaction and assessing the merits of the formalities and finer details of the transaction and not assessing the merits of its substance or essence.
  8. On the defendants’ construction, there would be an obvious risk that no one ultimately assessed or took responsibility for particular aspects of the transaction because Cabinet or the Minister assessed them as non-substantial or non-essential and the Authority assessed them as substantial or essential. Perhaps more importantly, any decision to enter into a transaction is ultimately a holistic one weighing all features whether they might be characterised as substantial or non-substantial or essential or non-essential. In making a decision to enter into a transaction, it is necessary to weigh features regarded as positive from the perspective of the contracting party against features regarded as negative. A contract being negotiated between two parties with conflicting self-interests will always contain a mixture of positive and negative features. It is not possible to quarantine an assessment of the merits of positive and negative features characterised as non-substantial or non-essential without considering the positive and negative features as a whole. It is a very unlikely intention to impute to the author of Treasurer’s Instruction 8 that responsibility for decision-making by public authorities be bifurcated in a manner conducive to the ultimate responsibility falling between two stools.
  9. The plaintiffs’ construction in contrast is simple, elegant, practical, conducive to good public administration and consistent with the wording, structure and evident purpose of Treasurer’s Instruction 8. The construction advanced by the defendants is not tenable.
  10. I conclude that, as a matter of construction, Treasurer’s Instruction 8 requires approval by, on the present hypothesis, Cabinet as a pre-condition to a public authority making or implementing its own decision to enter into a relevant contract.
  11. I turn to the construction of the Instrument of Delegation. As noted above, the Contracting Delegations Table mirrors the TI 8.11 Table in providing for “pre-authorisation” by Cabinet where the relevant consideration is $10 million or more and “pre-authorisation” by the responsible Minister or delegate (or the Minister for Transport and Infrastructure or delegate in respect of office accommodation) where the consideration is $1 million or more. This strongly suggests that, if Treasurer’s Instruction 8 refers to and requires prior approval by the nominated body or person before a public authority can make or implement its own decision to enter into a relevant contract, the Contracting Delegations Table takes the same approach.
  12. The use of the term pre-authorisation in the Contracting Delegations Table suggests that obtaining approval is a pre-condition to, rather than in substitution for, the Authority making or implementing its own decision to enter into the relevant contract.
  13. The first and second defendants contend that, once Cabinet has made the decision, it is the pre-eminent decision-maker and the Authority could not then turn around and decide not to proceed with the transaction. However, if the Contracting Delegations Table leaves to the general staff of the Authority the decision on aspects of the transaction not characterised as going to its substance or essence, they could decide not to proceed with the transaction because of those non-essential terms notwithstanding that Cabinet, ex hypothesis, has made the substantive decision that the Authority enter into the transaction.
  14. Similar considerations arise concerning bifurcation of responsibility, risks of falling between two stools, and unlikelihood that the author - in this case the Board - intended such bifurcation and risks as in respect of Treasurer’s Instruction 8 that I have addressed above.
  15. The construction advanced by the defendants entails that the Contracting and Property Delegations Tables will both apply, but in inconsistent terms, to contracts for the acquisition (and, on the defendants’ construction, the disposal) of property because the delegates differ and their delegation levels differ. This is a very unlikely intention to attribute to the Board.
  16. The plaintiffs’ construction is, in comparison, simple, elegant, practical, conducive to good public administration and consistent with the wording, structure and evident purpose of the Delegation Schedule and Delegation Guidelines. The construction advanced by the defendants is not tenable.
  17. On the proper construction of the Instrument of Delegation, the Contracting Delegations Table in the Delegation Schedule read in conjunction with clause 6.1 of the Delegation Guidelines requires prior approval or pre-authorisation by Cabinet as a pre-condition to the Authority making or implementing its own decision to enter into a relevant contract.

Consideration $10 million or over

  1. The plaintiffs make a further alternative contention that, because the nature of the Contract is to grant an option to purchase for no consideration, the relevant consideration for the purpose of the Contracting Delegations Table is not $10 million or over and therefore entry into the Contract does not fall within the scope of any delegation to Cabinet made on 26 August 2013. I assume for the purpose of considering this submission that, contrary to my conclusions reached above, the Contract is a “contract” within the meaning and for the purposes of the Contracting Delegations Table and that table delegates to Cabinet the role of making the substantive decision to enter into a contract.
  2. I reject this alternative contention by the plaintiffs. The Contract grants to ACP a series of options to purchase portions of the Land. The Stage 1 Option is for the purchase of not less than 150 hectares for $30 per square metre. It is a term of the Contract that, upon exercise of the first option, the Authority and ACP will be deemed to have entered and duly executed a Land Sale Contract on terms set out in the Law Society’s standard form Contract for the Sale and Purchase of Land and the variables set out in Annexures C and D to the Contract (the First Land Sale Contract). The consideration is expressed to be $30 per square metre of the relevant portion of the Land separately identifiable as Stage 1 in the Project Plan and described in the Option Notice. The consideration must necessarily be not less than $45 million. The terms of the First Land Sale Contract comprise all necessary terms to amount to a binding contract for the sale of such land for at least $45 million. By entering into the Contract, the Authority bound itself, on exercise of the Stage 1 Option by ACP, to agree to transfer to ACP or its nominee at least 150 hectares of land for at least $45 million.
  3. Clause 8.1.2 of Treasurer’s Instruction 8 provides that the Instruction applies to, inter alia:
any dealing whereby a public authority enters into a contract involving expenditure or potential expenditure

and clause 8.2.2 provides that the objective of the Instruction is to establish a governance regime such that prior approval is required before a public authority can, inter alia:

enter into an agreement with the potential to lead to expenditure
  1. The references to potential expenditure and the potential to lead to expenditure makes it plain that, if the Instruction would otherwise apply to a contract for the sale of land, it would equally apply to a contract granting an option to purchase that land. It is evident that the Contracting Delegations Table is intended to mirror the TI 8.11 table and should be construed in the same way in respect of options as opposed to firm contracts.
  2. Any other construction of the Contracting Delegations Table would enable the Authority’s officers named in the table (such as the Director, Asset Management) to grant an option to dispose of all of the Authority’s land in South Australia for any amount of consideration without obtaining any higher authority. Such a construction is not tenable.

Delegation to Cabinet 29 November 2013

  1. The defendants contend in the alternative that on 29 November 2013 the Board specifically delegated the decision whether to enter into the Contract to Cabinet.
  2. On 28 November 2013, the fourth Board Paper was sent to five members of the Board.[192] Under the heading Recommendations, the following appeared:
It is recommended that the Board of Management approves:
1. That advice be provided to the Minister for Housing and Urban Development that:
  1. Renewal SA’s landholding at Gillman / Dry Creek, that is the subject of the Adelaide Capital Partners (ACP) unsolicited offer to purchase, has been identified as land appropriate for industrial / commercial development to support employment and growth targets contained in the The 30-Year Plan for Greater Adelaide and as such a resources sector services hub is an appropriate use of the land;
  2. The ACP offer of $45 million (GST exclusive) as their first exercisable option for 150 hectares of land at Gillman / Dry Creek and $77 million (GST exclusive) for their second and third exercisable options for 257 hectares of adjacent land represents a good value offer based upon independent valuation advice and comparable market evidence;
  1. Renewal SA’s consideration of ACP’s unsolicited offer has been managed within existing policy relating to off-market transactions and has been guided by independent probity advice.
It is recommended that the Board of Management notes:
  1. That advice pertaining to whether the ACP proposal meets with the Government’s strategic economic development objectives and gives Government sufficient confidence to proceed with accepting the offer on a preferred basis will be provided by other Government agencies, and ultimately this will be a policy decision of Cabinet.
  2. Four board members sent emails supporting the recommendation, which comprised a Board resolution under clause 3.4.3 of the Authority’s Board of Management Policy.
  3. The defendants contend that the noting by the Board recorded in paragraph 2 under the heading Recommendations referring to a policy decision of Cabinet amounted to a delegation by the Board under section 19 of the Act to Cabinet of the decision whether to enter into the Contract.
  4. Section 19 of the Act provides:
19—Delegations
(1) A board may delegate a function or power conferred on or vested in the board (or its statutory corporation) under this Act—
(a) to a specified person or body; or
(b) to a person occupying a specified office or position.
(2) A delegation—
(a) may be made subject to conditions and limitations specified in the instrument of delegation; and
(b) if the instrument of delegation so provides, may be further delegated by the delegate; and
(c) is revocable at will and does not prevent the board from acting itself in a matter.
  1. The question whether the Board made a delegation under section 19 of the Act by virtue of its acceptance of the recommendation in paragraph 2 is to be determined objectively rather than depending upon the subjective intentions of the various members of the Board. It is common ground that, in construing the Board’s resolution, regard can and should be had to the fourth Board Paper as a whole.[193]
  2. I start by considering only the terms of the Recommendations contained at the end of the fourth Board Paper that were accepted by the Board. The nature and form of paragraph 2 is quite different to that of paragraph 1. By accepting the recommendations in paragraph 1, the Board made an operative resolution to do something, namely to provide the advice to the Minister for Urban Development set out in subparagraphs a, b and c. By contrast, by accepting recommendation 2, the Board merely noted something and did not resolve to do anything. The Board did not resolve to delegate any power or function to Cabinet.
  3. Read as a whole, it is apparent that in paragraphs 1 and 2 reference was being made to five specific questions. In paragraph 1, the first three specific questions were identified and answered. In paragraph 2, two further questions were identified but not answered, namely whether the proposal met with the Government’s strategic economic development objectives and whether the proposal gave Government sufficient confidence to proceed with accepting the offer on a preferred basis, and it was explicitly stated that these questions would be addressed by other Government agencies. According to the wording of paragraph 2, this was merely noted as a fact by the Board. When paragraph 2 went on to note that “this” will be a policy decision of Cabinet, the reference to “this” is to be understood as a reference to these two specific questions as opposed to a decision on behalf the Authority to enter or not to enter into the Contract.
  4. Section 19 of the Act contemplates a formal delegation of powers and functions. It is a very unlikely construction of acceptance by the board members of the recommendations in the fourth Board Paper that they were making a delegation of powers and functions to Cabinet in such an informal manner. This is in stark contrast, for example, with the formality involved in the Instrument of Delegation dated 26 August 2013.
  5. Even if the terms of the Recommendations were to be construed as suggesting that the board members anticipated that Cabinet would make a policy decision whether ACP’s proposal should be accepted, they do not indicate that the board members anticipated that the question whether the Authority should actually enter into the Contract would not come back for a decision by the Authority taking into account Cabinet’s views. Even if they did, and even if the board members mistakenly believed that Cabinet had power under the standing Instrument of Delegation to make the ultimate decision on behalf of the Authority to enter into the Contract, that does not indicate an intention by the Board to confer a specific ad hoc authority upon Cabinet by virtue of accepting the Recommendations contained in the fourth Board Paper.
  6. If the Board had intended to confer a specific ad hoc authority upon Cabinet, it may be expected that the Board would have defined what authority the Board was conferring. The Board would have likely identified whether it was an authority to make an in principle decision on the ACP proposal, leaving it to the Authority to make the ultimate decision or alternatively to make a decision on specific terms and conditions of the transaction and detailed provisions of a contract to implement the transaction. The Board would have likely identified whether it was an authority to Cabinet to give a binding direction to the Chief Executive to execute a contract in whatever terms were determined by Cabinet. The Board would have likely identified whether it was an authority to make some other decision. None of these matters are spelt out in recommendation 2 of the fourth Board Paper. This is explicable by the fact that, objectively considered, the Board was not intending to confer authority by virtue of accepting that recommendation.
  7. These considerations give rise to a fundamental difficulty with the defendants’ contention in any event. Any delegation by the Board under section 19 of the Act requires certainty as to identity of the delegate, the function or power being delegated and the terms of the delegation. The wording of recommendation 2 in the fourth Board Paper does not explicitly or implicitly identify the terms of the delegation, and if objectively a delegation had otherwise been intended, it would have been void for uncertainty.
  8. The defendants’ contention is not tenable. On the face of the recommendations, the Board did not delegate to Cabinet the power to decide on behalf of the Authority to enter into the Contract.
  9. A consideration of the body of the fourth Board Paper supports this conclusion. The purpose of the paper was said to be that the Minister had sought the advice of the Board in relation to the ACP proposal. It did not say that the purpose of the paper was to delegate decision-making authority to the Minister or to Cabinet. Under the heading Discussion, the paper said that the Minister had requested advice on four key issues. The first three issues were addressed in substance and were the subject of corresponding subparagraphs a, b and c of paragraph 1 of the Recommendations. The paper went on to identify the fourth issue and the inability of the Board to provide advice in relation to it in the following terms:
    1. Is the ACP proposal to develop a resources sector services hub to support the expansion of the oil and gas industry credible; does it meet with Government strategic economic development objectives; and does it give Government sufficient confidence to proceed with accepting the offer on a preferred basis?
The Board of Management can provide advice in relation to questions (a), (b) and (c), with other Government agencies, such as DMITRE and the Economic Development Board, responsible for providing advice in relation to question (d).
  1. The second and third elements of the fourth issue were the matters that were the subject of recommendation 2 under which the Board merely noted that advice would be provided on them by other Government agencies and they raised policy issues for Cabinet.
  2. On a consideration of the whole of the fourth Board Paper, the Board did not delegate any power or function to Cabinet by making its resolution of 29 November 2013.
  3. This conclusion renders it unnecessary to consider an alternative contention by the plaintiffs that, on the proper construction of section 19 of the Act, a delegation could only be made by an instrument and that the email responses by four members to the fourth Board Paper did not comprise an instrument for this purpose.

Delegation to the Minister 26 August 2013

  1. I turn to consider the defendants’ secondary contention that the decision to enter into the Contract fell within the scope of a standing delegation to the Minister for Urban Development made by the Board in the Instrument of Delegation by way of delegation to approve a contract concerning the disposal of land where the consideration is more than $4 million.[194] The defendants’ secondary contention is that the substantive decision to enter into the Contract was made by the Minister pursuant to that delegation.
  2. The Delegation Schedule contained a table entitled Property Delegations (the Property Delegations Table) which provided as follows:
DELEGATES
Delegation to execute a contract concerning the disposal of Land (GST Inclusive)
Delegation to execute a contract concerning the acquisition of Land (GST Inclusive)
Authorisation to sign Form 1 Statements and other Statutory Instruments
Authority to grant leases, easements and licences (i.e. where Renewal SA is lessor, licensor etc)
Delegation to approve land sale prices for residential allotments
Delegation to approve land sale prices for industrial allotments
Delegation to approve non-commercial rentals for non-profit organisations
Asset Disposal Authority (not Real Property)
Chief Executive
Over $4,400,000 million (with Minister approval)
Over $4,400,000 million (with Cabinet approval under TI8)
Yes


Yes
Chief Executive
Up to $4,400,000 million
Yes
Yes
Yes
Yes
Yes
Yes
Yes
General Manager, Asset Management
Up to (but not including) $1,100,000 million
Yes
Yes
Yes
Yes

General Manager, Industrial

Yes

Yes

General Manager, Major & Residential Project Delivery
Up to (but not including) $1,100,000 million
Yes
Yes
Yes
Yes

Director, Asset Management


Yes
Yes



Director (Major & Residential Project Delivery)
Up to (but not including) $550,000
Yes




  1. The Delegation Guidelines addressed property delegations in clause 6.4 in the following relevant terms:[195]
6.4 Property Delegations
The delegations and authorisations contained within this category are broken down as follows:
  1. Delegation to approve and execute a contract concerning the disposal of land;
  2. Delegation to execute a contract concerning the acquisition of land;
  3. Authorisation to sign Form 1 Statements and other Statutory Instruments;
  4. Delegation to grant leases, licences and easements (where Renewal SA is lessor /licensor);
  5. Delegation to approve land sale prices for residential allotments;
  6. Delegation to approve land sale prices for industrial allotments;
  7. Delegation to approve non-commercial rentals for non-profit organisations; and
  8. Delegation to approve of the disposal of an asset (not real property).
An explanation of each delegation and authorisation is as follows:
  1. This delegation allows delegates to approve and execute contracts for the disposal of land owned by Renewal SA. It should be noted that where the contract sale prices over $4,400,000 the Renewal SA Board of Management has determined that the Minister must approve the land sale contract and note that the Chief Executive is subsequently approved to enter into the related land sale contract. The land sale contract must ultimately be executed by Renewal SA (through the Chief Executive) as it is the registered proprietor of the land;
  2. This delegation allows delegates to approve and execute contracts for the acquisition of land by Renewal SA. Cabinet approval must be obtained for the Chief Executive to execute contracts for the purchase of land over $4.4 million (see Treasurer’s Instruction 8.13.1);
...
  1. This delegation allows delegates to approve the disposal of Renewal SA owned assets, not including real property assets. Such assets include office furniture and fittings.

Prior approval of actual decision

  1. The plaintiffs contend that the delegation is to the Chief Executive to make the substantive decision whether to enter into a contract concerning the disposal of land subject to the pre-condition that, before entering into such a contract, the Chief Executive must obtain the approval in principle of the Minister.
  2. The defendants contend that the delegation of the substantive decision to enter into a contract is to the Minister. The Minister approves the substance or essence of the transaction, leaving the formalities and finer details of the transaction to be completed and the document executed by the Chief Executive without further approval. The role of the Chief Executive is confined to verifying that the terms of the contract incorporate or reflect the substance or essence of the transaction approved by the Minister and formally executing the contract. The role of the Chief Executive does not extend to a consideration of the merits of the substance or essence of the transaction. The role of the Minister does not extend to a consideration of the formalities or finer details of the transaction.
  3. This gives rise to an issue of construction of the Instrument of Delegation. In respect of a contract concerning the disposal of land, the delegation in the Property Delegations Table of the Delegation Schedule is expressed to be:
    1. to the Chief Executive “(with Minister approval)” if the consideration is more than $4 million; and
    2. solely to the Chief Executive if it is for a lesser consideration.[196]
  4. By comparison, in respect of a contract concerning the acquisition of land, the delegation in the Property Delegations Table is expressed to be:
    1. to the Chief Executive “(with Cabinet approval)” if the consideration is more than $4 million; and
    2. solely to the Chief Executive and to no other officer if it is for a lesser consideration.
  5. All parties accept, and it is in any event evident, that the delegations in the Property Delegations Table in respect of contracts concerning the disposal and acquisition of land should be construed in harmony with each other, such that either both delegate the substantive decision-making to the Minister or Cabinet respectively or both delegate the substantive decision-making to the Chief Executive but require him or her to obtain the approval in principle of the Minister or Cabinet respectively as a pre-condition to entering into a contract.
  6. It is also evident that the reference in the Property Delegations Table to the need for Cabinet approval in respect of a contract concerning the acquisition of land for more than $4 million was inserted in compliance with clause 8.13.1 of Treasurer’s Instruction 8, which requires Cabinet approval to be obtained for a contract for the purchase of land where the expenditure involved exceeds $4 million. This is reinforced by the statement in paragraph 2 of clause 6.4 of the Delegation Guidelines that “Cabinet approval must be obtained for the Chief Executive to execute contracts for the purchase of land over $4.4 million (see Treasurer’s Instruction 8.13.1)”.
  7. On the proper construction of Treasurer’s Instruction 8, for the reasons given at [331] to [344] above, clause 8.13.1 requires only prior Cabinet approval as a pre-condition to a public authority making or implementing its own decision to enter into a contract. The delegation in the Property Delegations Table in respect of contracts concerning the acquisition of land should be construed in the same manner as clause 8.13.1 of the Treasurer’s Instruction 8. In turn, the delegation in the Property Delegations Table in respect of contracts concerning the disposal of land should be construed in the same manner as for contracts concerning the acquisition of land.
  8. This construction accords with the structure of the Property Delegations Table which delegates the decision-making to the Chief Executive (per the first column) but requires the Chief Executive to obtain the Minister’s approval (per the second column). It accords with the wording in the second column which places the words “with Minister approval” in parentheses, thereby emphasising that the delegation is to the Chief Executive and not to the Minister. It is also consistent with the position where the sale price is $4 million or less, in which case it is clear that the delegation is to the Chief Executive to make the substantive decision whether to enter into a sale contract.
  9. The natural and ordinary meaning and evident purpose of section 19 of the Act is to empower the Board to delegate a decision to enter into a specific transaction falling within a defined class, rather than to delegate only part of that decision. Even on the assumption that section 19 is capable of empowering the delegation of part only of a decision to enter into a contract, it is a very unlikely construction of the Instrument of Delegation that the Board intended to delegate only part of a decision to enter into a contract for the acquisition or disposal of land and to leave the balance of the decision undelegated and to be made other than pursuant to the delegation at all.
  10. There is nothing in the structure of the Property Delegations Table that suggests an intention to delegate only part of the decision to enter into a contract. There is nothing in the wording of either the Property Delegations Table or clause 6.4 of the Delegation Guidelines that suggests an intention to delegate only part of the decision to enter into a contract. There is no reference in the Delegation Schedule or Delegation Guidelines to the “essence” or “substance” of a transaction or contract.
  11. The construction advanced by the defendants entails mutually exclusive spheres of responsibility between the Minister, who is responsible for deciding on the substance or essence of the transaction and who makes that decision pursuant to the delegation contained in the Instrument of Delegation, and the general staff of the Authority who are responsible for deciding on the formal and finer details of the transaction and who make that decision otherwise than pursuant to the delegation contained in the Instrument of Delegation. There is an obvious risk that the Minister and the Authority’s staff will have different perceptions of which aspects of the transaction go to its substance or essence and which aspects are being addressed by one or the other. On the defendants’ construction, the Chief Executive is introduced as a third party to the decision-making, whose role is confined to verifying that the contract incorporates or reflects the substance or essence of the transaction and does not extend to consideration of the balance of the transaction. This construction potentially leads to great difficulties and risks for the reasons given at [342] above.
  12. At times during closing address, the first and second defendants submitted that the question what comprises the substance or essence of the transaction to be approved by the Minister is to be determined objectively. If, on its proper construction, the Property Delegations Table delegates to the Minister the substantive decision whether to enter into a contract, it is difficult to avoid the conclusion that what comprises the substance or essence of the transaction must be determined objectively by reference to the identification of the proposed transaction placed before the Minister because the Minister would not be at liberty merely to approve only one aspect of the proposed transaction that did not define its substance or essence. A fundamental problem with this construction is that, in the case of a complex transaction, it may be very difficult to draw the line objectively by reference to the terms of the proposed transaction between aspects of its substance or essence and other aspects. This difficulty is likely to lead to different perceptions between the Minister and the Authority and the realisation of the risks of bifurcated decision-making.
  13. At other times during closing address, the first and second defendants submitted that the question what comprises the substance or essence of the transaction is to be determined by the decision-maker. A fundamental problem with this construction is that it does not accord with the literal effect and evident intention of the Property Delegations Table to itself effect the delegation of the decision making and not to leave it to the Minister to determine how much of the substantive decision he or she makes and how much is left to staff of the Authority to decide.
  14. The potential difficulties that arise on the defendants’ construction can be illustrated by reference to the Contract in the present case. The Contract is a complex transaction granting a series of options to purchase land on complex terms. If the question what comprises the substance or essence of the transaction approved by the Minister is to be determined objectively, at one extreme the substance or essence of the transaction might be arguably confined to the level of generality contained in resolutions 2, 3, 5 and 8 made by Cabinet on 2 December 2013, being:
    1. Approve Renewal SA granting Adelaide Capital Partners an exclusive call option (or series of call options) for Adelaide Capital Partners and/or nominee to acquire up to 407 hectares of future industrial land within three tranches over a nine-year period.
    2. Approve the off market sale of approximately 150 hectares of land forming portion of Allotment 203 in Deposited Plan 75338 (or adjacent) at Dry Creek to Adelaide Capital Partners (and/or nominee) for $45 million (GST exclusive), relating to the first exercisable option if ACP exercises this option...
    3. Approve Renewal SA entering into a Long Term Licence with Adelaide Capital Partners for up to 257 hectares of land adjacent to the land described in Recommendation 3 for uses that facilitate Adelaide Capital Partners developing the land which it acquires in a manner that is consistent with its project plan...
    4. Approve the off-market sale of up to 257 hectares of land at Gillman/Dry Creek to Adelaide Capital Partners (and/or nominee) for up to $77.100 million (GST exclusive) relating to the second and third exercisable options if Adelaide Capital Partners exercises these options.
  15. At the other extreme, it might incorporate all of the terms of the proposed transaction defining the conditions precedent to the contract and the exercise of each option, the circumstances in which and terms on which ACP could exercise each option, the terms of the Land Sale Contract that comes into existence upon the exercise of each option, the conditions precedent to settlement of the purchase after ACP has exercised an option, the obligations of ACP to prepare a Project Plan and the constraints upon ACP in doing so, the obligations of ACP to develop land it has purchased and the constraints imposed upon it in doing so, the extent to which ACP can use the land under the Long Term Licence after exercise of the Stage 1 Option and various other matters. There are a range of possibilities between these two extremes that would give rise to great uncertainty as to the extent of the objective substance or essence of the transaction approved by the Minister. On the other hand, if it is a matter for the Minister to define the substance or essence of the transaction by reference to whatever characteristics he chooses, it might be expected that typically the Minister would simply say that he or she approves of the proposed transaction and similar difficulties would then arise in ascertaining what characteristics the Minister had implicitly chosen as comprising the substance or essence of the transaction.
  16. The construction advanced by the defendants leads to incongruous results where the consideration is $3.999 million as opposed to $4.001 million. In the former case, it is clear that the Instrument of Delegation delegates the entire decision whether or not to enter into the contract to the Chief Executive. On the defendants’ construction, in the latter case the Instrument of Delegation delegates only part of the decision relating to the essence or substance of the transaction and leaves the balance of the decision to be made otherwise than pursuant to the delegation.
  17. Paragraph 1 of clause 6.4 of the Delegation Guidelines states that, where the contract sale price is over $4 million, the Board “has determined that the Minister must approve the land sale contract” and goes on to note that “the Chief Executive is subsequently approved to enter into the related land sale contract”. Read in the light of the wording, structure and evident purpose of the Delegation Schedule and Treasurer’s Instruction 8, it is clear that the use of the word subsequently denotes that approval of the Minister is required before the Chief Executive can exercise the authority conferred upon him to make or implement the substantive decision to enter into a contract.
  18. On the proper construction of the Instrument of Delegation, the delegation effected by the Property Delegations Table and addressed in clause 6.4 of the Delegation Guidelines is to the Chief Executive to make the substantive decision whether to enter into a contract concerning the disposal of land subject to the constraint that, before entering into the contract, it is a pre-condition that the Chief Executive first obtain the approval of the Minister.

Consideration $4 million or over

  1. The plaintiffs make an alternative contention that, because the nature of the Contract is to grant an option to purchase for no consideration, the relevant consideration for the purpose of the Contract is not over $4 million.
  2. I reject this contention. The Property Delegations Table in the Delegations Schedule grants the delegation to execute a contract “concerning the disposal of Land”. Upon its proper construction, the Contract is a contract concerning the disposal of land within the meaning of that table because, by the Contract, the Authority binds itself to dispose of land upon the election of ACP and to do so for a consideration of not less than $45 million.
  3. Any other construction of the Property Delegations Table would enable the Authority’s officers named in the table (such as the Director, Major & Residential Project Delivery) to grant an option to dispose of all of the Authority’s land in South Australia for any amount of consideration without obtaining any higher authority. Such a construction is not tenable.

Implied authority of the Chief Executive

  1. The third defendant contends in the alternative that the Chief Executive had a general implied authority to enter into contracts which encompassed a decision by the Chief Executive to enter into the Contract.
  2. I reject this contention. The Contract granted options to ACP to purchase land that, on any view, had a value of tens of millions of dollars and represented almost 40 percent in area of the total land owned by the Authority. There is no basis to imply that a chief executive of an organisation such as the Authority has general implied authority to enter into a transaction of this magnitude and significance.
  3. In any event, the implied authority contended by the third defendant would be inconsistent with the express provisions of the Delegation Schedule which limit the power of the Chief Executive in respect of contracts concerning the disposal of land to contracts with a sale price of not more than $4 million.[197]

Authority of the Chief Executive under Power of Attorney

  1. The third defendant contends in the alternative that the Chief Executive had authority to enter into the Contract pursuant to the Power of Attorney.
  2. The Power of Attorney was granted in favour of 10 executive employees of the Authority as well as the Chief Executive. It did not confer any authority upon the attorneys to enter into or execute contracts. It complemented another power of attorney which conferred power on the attorneys to execute leases, surrenders, assignments, transfers or underleases to be lodged in the Lands Titles Registration Office in South Australia. The authority conferred by the Power of Attorney was expressed in the following terms:
    1. Renewal SA hereby authorises the Attorneys ... to execute, sign, accept, or consent to (as the case may be), for and on Renewal SA’s behalf and in Renewal SA’s name, any deed to which Renewal SA is a party, including, without limitation, the following:
2.1. any document expressed to be an indenture or deed; and
2.2 any lease, surrender, assignment or transfer or underlease that is not to be lodged in the Lands Titles Registration Office in South Australia, or to be registered or entered in any Register Book pursuant to the Real Property Act 1886, the Development Act 1993, the Crown Lands Act 1929 or any other legislation.
  1. The specific types of documents mentioned in the Power of Attorney are formal documents required by law to be in the form of deeds and include documents, such as transfers, that merely implement anterior obligations arising under contracts entered into by the Authority otherwise than under the Power of Attorney.
  2. It was manifestly not the intention of the Authority by granting the Power of Attorney to authorise the 11 employees to enter into contracts if and only if the contracts were cast in the form of deeds. If that had been the intention, and if the construction advanced by the third defendant were correct, those 11 employees would have unlimited authority to enter into contracts for any purpose on any terms. That would be fundamentally inconsistent with the Delegation Schedule and that contention is not tenable.
  3. The Chief Executive was not authorised by the Power of Attorney to execute the Contract unless a decision had been made by a person or body empowered by the Authority aliunde to enter into the Contract.

Delegation to the Chief Executive 26 August 2013

  1. It follows from my conclusion at [394] above that the Board delegated to the Chief Executive power to enter into a contract for sale of land for a price in excess of $4 million, subject to his obtaining the approval of the Minister for Urban Development. The Chief Executive therefore had power to enter into the Contract provided that he first obtained the approval of the Minister.

Revocation of power of Chief Executive

  1. The plaintiffs contend that, if the Chief Executive otherwise had power to enter into the Contract, that power was revoked by the Board on 21 November 2013 by the Board’s resolution recommending rejection of ACP’s proposal and that instead the Land be offered to the market for sale in a transparent and open manner.
  2. I reject this contention. Pursuant to section 19(2)(c) of the Act, the Board’s delegation of 26 August 2013 was revocable at will. However, the Board by its resolution on 21 November 2013 did not purport to revoke any previous delegations and there is no basis to construe the Board’s resolution as having that effect.
  3. Pursuant to section 19(2)(c) of the Act, the Board retained power to act itself in a matter. If the Board had made a decision that the Authority was not to enter into a contract with ACP, that would have determined the matter and superseded the general power that the Board’s delegate(s) otherwise had to make a decision to enter into a contract with ACP. However, the resolution made by the Board on 21 November 2013 did not make a decision one way or the other as to whether the Authority should enter into a contract with ACP. The Board merely resolved to recommend to the Minister not to enter into a contract with ACP, which did not purport to determine the matter itself. Indeed, it is an agreed fact that “at no time did the URA board decide whether or not to enter into the deed”.[198]

Who made the decision?

  1. The next issue is who made the decision on behalf of the Authority to enter into and execute the Contract.
  2. The defendants contend that this issue should be determined on an objective basis and that evidence from the putative decision-maker as to his or her subjective intention is inadmissible. The plaintiffs contend that this question should be determined subjectively by reference to the intention of the putative decision-maker and alternatively that evidence of subjective intention is admissible on the objective question, but do not make substantive submissions in support of these contentions.
  3. I reject the plaintiffs’ contentions. The questions whether a putative party to a contract intends to enter into a contract and what are the terms of a contract are determined in private law on an objective basis in accordance with the general approach of the law of contract.[199] If the question whether Cabinet, the Minister or the Chief Executive made a decision to enter into the Contract or to approve entry into the Contract is to be determined in accordance with private law, the objective approach applies. If that question is to be determined in accordance with public law, the rationale for the approach of private law applies a fortiori. It would lead to great uncertainty and inconvenience if the validity or lawfulness of contracts entered into by statutory authorities depended on the subjective intent of the person making the decision to enter into the contract. Irrespective of whether this question turns on the general public law or on the construction of the Act and the Public Corporations Act, the objective approach applies.

The Chief Executive

Existence and terms of decision

  1. I have held that, on the proper construction of the Instrument of Delegation, the relevant delegation is to the Chief Executive to make the substantive decision whether to enter into a contract concerning the disposal of land subject to the constraint that, before entering into the contract, it is a pre-condition that the Chief Executive first obtain the approval of the Minister.
  2. The Chief Executive executed the Contract on 11 December 2013. The plaintiffs contend that the Chief Executive did not make a decision on 11 December 2013 to enter into the Contract but merely executed the Contract in purported implementation of a substantive decision made on 2 December 2013 by Cabinet to enter into the Contract purportedly on behalf of the Authority but without having power to do so.
  3. The first and second defendants contend that the Chief Executive did not make a substantive decision on 11 December 2013 to enter into the Contract but merely executed the Contract in implementation of a decision made on 2 December 2013 by Cabinet or the Minister for Urban Development to enter into the Contract within the scope of their delegation from the Authority. They contend that the role of the Chief Executive was, in accordance with the construction advanced by them of the Instrument of Delegation, confined to verifying that the terms of the Contract incorporated or reflected the substance or essence of the transaction subject of the substantive decision made by others on 2 December 2013 and then formally executing the Contract and did not extend to considering or deciding on the merits of the Contract or its terms, whether substantive or non-substantive.
  4. The third defendant contends that, if it should be held (contrary to the defendant’s primary and secondary cases) that Cabinet or the Minister for Urban Development did not make a substantive decision to enter into the Contract within the scope of their delegation from the Authority, it should be found that the Chief Executive on 11 December 2013 did make a substantive decision to enter into the Contract on behalf of the Authority.
  5. As noted above at [169] and [170] above, the Contract executed by the Chief Executive on 11 December 2013 was materially different to the Draft Contract that had been considered by Cabinet and the Minister on 2 December 2013. The Chief Executive must necessarily have been aware that the Contract was different to the Draft Contract and yet he proceeded to execute it on behalf of the Authority notwithstanding that its terms had not been the subject of consideration by Cabinet or the Minister.
  6. The most material difference related to the identification of the areas of land the subject of each of the Stage 1 Option, the Stage 2 Option and the Stage 3 Option. Those areas were required by the Draft Contract and the Contract to be defined in the Project Plan, but that definition in turn was required to be substantially consistent with the indicative stages described in the Concept Plan. Stage 1 shown in the drawing forming part of the Concept Plan in the Draft Contract was much larger and of a different shape to stage 1 shown in the drawing forming part of the Concept Plan in the Contract. There were also differences, albeit smaller, in the sizes of stages 2 and 3 and significant changes in the shape of the land encompassed by them as between the Draft Contract and the Contract. The changes to the definition of stage 1 were important to the Authority because they defined the size, shape and physical land ACP was required to elect by 31 December 2014 to purchase pursuant to the Stage 1 Option or not to proceed with the Contract. The inference is unavoidable that the Chief Executive took it upon himself to decide on the definition of areas of land the subject of each of the three Options for the purposes of the Contract that he executed. I reject the first and second defendants’ contention that this was not decided by the Chief Executive but by general staff of the Authority to whom the Board had not delegated any part of the decision-making function under the Instrument of Delegation.
  7. The second most material difference related to the Long Term Licence. The Draft Contract merely contained a clause that, by the contract, the Authority granted to ACP a licence that will operate from the Stage 1 Settlement Date on the terms set out in Annexure G but did not include any such terms in Annexure G. The Contract contained terms of a licence agreement comprising 18 pages defining, inter alia, the licence term, the permitted use, expenses to be met by the licensee, make good obligations and other obligations imposed upon the licensee. It permitted use of the licensed land for uses not confined to those incidental or ancillary to use by ACP of land it had acquired. The resolution by Cabinet, which I assume for present purposes[200] was adopted by the Minister, was expressed in terms that the Authority was approved to enter into a long term licence for up to 257 hectares for uses that facilitate ACP developing the land which it acquires in a manner that is consistent with its Project Plan. That definition of use was vague and general and did not extend to uses beyond those incidental or ancillary to use by ACP of land that it had acquired. Again, the inference is unavoidable that the Chief Executive took it upon himself to decide all of the terms of the Long Term Licence.
  8. Taking into account all of the variations between the Draft Contract and the Contract, the Chief Executive’s decision to execute the Contract necessarily connotes that he made a substantive decision of his own on behalf of the Authority to enter into the Contract.
  9. I reject the first and second defendants’ contention that it was a reasonable possibility precluding the above inference that the Chief Executive by deciding to execute the Contract did not take responsibility for considering any of the variations between the Draft Contract and the Contract or that he did not take responsibility for considering and deciding what might be regarded as the substance or essence of the transaction. The Chief Executive must necessarily have been aware of the terms of the Instrument of Delegation which I have held clearly delegated the substantive decision-making to him (subject only to obtaining the prior approval of the Minister). On any objective view, the definition of the location and extent of the three stages and the terms of the Long Term Licence involved the substance or essence of the transaction and comprised aspects in respect of which the Chief Executive made the substantive decision.
  10. All of the evidence reinforces, and none of the evidence detracts from, this conclusion based on the objective facts and circumstances. The Chief Executive authorised the provision to the Minister for Urban Development of the draft Cabinet submission which became the September Cabinet submission. He did this independently of the Board. That submission unequivocally advocated in favour of the Authority entering into a transaction with ACP on the basis that the terms of the ACP offer be rejected, but that it proceed on the basis of 10 defined variations. Following Cabinet’s consideration of that submission, the executive staff of the Authority, who were under the ultimate control of the Chief Executive, directly undertook negotiations with ACP on the 10 defined variations. This was done independently of the Board.
  11. The Chief Executive authorised the fourth Board Paper sent to board members on 28 November. That paper unequivocally advocated in favour of ACP’s revised offer notwithstanding, and subject to the constraints naturally arising from, the Board’s decision on 21 November to recommend to the Minister rejection of that offer. On 29 November 2013, the Chief Executive signed a minute addressed to the Minister for Urban Development conveying the resolution of the Board made on that day and stating that Authority staff had negotiated with ACP a revised proposal by ACP that either met or exceeded the criteria assessed against the 10 shortcomings previously identified. It attached a draft Cabinet submission that strongly advocated in favour of approval of that revised proposal.
  12. The evidence referred to in the previous two paragraphs, considered alone, might be regarded merely as evidence of support by the Chief Executive for a decision being made by Cabinet or the Minister and his merely implementing it. However, coupled with the fact that the Board by the Instrument of Delegation had delegated the substantive decision-making to the Chief Executive (subject to obtaining the prior approval of the Minister) and the significant variations between the Draft Contract considered by Cabinet and the Minister and the Contract considered only by the Chief Executive, the conclusion is unavoidable that Mr Hansen made the substantive decision on behalf of the Authority to enter into the Contract.
  13. The plaintiffs contend that the inference that the Chief Executive made a substantive decision to enter into the Contract should not be drawn because it would involve a contravention by the Chief Executive of the principle against acting under dictation.[201] They contend that, if the Chief Executive did make a substantive decision to enter into the Contract, his decision is void because it offends that principle.

Acting under dictation

  1. In R v Anderson; Ex parte IPEC-Air Pty Ltd,[202] IPEC had applied to the Director-General of Civil Aviation for a charter licence to carry interstate freight and permission to import aircraft for that purpose. The High Court proceeded on the basis that the application was refused, not on its own merits, but because the government had adopted a policy against allowing anyone to participate in interstate airfreight other than those already engaged in it. IPEC argued that the Director-General’s decision offended the principle against dictation. That argument was rejected by the High Court. Taylor and Owen JJ said:
It should perhaps be added that while we think that the evidence shows that in considering the prosecutor's application for permission to import aircraft the Director-General took into account the policy laid down by the Government, we are unable to accept the view that this was not a matter proper to be considered by him nor, with respect, do we agree with the conclusion reached by Kitto J. that the refusal to grant the permission sought was, in truth, not the decision of the Director-General but that of the Government.[203]

and Windeyer J said:

Then it is said that the Director-General refused a permit for importation simply because the Minister made known to him that it would be against Government policy to allow the prosecutor to import aircraft for the purpose it proposed. Whether or not the evidence shows this convincingly, I shall assume it to be so. I make this assumption the more readily because, with all respect for those who take a different view, I think that the only consideration by which the Director-General could properly have been guided was the policy of the Government. [204]

While Kitto J (Menzies J agreeing) dissented, his Honour accepted that government policy was a relevant consideration for the Director-General in the circumstances. He said:

It may be conceded that where the law confers a power of discretionary decision upon an officer of the civil service in his official capacity Government policy is not in every case an extraneous matter which he must put out of consideration.[205]
  1. In Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth of Australia, [206] the Commonwealth government had entered into agreements with Ansett the object of which was to maintain only two operators of trunk route airline services in Australia, being TAA and Ansett. Ansett sought injunctive relief against the Commonwealth to prevent the Commonwealth granting permission to IPEC to import aircraft to operate trunk route airline services in Australia. An issue arose whether the agreements were invalid by reason of the dictation and fettering principles. The High Court, Mason J dissenting, held that the agreements did not offend the dictation principle. Aickin J (Barwick CJ agreeing), after referring to the decision in R v Anderson; Ex parte IPEC-Air Pty Ltd, said:
There is therefore a majority for the view that it was proper for the Director-General to take into account governmental policy, though no doubt on matters of safety he could properly confine himself to his own or his department's expert knowledge. Indeed apart from such technical matters, it is hard to see what relevant matters there would be save government policy on imports of aircraft and imports generally.
It is clear from these citations that, although the discretion is that of the Secretary of the Department of Transport, it is not one to be exercised entirely according to his personal views. Government policy, and particularly that applicable to matters within the scope of his Department must in every case be a matter for his serious consideration. Moreover the Minister or the cabinet may properly indicate to him what government policy is in relation to imports of aircraft generally or to the importation of particular aircraft. There is nothing improper in the Minister requesting him to act in a particular manner or seeking to influence or persuade him to act in a particular manner, nor is there any failure of duty by the head of a department of government in acting in accordance with such a request.[207]

and Gibbs J said:

I do not wish to be thought to accept the argument that if the Agreements were construed in that way they would constitute an invalid fetter on the discretion conferred on the Secretary of the Department of Transport by the Customs (Prohibited Imports) Regulations - the Agreements after all have statutory approval - or that they would contravene s. 92 of the Constitution - Reg. v. Anderson; Ex parte Ipec-Air Pty is opposed to that argument. Nor do I think that it would be wrong for the Secretary, in exercising his discretion under the regulations, to give weight, and indeed conclusive weight, to the policy of the government.
In the present case, on the construction of the Instrument of Delegation as advanced by the plaintiffs, which I have accepted, is that the Chief Executive was required to obtain the prior approval of the Minister before entering into a contract. There is no contention by the plaintiffs that, in this respect or otherwise, the Instrument of Delegation was ultra vires. In these circumstances, it was appropriate for the Secretary to take into account the views of the Minister, provided that he did not allow those views to overbear the exercise of his own judgment whether the Authority should enter into the Contract. [208]
(Footnotes omitted)
  1. On the evidence, the Chief Executive did not allow the views of the Minister to overbear the exercise of his own judgment. On the basis of the evidence referred to at [422] to [423] above, it was the Chief Executive who was seeking to influence the Minister and Cabinet that the Authority should enter into the proposed transaction with ACP. On the objective evidence, the Chief Executive did not act under dictation from either Cabinet or the Minister.

Existence of Minister’s decision

  1. The Chief Executive’s power to decide to enter into and to execute the Contract was conditional upon his first obtaining the approval of the Minister for Urban Development.
  2. The defendants contend that it should be inferred that the Minister made a decision approving the proposed transaction from the fact that the Minister was a signatory to the December Cabinet submission advocating in favour of acceptance of the ACP offer, the convention that Ministers are bound by and required to support decisions of Cabinet unless they resign and the Minister did not resign and the fact that on 3 December 2013 the Minister’s Liaison Officer sent an email to the Authority saying that the December Cabinet submission had been approved in Cabinet meeting on 2 December 2013. The defendants make this contention in the context of their (secondary) case that the Minister made the substantive decision that the Authority enter into the Contract, but this contention applies equally if, as I have held, the role of the Minister was confined to granting approval for the Chief Executive making and implementing the substantive decision.
  3. The plaintiffs take issue with the drawing of this inference. They accept that the Minister was part of a collective decision by Cabinet on 2 December 2013 relating to the ACP proposal, but contend that on the evidence there is no basis to infer that the Minister made any decision in his own right in relation to entry into the Contract. They also contend that drawing the inference is inconsistent with the dictation and fettering principles.
  4. The plaintiffs do not take issue with the existence of the executive convention that:
Ministers are bound by decisions of Cabinet. They are required to support those decisions.[209]
  1. Subject to the plaintiffs’ dictation and fettering contention, I draw the inference that the Minister did in his own right approve the proposed transaction. The Minister was the Minister responsible for the Authority and had sponsored, jointly with the Minister for State Development, the proposed resolutions. I have held that the power to approve the transaction was clearly vested in the Minister and not Cabinet. Following the Cabinet decision on 2 December 2013, the Minister did not resign his office but on the contrary on 3 December 2013 communicated the resolutions approving the proposed transaction without demur to the Authority. The Minister had taken the unusual step of attending the Board meeting on 25 November 2013 to promote furtherance of acceptance of ACP’s proposal. Objectively, it is evident from his conduct that it was the intention of the Minister manifested on 3 December 2013 that, he was deciding in favour of the proposed transaction.
  2. The principle against fettering relates to a present decision to fetter future performance of a function.[210] That principle has no application to the present circumstances in which it is posited that the Minister did not fetter his discretion in advance but rather made a decision after the event in accordance with Cabinet’s earlier decision.
  3. The principle against acting under dictation does not preclude a decision-maker taking into account views of others provided that they do not overbear the ultimate exercise of the decision-maker’s judgment.[211] In circumstances in which the Minister for Urban Development was the sponsor of the proposal and obviously supported it, his approval of it after it had been considered by Cabinet did not breach the dictation principle.

Grant of approval by Minister

  1. The plaintiffs concede[212] that, if (in accordance with their case) it is held that the role of the Minister under the Property Delegations Table was confined to prior approval as opposed to the substantive decision to enter into a contract but (contrary to their case) it is found that the Minister made a decision in his own right in respect of the ACP proposal, the Minister’ decision amounted to an “approval” within the meaning of the Property Delegations Table of the Contract notwithstanding the variances between the Draft Contract considered by the Minister and the Contract executed by the Chief Executive.
  2. I conclude that the Minister granted approval in respect of the Contract within the meaning of the Property Delegations Table of the Delegation Schedule.

Conclusion

  1. The Chief Executive made the decision to enter into and execute the Contract with the approval of the Minister for Urban Development in accordance with the delegation from the Board contained in the Instrument of Delegation.
  2. The plaintiffs’ challenge to the validity of the Contract on the ground that it was executed without power or authority fails.

Cabinet

  1. My conclusion just reached and my earlier conclusion that the Board did not delegate to Cabinet any power to Cabinet to make a decision in relation to entry into the Contract renders Cabinet’s decision of 2 December 2013 legally irrelevant. However, because it is the defendants’ primary contention that Cabinet made the substantive decision on behalf of the Authority to enter into the Contract, I address that issue on the assumption that, contrary to my earlier conclusion, Cabinet was empowered by the Board to make the decision.

Terms of decision

  1. Cabinet’s decision on 2 December 2013 was expressed in the following terms (the 5 Resolutions):
    1. Approve the Adelaide Capital Partners offer as documented in the 13 November 2013 (version 7.1) draft of the Deed (attached as appendix C), including the Project Objectives (Appendix A) and the Concept Plan (Appendix B).
    2. Approve Renewal SA granting Adelaide Capital Partners an exclusive call option (or series of call options) for Adelaide Capital Partners and/or nominee to acquire up to 407 hectares of future industrial land within three tranches over a nine-year period.
    3. Approve the off market sale of approximately 150 hectares of land forming portion of Allotment 203 in Deposited Plan 75338 (or adjacent) at Dry Creek to Adelaide Capital Partners (and/or nominee) for $45 million (GST exclusive), relating to the first exercisable option if ACP exercises this option.
    4. Approve Renewal SA entering into a Long Term Licence with Adelaide Capital Partners for up to 257 hectares of land adjacent to the land described in Recommendation 3 for uses that facilitate Adelaide Capital Partners developing the land which it acquires in a manner that is consistent with its project plan.[213]
    5. Approve the off-market sale of up to 257 hectares of land at Gillman/Dry Creek to Adelaide Capital Partners (and/or nominee) for up to $77.100 million (GST exclusive) relating to the second and third exercisable options if Adelaide Capital Partners exercises these options.[214]
  2. Resolutions 2 to 5 were each expressed in very general terms apposite to approving in principle a general transaction between the Authority and ACP. None of those resolutions referred to the actual terms of a transaction or to the essential terms that would have to be agreed to amount to the grant of call options, sale of land or grant of a licence respectively. The resolutions were expressed in terms legally incapable of amounting to a decision to enter into a transaction on specific terms. This is consistent with Cabinet merely granting prior approval or pre-authorisation under TI 8 and leaving it to the Authority to decide whether to enter into transactions within the scope of that pre-authorisation. Resolution 4 approved the Authority entering into a long term licence but, as noted above, Cabinet did not have the terms of the proposed licence. This approval could only have been a high level approval in principle.
  3. Resolution 1 is expressed in terms of “approval” of ACP’s offer (the Draft Contract) as opposed to Cabinet making a decision on behalf of the Authority to accept that offer. The Draft Contract approved was on its face incomplete: there were no licence terms at Annexure G. This is also consistent with Cabinet merely granting prior approval or pre-authorisation under TI 8 at a relatively high level and leaving it to the Authority to decide whether to enter into a contract with ACP.
  4. Considered as a whole, Cabinet’s decision should not be construed as a decision on behalf of the Authority to enter into a contract but rather as being confined to the grant of prior approval or pre-authorisation for the Authority to make its own decision whether to enter into a contract. In any event, as noted above, the Contract executed by the Chief Executive contained substantially different terms to the Draft Contract considered by Cabinet. I have rejected the defendants’ contention that, if Cabinet had a role at all under the Instrument of Delegation, its role was to make the substantive decision on behalf of the Authority but not to address more than the substance or essence of the transaction.

Minister for Urban Development

  1. The defendants’ secondary contention is that the Minister for Urban Development decided on behalf of the Authority to enter into the Contract and he was empowered to do so.
  2. I have concluded that the Minister did make a decision granting approval for the Authority, and more specifically the Chief Executive, to make its own decision to enter into the proposed transaction with ACP. For the reasons given at [441] to [444] above, the Minister’s decision should not be construed as a decision on behalf of the Authority to enter into a contract but rather as being confined to the grant of prior approval for the Authority to make its own decision whether to enter into a contract. In any event, as noted above, the Contract executed by the Chief Executive contained substantially different terms to the Draft Contract considered by the Minister. I have rejected the defendants’ contention that the Minister’s role under the Instrument of Delegation was to make the substantive decision on behalf of the Authority but not to address more than the substance or essence of the transaction.

Ratification

  1. The third defendant contends in the alternative that, if the Chief Executive did not have power or authority to enter into the Contract on behalf of the Authority, by its defence in this action the Authority has ratified the Contract and it is valid and binding as between the Authority and ACP.
  2. I assume, without deciding, that the doctrine of ratification under the general law applies to contracts entered into by the Crown or a statutory corporation. Ratification involves the conferring of authority on an agent to enter into a contract after the agent has done so and has retrospective effect.[215] Ratification may be express or inferred. In either case, the words or acts must be unequivocal.[216]
  3. When a plaintiff institutes an action against the other party to a contract purportedly entered into by an agent for the plaintiff without authority, the institution of the action can form a basis to infer ratification of the contract.[217]
  4. The present case is a judicial review action in which one of the issues explicitly raised by the plaintiffs is whether the Chief Executive executed the Contract on 11 December 2013 with authority of the Authority. The Authority is defending the action on the ground, inter alia, that the Chief Executive did have authority on 11 December 2013. The Authority does not contend in this action that it has ratified the Contract. There is no conduct by the Authority from which it could be inferred that it has ratified an unauthorised act by the Chief Executive in executing the Contract.
  5. In any event, there is no evidence as to the identity of the person or body giving instructions on behalf of the Authority to defend the action. It cannot be known whether that person or body has authority to enter into or ratify the Contract as opposed to authority to provide instructions to defend the action. For example, if it is the Chief Executive who is giving those instructions, if the Chief Executive lacked authority to enter into the Contract on 2 December 2013, he or she lacks authority to ratify the Contract subsequently.

Ostensible authority

  1. The third defendant contends in the alternative that, if the Chief Executive did not have actual authority to enter into the Contract on behalf of the Authority, he had ostensible authority to do so and it is valid and binding as between the Authority and ACP.
  2. The doctrine of ostensible authority was described and explained by Lord Keith in Armagas Ltd v Mundogas SA[218] in the following terms:
Ostensible authority comes about where the principal, by words or conduct, has represented that the agent has the requisite actual authority, and the party dealing with the agent has entered into a contract with him in reliance on that representation. The principal in these circumstances is estopped from denying that actual authority existed.[219]
  1. In The Royal British Bank v Turquand,[220] two directors of a company executed under seal a bond acknowledging a debt to the plaintiff bank. The company denied that the directors were authorised to grant the bond because a clause in the company’s deed of settlement provided that directors might borrow on bonds such sums as should from time to time by general resolution be authorised to be borrowed. The Court of Exchequer held that the company was bound. Jervis CJ (delivering the judgment of the Court) said:
We may now take for granted that the dealings with these companies are not like dealings with other partnerships, and that the parties dealing with them are bound to read the statute and the deed of settlement. But they are not bound to do more. And the party here, on reading the deed of settlement, would find, not a prohibition from borrowing, but a permission to do so on certain conditions. Finding that the authority might be made complete by a resolution, he would have a right to infer the fact of a resolution authorizing that which on the face of the document appeared to be legitimately done.[221]
  1. In Northside Developments Pty Ltd v Registrar-General,[222] the High Court considered the rule in Turquand’s case.[223] Mason CJ, Dawson J and Toohey J considered that the rule, at least in its application other than to instruments to which a company’s common seal is affixed, was part of the doctrine of ostensible authority. Brennan J and Gaudron J considered that the rule had a common foundation to that of the doctrine of ostensible authority, namely estoppel, but did not necessarily regard it simply as a species of ostensible authority.
  2. Whether ostensible agency principles are applied or the rule in Turquand’s case[224] is applied directly, in the present case ACP did not seek or rely on any instrument of delegation by the Board under section 19 of the Act. It simply did not have the equivalent of a constitution for the Authority such as the deed of settlement in Turquand’s case[225] or the articles of association in Northside Developments Pty Ltd v Registrar-General.[226] Assuming that ACP should be treated as being aware of the existence and content of section 19, it was not entitled to presume or act on the presumption that the Board must have delegated relevant power to the Chief Executive to enter into a contract under which land worth many tens of millions of dollars might be sold. There was no reason why ACP could not have called for access to any relevant instrument of delegation giving such power to the Chief Executive.
  3. Assuming for present purposes that the doctrine of ostensible agency and the rule in Turquand’s case[227] are applicable, I reject the third defendant’s contention.

Minister for State Development

  1. The Minister for State Development executed the Contract on 11 or 12 December 2013. No issue is raised concerning the power or authority of the Minister for State Development to execute the Contract and he executed it in his own name and on his own behalf.
  2. The defendants contend that, if the Contract was executed by the Chief Executive without power or authority from the Authority, it is not invalid because it is still binding as between the Minister for State Development and ACP and relief in respect of the role of the Authority as a party to the Contract should be refused in the discretion of the Court. I address this contention in Part K below.

PART G: NON-COMPLIANCE WITH SECTION 11

  1. The fourth issue to be determined is whether, by making the decision to enter into and by entering into the Contract, the Authority contravened section 11 of the Public Corporations Act and, if so, whether as a matter of statutory construction the contravention rendered it void or alternatively unlawful and an injunction should be granted to restrain the parties from performing the Contract.

Do contraventions render acts void?

  1. The first question that arises is whether as a matter of statutory construction a contravention of section 11 renders the decision to enter into the Contract and the Contract itself void.

General approach to statutory construction

  1. The facts in Project Blue Sky Inc v Australian Broadcasting Authority[228] were that the Australian Broadcasting Authority (the ABA) made a standard which came into effect from 1 January 1996 relating to the Australian content of programs broadcast by commercial licensees under section 122 of the Broadcasting Services Act 1992 (Cth) (the Broadcasting Act). Clause 9 of the standard required 50 percent of broadcasts to the end of 1997 and 55 percent thereafter to comprise “Australian programs”. Section 122(4) provided that standards must not be inconsistent with the Broadcasting Act or its regulations and section 160(d) provided that the ABA was to perform its functions in a manner consistent with Australia’s obligations under any agreement between Australia and a foreign country. Under an agreement between Australia and New Zealand, it was agreed that Australia would grant to New Zealanders access rights and treatment no less favourable than for Australians. The High Court held that clause 9 of the ABA standard was inconsistent with Australia’s obligations under that agreement and in breach of section 160. However, the High Court (Brennan CJ dissenting) held that the contravention of section 160 did not render the standard invalid. McHugh, Gummow, Kirby and Hayne JJ said:
...a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute".
An act done in breach of s 160 is not invalid
Section 160 proceeds on the hypothesis that the ABA has power to perform certain functions and directs that it "is to perform" those functions "in a manner consistent with" the four matters set out in the section. In the present case, for example, s 158(j) as well as s 122 authorised the making of a standard relating to the Australian content of television programs. Thus, the making of an Australian content standard was not outside the powers granted to the ABA even though, as we have concluded, cl 9 of the Standard was made in breach of the Act. The fact that s 160 regulates the exercise of functions already conferred on the ABA rather than imposes essential preliminaries to the exercise of its functions strongly indicates that it was not a purpose of the Act that a breach of s 160 was intended to invalidate any act done in breach of that section.
That indication is reinforced by the nature of the obligations imposed by the s 160. Not every obligation imposed by the section has a rule-like quality which can be easily identified and applied....In particular situations, it is almost certain that there will be room for widely differing opinions as to whether or not a particular function has been carried out in accordance with these policies or general directions. When a legislative provision directs that a power or function be carried out in accordance with matters of policy, ordinarily the better conclusion is that the direction goes to the administration of a power or function rather than to its validity.
...
...It is hardly to be supposed that it was a purpose of the legislature that the validity of a licence allocated by the ABA should depend on whether or not a court ultimately ruled that the allocation of the licence was consistent with a general direction, policy or treaty obligation falling within the terms of s 160. ... In many cases, licensees would have great difficulty in ascertaining whether the ABA was acting consistently with the obligations imposed by s 160. Expense, inconvenience and loss of investor confidence must be regarded as real possibilities if acts done in breach of s 160 are invalid.
Because that is so, the best interpretation of s 160 is that, while it imposes a legal duty on the ABA, an act done in breach of its provisions is not invalid.[229]
(Footnotes omitted)

Structure of section 11

  1. Section 11(1) and (2) of the Public Corporations Act provides:
(1) A public corporation must perform its commercial operations in accordance with prudent commercial principles and use its best endeavours to achieve a level of profit consistent with its functions.
(2) A public corporation must perform its non-commercial operations (if any) in an efficient and effective manner consistent with the requirements of its charter.
  1. Section 11 imposes obligations on public corporations as to their performance of both commercial and non-commercial operations.
  2. The parties advance differing constructions of section 11. The plaintiffs contend that subsection 11(1) imposes two separate obligations upon a public corporation, but only the second is qualified by reference to its functions. The defendants contend that subsection 11(1) imposes a single composite obligation upon a public corporation which is qualified because compliance must be consistent with its functions.
  3. On its proper construction, subsection 11(1) imposes two separate, but related, obligations upon a public corporation, but each is qualified because compliance must be consistent with its functions. Subsection 11(1) effectively requires a public corporation to:

(1) perform its commercial operations in accordance with prudent commercial principles consistent with its functions; and

(2) use its best endeavours to achieve a level of profit consistent with its functions.

  1. The subsection should be construed in this manner for several reasons. The concept of “prudent commercial principles” is generally much broader than the concept of “achieving a level of profit”. The limb relating to achieving a level of profit necessarily is confined to a best endeavours obligation, whereas the limb relating to prudent commercial principles involves no best endeavours aspect. The limb relating to prudent commercial principles explicitly relates to the performance of the corporation’s commercial operations, whereas the limb relating to achieving a level of profit does not. While there is considerable overlap between the two limbs, neither limb encompasses the other. It is possible to fail to comply with one limb but to comply with the other.
  2. The requirement for consistency with the corporation’s functions qualifies the obligation imposed by each limb. Even in the absence of any reference to the corporation’s functions in relation to the first limb, it would be necessary implication that the corporation’s performance of its commercial operations and its compliance with prudent commercial principles must be consistent with its functions.
  3. The qualification by reference to the corporation’s functions is an important one because a corporation’s constituent Act or regulations will usually impose functions upon it which will impinge upon its ability merely to pursue profit or merely to act in accordance with prudent commercial principles. An instance is the functions imposed upon the Authority by regulation 6 of the Regulations which requires the Authority to act in the public interest in designated ways in performing designated functions.
  4. Subsection 11(2) imposes an obligation upon a public corporation to perform its non-commercial operations in an efficient and effective manner, but this obligation is qualified in turn because compliance must be consistent with the requirements of its charter.
  5. The defendants contend that subsections 11(1) and (2) should be construed consistently so that acts in breach of either subsection are either void or not void. The plaintiffs do not explicitly take issue with that contention, which I accept in any event. It would be incongruous if the legislative intent were that an act in breach of subsection (2) not be void but an act in breach of subsection (1) be void.
  6. The defendants contend that section 11 does not address individual acts or transactions but rather is directed to overall performance by the corporation at a strategic level. I reject that contention. The word “operations” is apposite to encompass entry into transactions. The overall performance of a corporation is the aggregation of its individual acts or transactions. Confining the scope of section 11 in the manner contended by the defendants would deprive it of much of its force and utility and be contrary to its evident purpose and object.

Does contravention of section 11 render an act void?

  1. Determining whether a public authority has acted in contravention of section 11 will often involve matters of judgment and degree and it may be difficult to determine this in advance unless and until the question is decided by a court. The observation of the High Court in Project Blue Sky Inc that “it is hardly to be supposed that it was a purpose of the legislature that the validity of a licence allocated by the ABA should depend on whether or not a court ultimately rules that the allocation of the licence was consistent with a general direction, policy or treaty obligation falling within the terms of s 160”[230] is apposite to the validity of a contract entered into by the Authority. It is hardly to be supposed that it was a purpose of the legislature that the validity of a contract entered into by the Authority should depend on whether or not a court ultimately rules that the decision to enter into the contract was consistent with the obligations falling within the terms of section 11. This is especially apparent when considering the obligation imposed by subsection 11(2) to perform non-commercial operations in an “efficient” and “effective manner”.
  2. The observation of the High Court in Project Blue Sky Inc that “Section 160 proceeds on the hypothesis that the ABA has power to perform certain functions and directs that it ‘is to perform’ those functions ‘in a manner consistent with’ the four matters set out in the section”[231] is apposite to Section 11. Section 11 proceeds on the hypothesis that the Authority has power to perform certain functions and directs that it must perform those functions in a manner consistent with its functions and its charter.
  3. On its proper construction, section 11 does not render void an act by a public corporation performed in contravention of the section.

Do contraventions render acts unlawful?

  1. In Project Blue Sky Inc,[232] the ABA made a standard requiring “Australian programs” to comprise 50 percent of defined broadcasting periods for the years up to the year ending 31 December 1997 and 55 percent for succeeding years. Notwithstanding that the majority in the High Court held that the standard was not invalid, the Court made a declaration in April 1998 that clause 9 of the standard was unlawfully made and gave liberty to the plaintiffs to apply for an injunction restraining the ABA from taking further action based on its unlawful action. McHugh, Gummow, Kirby and Hayne JJ said:
...the best interpretation of s 160 is that, while it imposes a legal duty on the ABA, an act done in breach of its provisions is not invalid.
In a case like the present, however, the difference between holding an act done in breach of s 160 is invalid and holding it is valid is likely to be of significance only in respect of actions already carried out by, or done in reliance on the conduct of, the ABA. Although an act done in contravention of s 160 is not invalid, it is a breach of the Act and therefore unlawful. Failure to comply with a directory provision "may in particular cases be punishable"[233]. That being so, a person with sufficient interest is entitled to sue for a declaration that the ABA has acted in breach of the Act and, in an appropriate case, obtain an injunction restraining that body from taking any further action based on its unlawful action.[234]
(Footnote retained)
  1. It is common ground between the plaintiffs and the first and second defendants that an act is “unlawful” within the meaning of that term used by the High Court in Project Blue Sky Inc[235] if it contravenes a statutory requirement imposed by section 11. The third defendant takes a different position. It contends that an act in breach of section 11 is not “unlawful” because, on its proper construction, section 11 does not impose a legal duty or a duty intended to be legally enforceable.
  2. In Project Blue Sky Inc,[236] the majority characterised the act of the ABA in making the standard in breach of sections 122(4) and 160 of the Broadcasting Act as unlawful.[237] Those sections did not create criminal offences or otherwise provide consequences of their breach. It follows that the majority was not using the word “unlawful” to refer to acts comprising criminal offences and was using the word in its general and more expansive sense of referring to any act in breach of a requirement imposed by a statutory provision.
  3. Section 11 of the Public Corporations Act imposes a requirement upon a public corporation to act in accordance with its provisions. I accept the submission of the plaintiffs and first and second defendants and reject the submission of the third defendant. An act in breach of section 11 is unlawful.

Consequences of unlawfulness for contracts

  1. It is common ground between the plaintiffs and the first and second defendants that a person with standing may seek a prohibitive injunction to restrain the commission or continuance of a breach of statute.[238] The plaintiffs contend, and the defendants deny, that the Court has jurisdiction and power to restrain future performance of a contract entered into by one party in breach of a statutory provision notwithstanding that, on its proper construction, the statutory provision does not render void or unenforceable the contract or the action taken by the party in breach of the statutory provision.
  2. I have concluded that a decision by a public authority in breach of section 11 of the Public Corporations Act is not thereby invalid. It follows that a contract entered into by a public authority in or in consequence of a breach of section 11 is not thereby invalid.
  3. There is no suggestion that there was collusion between the Authority and ACP for the purposes of the Authority entering into the Contract in contravention of section 11 of the Public Corporations Act. There is no suggestion of fraud, bad faith or any other circumstance capable of vitiating what is otherwise a valid contract. In these circumstances, assuming that the Authority entered into the Contract in breach of section 11, there is no juridical basis on which the Court could restrain the parties from performing the Contract. Ex hypothesis, the Contract is valid and enforceable as between the Authority and ACP. If one party failed to perform its obligations under the Contract, it would be liable to pay damages suffered by the innocent party in consequence of the breach and indeed to a suit for specific performance at the instance of the innocent party. There is no basis in private or public law on which the Court, at the instance of a stranger to the Contract, could grant an injunction interfering with these contractual rights and duties of the contracting parties.
  4. The High Court in Project Blue Sky Inc[239] contemplated the possibility of granting an injunction to restrain the ABA “from taking any further action based on its unlawful action”. This does not connote that a court can restrain the parties from performing a contract merely because it was entered into in contravention of a statutory provision that does not render the contract void. The standard made by the ABA was expressed to apply to future years from the 1998 calendar year onwards. The standard was declared by the High Court in April 1998 to have been unlawfully made. There was no inherent impediment to the Court restraining the ABA from maintaining the standard in future years.
  5. In Australian Broadcasting Corporation v Redmore Pty Ltd,[240] the ABC entered into a tenancy agreement with Redmore in breach of section 70(1)(a) of the Australian Broadcasting Corporation Act 1983 (Cth), which provided that “the Corporation shall not, without the approval of the Minister ... enter into a contract under which the Corporation is to pay or receive an amount exceeding $500,000...” When sued on the contract, the ABC contended that the contract was not enforceable against it because it had been made in breach of that provision. Mason CJ, Deane and Gaudron JJ in the High Court (Brennan and Dawson JJ dissenting) held that, on its proper construction, section 70(1)(a) did not render invalid a contract entered into in breach thereof. While that decision pre-dated Project Blue Sky Inc,[241] which reformulated the approach to determining whether a statutory provision invalidates action taken in breach thereof and referred to equitable relief based upon mere unlawfulness in a manner not addressed in Redmore, the decision in Redmore is inconsistent with the argument now advanced by the plaintiffs. Mason CJ, Deane and Gaudron JJ held that:
It follows from the foregoing that the preferable construction of s. 70(1) is that which was favoured by Bryson J. at first instance and by a majority of the Court of Appeal. ...On that construction of s. 70(1), the failure of the A.B.C. to obtain the prior approval of the Minister did not have the effect that the making of the contract was ultra vires the A.B.C. Nor did it have the effect that the contract was illegal or unenforceable. That being so, the courts below were correct in resolving the remaining issue in the appeal against the A.B.C.[242]
  1. The plaintiffs have been unable to cite a case in which a court has granted an injunction to restrain performance of a contract entered into by one party in breach of a statutory provision that does not render the contract void or unenforceable.
  2. The plaintiffs cite a series of cases in the United Kingdom involving contracts entered into by councils in breach of section 123(2) the Local Government Act 1972 (UK) (the Local Government Act), which prohibited a Council from disposing of land for consideration less than the best that could reasonably be obtained without the consent of the Secretary of State. In R (on the application of Structadene Ltd) v Hackney London Borough Council,[243] the Council accepted that it had entered into a contract to dispose of land in breach of section 123(2). The Council relied upon section 128 of the Local Government Act to validate the contract, but did not argue that otherwise section 123 did not render void a contract entered into in breach thereof. The purchaser under the contract was apparently not a party to the action. Elias J granted a declaration that the contract was invalid. Elias J did not grant any injunction restraining the Council or the purchaser from performing the contract. This decision is not authority for the plaintiffs’ proposition.
  3. In R (on the application of Lemon Land Ltd) v The Mayor and Burgesses of the London Borough of Hackney,[244] the facts were similar except that the Council argued that it had not breached section 123(2) of the Local Government Act and this was the only argument advanced in opposition to the relief sought. Lightman J rejected the Council’s argument and held that the resolution of the Council was unlawful and void. This decision is not authority for the plaintiffs’ proposition.
  4. In R (on the application of Ise Lodge Amenity Committee) v Kettering Borough Council,[245] the Council resolved that certain land be sold and local residents be given first opportunity to purchase it. A challenge by a voluntary organisation against the decision failed. Goldring J held that the decision did not breach section 123 of the Local Government Act. In any event, no contract had been entered into for the disposal of the land. This decision is not authority for the plaintiffs’ proposition.
  5. Other cases cited by the plaintiffs in which the court held or proceeded on the basis that the statutory provision rendered the decision void as opposed to merely unlawful do not support the plaintiffs’ proposition: Broadbent v Medical Board of Queensland;[246] Commissioner of Taxation of the Commonwealth of Australia v Futuris Corp Ltd.[247]
  6. Cases cited by the plaintiffs in which the court granted an injunction, or held or proceeded on the basis that it had power to grant an injunction, to restrain a statutory authority from taking unlawful steps before a contract or other separate juristic act came into existence do not support the plaintiffs’ proposition: No 2 Pitt Street Pty Ltd v Wodonga Rural City Council;[248] Holmes v Commissioner of Police;[249] Bateman's Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd.[250]
  7. On the hypothesis that the Authority entered into the Contract in breach of section 11 of the Public Corporations Act but such breach did not render the contract void, there is no basis for the grant of an injunction at the behest of the plaintiffs to restrain the parties from performing the Contract.

Did the Authority breach section 11?

  1. This question is related to the separate ground of challenge by the plaintiffs that, in deciding to enter into the Contract, the Authority failed to take into account a mandatory relevant consideration, namely the criteria under section 11. I return to the question of compliance with section 11 after addressing this separate ground of challenge.[251]

PART H: WEDNESBURY UNREASONABLENESS

  1. The fifth issue to be decided is whether the Contract Decision was a decision that no reasonable person could have made such that the decision is vitiated under the principle articulated by the Court of Appeal in Associated Provincial Picture Houses Ltd v Wednesbury Corp.[252]

Meaning of “unreasonableness” in the Wednesbury sense

  1. In Sharp v Wakefield[253], Lord Halsbury LC said:
...“discretion” means when it is said that something is to be done within the discretion of the authorities that that something is to be done according to the rules of reason and justice, not according to private opinion; according to law, and not humour. It is to be, not arbitrary, vague, and fanciful, but legal and regular.[254]
(Footnotes omitted)
  1. In Wednesbury,[255] Lord Greene MR (Somervell LJ and Singleton J agreeing) said:
It is true to say that, if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. That, I think, is quite right; but to prove a case of that kind would require something overwhelming, and, in this case, the facts do not come anywhere anything of that kind. I think Mr Gallop in the end agreed that his proposition that the decision of the local authority can be upset if it is proved to be unreasonable, really meant that it must be proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body could have come to. It is not what the court considers unreasonable, a different altogether.[256]
  1. In Minister for Immigration and Citizenship v Li,[257] French CJ said:
Every discretion has to be exercised, as Kitto J put it in R v Anderson; Ex parte Ipec-Air Pty Ltd, according to "the rules of reason"...
As Professor Galligan wrote in 1986 in Discretionary Powers: A Legal Study of Official Discretion, the requirement that officials exercising discretion comply with the canons of rationality means, inter alia, that their decisions must be reached by reasoning which is intelligible and reasonable and directed towards and related intelligibly to the purposes of the power. Those ...were reflected in the powers of the English Court of Chancery to control public bodies "if they proceed to exercise their powers in an unreasonable manner; whether induced to do so from improper motives or from error of judgment." ...
...
Beyond unreasonableness expressive of particular error however, it is possible to say, as Lord Greene MR said, that although a decision-maker has kept within the four corners of the matters it ought to consider "they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it." In such a case the court may interfere. ... After all the requirements of administrative justice have been met in the process and reasoning leading to the point of decision in the exercise of a discretion, there is generally an area of decisional freedom. Within that area reasonable minds may reach different conclusions about the correct or preferable decision. However, the freedom thus left by the statute cannot be construed as attracting a legislative sanction to be arbitrary or capricious or to abandon common sense.
...
The requirement of reasonableness is not a vehicle for challenging a decision on the basis that the decision-maker has given insufficient or excessive consideration to some matters or has made an evaluative judgment with which a court disagrees even though that judgment is rationally open to the decision-maker. ...[258]
(Footnotes omitted)

Hayne, Kiefel and Bell JJ said:

...in Minister for Aboriginal Affairs v Peko-Wallsend Ltd, Mason J considered that the preferred ground for setting aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to an irrelevant factor of no importance, is that the decision is "manifestly unreasonable". Whether a decision-maker be regarded, by reference to the scope and purpose of the statute, as having committed a particular error in reasoning, given disproportionate weight to some factor or reasoned illogically or irrationally, the final conclusion will in each case be that the decision-maker has been unreasonable in a legal sense.
...
In Peko-Wallsend, Mason J, having observed that there was considerable diversity in the application by the courts of the test of manifest unreasonableness, suggested that "guidance may be found in the close analogy between judicial review of administrative action and appellate review of a judicial discretion". House v The King holds that it is not enough that an appellate court would have taken a different course. What must be evident is that some error has been made in exercising the discretion, such as where a judge acts on a wrong principle or takes irrelevant matters into consideration. The analogy with the approach taken in an administrative law context is apparent.
As to the inferences that may be drawn by an appellate court, it was said in House v The King that an appellate court may infer that in some way there has been a failure properly to exercise the discretion "if upon the facts [the result] is unreasonable or plainly unjust". The same reasoning might apply to the review of the exercise of a statutory discretion, where unreasonableness is an inference drawn from the facts and from the matters falling for consideration in the exercise of the statutory power. Even where some reasons have been provided, as is the case here, it may nevertheless not be possible for a court to comprehend how the decision was arrived at. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.[259]
(Footnotes omitted)

and Gageler J said:

"It is, of course, true that, as a measure in fact of time, space, quantity and conduct, reasonableness is a concept deeply rooted in the common law: and so, in such cases, is the power of a court to say whether a particular decision of that fact is or is not within the bounds of reason". Review by a court of the reasonableness of a decision made by another repository of power "is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process" but also with "whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law".
The label "Wednesbury unreasonableness" indicates "the special standard of unreasonableness which has become the criterion for judicial review of administrative discretion". Expression of the Wednesbury unreasonableness standard in terms of an action or decision that no reasonable repository of power could have taken "attempts, albeit imperfectly, to convey the point that judges should not lightly interfere with official decisions on this ground."[260]
(Footnotes omitted)
  1. All of the parties cite Li as articulating the general principles relevant in the present case.

Source of obligation not to act “unreasonably” in the Wednesbury sense

  1. In Li, the High Court was addressing the exercise by the Migration Review Tribunal of a discretion conferred under the Migration Act 1958 (Cth) whether to grant an adjournment of a hearing. The High Court treated the obligation of the Tribunal not to act unreasonably in deciding the adjournment application as being sourced from statutory implication rather than the general law. French CJ said:
Every statutory discretion is confined by the subject matter, scope and purpose of the legislation under which it is conferred. ...
Every discretion has to be exercised, as Kitto J put it in R v Anderson; Ex parte Ipec-Air Pty Ltd, according to "the rules of reason". His Honour, paraphrasing Sharp v Wakefield, said:
"a discretion allowed by statute to the holder of an office is intended to be exercised according to the rules of reason and justice, not according to private opinion; according to law, and not humour, and within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself".
...
...That limiting case can be derived from the framework of rationality imposed by the statute. As explained by Lord Greene MR, it reflects a limitation imputed to the legislature on the basis of which courts can say that parliament never intended to authorise that kind of decision. ... the freedom thus left by the statute cannot be construed as attracting a legislative sanction to be arbitrary or capricious or to abandon common sense.
A connection between vitiating unreasonableness and an implied legislative intention was made by Brennan CJ in Kruger v The Commonwealth:
"[W]hen a discretionary power is statutorily conferred on a repository, the power must be exercised reasonably, for the legislature is taken to intend that the discretion be so exercised."
In similar vein, Gaudron J said in Abebe v The Commonwealth, in a passage quoted by Crennan and Bell JJ in SZMDS:
"[I]t is difficult to see why, if a statute which confers a decision-making power is silent on the topic of reasonableness, that statute should not be construed so that it is an essential condition of the exercise of that power that it be exercised reasonably, at least in the sense that it not be exercised in a way that no reasonable person could exercise it."[261]
(Footnotes omitted)

Hayne, Kiefel and Bell JJ said:

Because s 363(1)(b) contains a statutory discretionary power, the standard to be applied to the exercise of that power is not derived only from s 357A(3), but also from a presumption of the law. The legislature is taken to intend that a discretionary power, statutorily conferred, will be exercised reasonably.[262]
(Footnotes omitted)

and Gageler J said:

Brennan CJ cited Associated Provincial Picture Houses Ltd v Wednesbury Corporation for the proposition that "when a discretionary power is statutorily conferred on a repository, the power must be exercised reasonably, for the legislature is taken to intend that the discretion be so exercised". He explained the application of "Wednesbury unreasonableness" as a court acting on the "implied intention of the legislature that a [statutory] power be exercised reasonably" to hold invalid "a purported exercise of the power which is so unreasonable that no reasonable repository of the power could have taken the impugned decision or action".
...
Implication of reasonableness as a condition of the exercise of a discretionary power conferred by statute is no different from implication of reasonableness as a condition of an opinion or state of satisfaction required by statute as a prerequisite to an exercise of a statutory power or performance of a statutory duty. Each is a manifestation of the general and deeply rooted common law principle of construction that such decision-making authority as is conferred by statute must be exercised according to law and to reason within limits set by the subject-matter, scope and purposes of the statute.[263]
(Footnotes omitted)
  1. All parties in the present case accept that the “obligation” of the Authority not to act unreasonably, or rather the implication of “reasonableness as a condition of the exercise of statutory power”, is sourced in statutory implication from the Act and the Public Corporations Act which are in pari materia. The question whether similar principles apply to a decision-maker whose power is not sourced from statute does not arise in the present case.

Statutory implication that Authority not act “unreasonably”

  1. The defendants do not contend[264] that there is no statutory implication that the Authority not act unreasonably in the Wednesbury sense, although the scope and content of the obligation is to be ascertained by reference to the statute.
  2. Section 5 of the Act identifies the functions of the Minister, which include initiating, undertaking, supporting and promoting the development of land and housing in the public interest and encouraging and facilitating public and private sector investment and participation in the development of the State. Section 8 empowers the Governor to make regulations establishing a statutory corporation and specifying its functions. The Act anticipates that such a corporation will have functions similar to the Minister’s functions and this is effected by the Regulations. Section 21 of the Act confers on such a corporation powers necessary or expedient to its performing its functions. These provisions give rise to an implication that a statutory corporation is obliged to act reasonably in the exercise of its powers so as to perform its functions.
  3. This implication is reinforced and the obligation given more specific content by section 11 of the Public Corporations Act which requires the corporation to perform its commercial functions in accordance with prudent commercial principles consistent with its functions and perform its non-commercial operations in an efficient and effective manner consistent with the requirements of its charter.

Scope of relevant material

  1. There is a dispute between the plaintiffs and the defendants as to the scope of the material upon which the question whether the Contract Decision was unreasonable in the Wednesbury sense is to be determined. The defendants contend, in the context of their primary contention that the Contract Decision was made by Cabinet, that the relevant material is confined to the material actually before Cabinet for that purpose, namely the September Cabinet submission (including the attached ACP proposal) and the December Cabinet submission (including the attached Draft Contract). The plaintiffs contend that, if the Contract Decision was made by Cabinet, the relevant material extends to any documents or information available to Cabinet and this in turn encompasses any documents or information in the possession of the Authority. The parties adopt various intermediate positions in the alternative to their primary contentions in this regard.
  2. I have concluded above that the decision to enter into and execute the Contract was made by the Chief Executive. This means that, to the extent that the Chief Executive’s decision is challenged, the relevant material is the material before (on the defendants’ contention) or available to (on the plaintiffs’ contention) the Chief Executive. However, I proceed initially on the assumption that the only relevant material to be considered is the material conceded by the defendants to be relevant, namely the September and December Cabinet submissions and their attachments and refer to the Chief Executive using the neutral term “the decision-maker”.

Assessment of Wednesbury unreasonableness

  1. The plaintiffs rely upon a combination of factors in contending that the Contract Decision was unreasonable in the Wednesbury sense. The plaintiffs contend that the decision-maker was ignorant of matters that any reasonable person in his position must necessarily have ascertained before being in a position to make a rational decision to enter into the Contract. The plaintiffs contend that the decision-maker:
    1. did not compare the advantages and disadvantages of entering into the Contract with engaging in a competitive or public marketing and sales process;
    2. did not explore or consider the expressed or potential interest of third parties in purchasing the Land as an alternative to ACP potentially doing so;
    3. did not obtain or seek a reliable relevant valuation of the Land the subject of the Contract;
    4. granted an option to ACP that did not oblige ACP to purchase land but precluded marketing or sale of the Land to third parties;
    5. ignored the resolution of the Board to recommend rejection of the ACP offer and instead offer the Land to the market for sale in a transparent and open manner; and
    6. did not compare the value of the ACP offer with the value of engaging in an alternative marketing and sales process.
  2. The matters relied upon by the plaintiffs are inter-related and the plaintiffs rely upon their cumulative effect. It is necessary, however, to consider them individually before considering their cumulative effect.
  3. The first three matters raised by the plaintiffs proceed on the premise that it was appropriate for the decision-maker to assume that ACP would exercise at least some if not all of the options and purchase the Land, ie that the decision-maker was considering a sale as opposed to grant of options to buy. The last three matters challenge that premise. I consider the matter initially on the premise that it was appropriate for the decision-maker to consider a sale.

Sale of land

Competitive marketing and sales processes

  1. The ACP proposal attached to the September Cabinet submission described the land as “arguably the most strategically positioned industrial land development opportunity in the Australian market” and as being “situated within one of the most significant road infrastructure projects in Australia”. It referred to the proximity to the CBD, Outer Harbour, the International airport and rail networks.[265] The December Cabinet submission said that the Land had been identified in the 30 Year Plan as a “Key Employment Area”.[266]
  2. The September Cabinet submission said that, as an unsolicited offer, the ACP proposal did not provide an opportunity for market testing demand or pricing for the land.[267] It referred to the Pricing & Marketing Policy, implying that it required the Authority to engage in competitive processes for the disposal of land and said that the Authority was entitled to waive this in certain circumstances without identifying those circumstances or exploring the desirability of doing so.[268] The Synopsis identified the fact that the proposal did not provide an opportunity for market testing demand or pricing for the land as a key element or implication that required further consideration and clarification before the ACP proposal could be fully assessed.[269]
  3. The December Cabinet submission reiterated the reference to no market testing of demand or pricing having been undertaken[270] and the Treasury Minute attached to it identified that the Board had resolved to recommend rejection of the ACP offer and instead offer the Land to the market for sale in a transparent and open manner because, inter alia, of a lack of market testing to determine the competitively derived market value of the Land.[271] The submission said that the Board noted current Authority policies contemplate potential off-market transactions where strong justification exists but the Authority did not have the expertise in the oil and gas sector required to assess whether there was sufficient merit in the ACP proposal to warrant an off-market transaction. Beyond these references, the submission did not address the alternative of marketing and selling the Land under a competitive or public process. It did not address any advantages or disadvantages of accepting the revised ACP offer compared to marketing the Land for sale.
  4. Most land, whether industrial, commercial or residential, is marketed for sale by a form of open competitive sale process such as tender, auction, expressions of interest or sale by private treaty. It is difficult to avoid a conclusion that it would be imprudent or unreasonable to sell land by accepting an unsolicited offer without first exploring the merits and likely results of engaging in a competitive marketing and sales process.

Third party interest in the land

  1. The December Cabinet submission said that when ACP made its initial proposal the Authority had been working with Incitec Pivot Limited (IPL) regarding access to portions of the Land[272] and 11 hectares identified to accommodate the relocation of IPL had now been excluded from the Land.[273] The financial tables showed revenue in the current year which could only be attributed to projected revenue from a sale of that 11 hectares to IPL.[274]
  2. The December Cabinet submission said that the Authority had also been working with Metcash regarding access to portions of the Land[275] and the September Cabinet submission said that the Authority was in negotiation with Metcash for Metcash to acquire 12 to 14 hectares of the Land.[276]
  3. It is evident from the importance of filling the Land identified in the September and December Cabinet submissions and from the content of ACP’s August Proposal that entities involved in the soil management industry, being ResourceCo’s competitors, had a natural interest in participating in a joint venture with a developer to fill and develop the Land.
  4. The December Cabinet submission said that the Minister for Transport and Infrastructure had recently received letters from industry expressing interest in the Land based on hearsay about a potential sale of the Land.[277]
  5. The nature, extent and significance of third party interest in purchasing, filling and developing the Land as an alternative to acceptance of the ACP proposal was not otherwise explored in the December Cabinet submission.
  6. It is difficult to avoid a conclusion that it would be imprudent or unreasonable to sell land by accepting an unsolicited offer without first exploring the nature, extent and significance of alternative interest in the Land.

Valuation

  1. The September Cabinet submission identified the Dean Rifle Range as comprising 267 hectares[278] and said that the Council had instituted proceedings in the Supreme Court seeking compensation for the acquisition of its 50 percent interest in that land.[279] The Draft Contract attached to the December Cabinet submission identified the date of the acquisition as February 2010.[280] The December Cabinet submission said that the Authority’s valuer valued the compensation for the Council’s 50 percent interest at $7 million and the Council’s valuer valued it at $29 million.[281]
  2. The September and December Cabinet submissions both said that the valuation work for the Dean Rifle Range suggested an extrapolated value for the whole of the land the subject of the ACP proposal of between $19 million and $59 million.[282]
  3. Neither Cabinet submission identified the method of valuation used by the valuers for the Dean Rifle Range or the assumptions as to future development made by them in undertaking those valuations. It is implicit from the references in both submissions to up to 200 hectares of the total land being required for stormwater management purposes[283] that the valuers assumed that not all of the land comprising the Dean Rifle Range would be developed.
  4. On the face of the two Cabinet submissions, without having regard to the actual valuations undertaken by Mr Taylor and Mr Southwick, the valuations of the Dean Rifle Range were incapable of being regarded as relevant or reliable valuations of the Land as at December 2013 under the terms and conditions of the Draft Contract. This is due to substantial differences in timing, land areas and terms of the posited transactions.
  5. The relevant date for the Dean Rifle Range valuations was February 2010 when the Council’s 50 percent interest was compulsorily acquired. The relevant dates for the ACP proposal were when settlement would occur for the three stages if ACP exercised the successive options. Settlement was not likely to occur for Stage 1 until 2015 or 2016 because ACP had until 31 December 2014 to exercise the First Option and settlement was then conditional on a Plan of Division being deposited, 230 hectares of the land being rezoned “General Industry” and ACP obtaining all planning, environmental and other regulatory approvals to develop the land for industrial use. Settlement was not due for Stage 2 until five years later, being 2020 or 2021 and for Stage 3 until a further 4 years later, being 2024 or 2025. The present value of future monies is always less than their face, or undiscounted, value and the major differences in timing between the Dean Rifle Range valuations and the ACP proposal entailed that they were simply not comparable.
  6. Secondly, the December Cabinet submission referred to the 30-Year Plan which identified the following action in relation to Gillman: “provide infrastructure, improve zoning and fill land to bring employment lands to market”.[284] ACP’s August Proposal attached to the September Cabinet submission identified the need for the site to be filled with filling materials, saying that the site would require 2 million tonnes per year of fill materials at ACP’s proposed rate of development.[285] The September Cabinet submission said that competition obligations should be imposed on ACP because its proposal included reference to inter alia ResourceCo and ACP would likely give priority access to ResourceCo for land reclamation.[286] This suggests material changes had occurred in relation to the availability and cost of fill materials between February 2010 and December 2013 capable of having a major impact on the cost of development and hence the value of the Land. This also suggests that companies in the same business as ResourceCo may have a like interest to that of ResourceCo in forming a joint venture with a developer to acquire, fill and develop the land, which would impact on a valuation of the Land.
  7. Thirdly, the Cabinet submissions referred to recent third party interest in the land. The December Cabinet submission referred to interest by IPL in 11 hectares, Metcash in 12 to 14 hectares and the Minister for Transport and Infrastructure having recently received letters from industry expressing interest in the land. This third party interest post-dated February 2010 and was likely to impact on the valuation of the Land. The Cabinet submissions were silent on any other interest that had been expressed by potential purchasers of the Land over the previous four years. Over the period since February 2010, demand for the Land could have changed significantly impacting on its valuation.
  8. Fourthly, the valuations of the Dean Rifle Range only valued approximately two thirds of the total area of the land the subject of the ACP proposal. It was likely that the value of the total area was not simply a figure that could be derived from valuations of the smaller area on a pro-rated basis. While a valuation of the larger area might have produced either a higher or lower rate per square metre than for the area of the Dean Rifle Range, in the absence of obtaining an up-to-date valuation of the entire area, the decision-maker was in ignorance as to this question.
  9. Fifthly, under the Draft Contract ACP would only be obliged to settle on the purchase of any land in respect of which it had exercised an option to purchase if Settlement Conditions were first satisfied, including that at least 230 hectares of the Land had been rezoned “General Industry” and all planning, environmental and other regulatory approvals had been obtained to develop the land to be purchased for industrial use.[287] A change of zoning and grant of regulatory approvals for development for industrial use would substantially enhance the value of the land to the purchaser. In contrast, the valuations for the purpose of the acquisition of the Council’s interest in February 2010 must have been undertaken in circumstances in which it was unknown whether these zoning changes would be made or regulatory approvals obtained.
  10. Sixthly, the discrepancy between the two Dean Rifle Range valuations as disclosed by the December Cabinet submission was vast. One valuation was more than three times the other valuation. It may be expected that opinions of two valuers will typically differ in the order of up to 10 or 20 percent or, in a complex valuation, perhaps in the order of up to 50 percent. In those circumstances, in a general sense, each valuation gives confidence that the other valuation does not contain major vitiating errors. When the discrepancy between the valuations is as large as was the case here, a decision-maker could have no confidence that either valuation was of the correct magnitude. On the contrary, prima facie at least one valuation must be the subject of major vitiating errors.
  11. Finally, the extrapolations from the two valuations contained in the Cabinet submissions involved average values of $5 per square metre and $15 per square metre. ACP’s unsolicited offer was $30 per square metre. That in itself throws doubt on the relevance and reliability of the valuations to value the Land for the purpose of assessing the ACP offer.

Overall assessment of sale

  1. The decision-maker did not compare the advantages and disadvantages of entering into the Contract with engaging in a competitive marketing and sales process; did explore the interest of third parties in purchasing the Land as an alternative to ACP doing so; nor obtain or seek a reliable relevant valuation of the Land the subject of the Contract.
  2. This entails that the decision-maker was ignorant of matters that may be regarded as pre-requisites to an informed, prudent or rational decision. Before turning to the relevance of the ACP proposal involving the grant of options to purchase rather than a contract for sale of the Land, I address whether the decision-maker’s ignorance of what appear to be crucial matters was ameliorated by the comparative assessment in the Cabinet submissions of the potential return to the State from the sale of the Land to ACP compared with the potential return on the Authority itself undertaking development of part of the Land or was ameliorated by independent advice taken by the Authority from a commercial land agent.

Return from development by the Authority

  1. The September and December Cabinet submissions both contained analyses of the projected financial return to the State by accepting the ACP proposal compared to the Authority itself developing a portion of the Dean Rifle Range.
  2. The September Cabinet submission said that the Authority had completed a structure plan for the area in 2009, which identified up to 200 hectares of the 417 hectares subject of the ACP proposal as not supporting industrial development.[288] It said that the Department for Environment, Water and Natural Resources would only support development in line with the 2009 structure plan.[289] It said that a significant body of independent assessment of the Land, including the Dean Rifle Range acquisition process, had estimated that up to 200 hectares was required to manage stormwater deriving from the north-western metropolitan area.[290]
  3. The December Cabinet submission said that the Authority had modelled developing 195 hectares of the Land itself which was contained within the Dean Rifle Range which in turn comprised about two thirds of the area of the Land. It reiterated that the Authority considered that a substantial portion of the total land was non-developable as being required for stormwater management and levee banks.[291]
  4. The December Cabinet submission showed forecast gross profit as a result of the Authority’s own development of 195 hectares of the Land (Scenario 1).[292] The submission contained a comment that the figure might understate future costs but did not quantify any potential cost increases or give any indication of their order of magnitude if they transpired. It compared this with forecast gross profit as a result of accepting the ACP proposal on two different scenarios:
    1. a “reasonable best case” which assumed that ACP purchased all 407 hectares giving one gross profit (Scenario 2A); and
    2. a “potential worst case” which assumed that ACP purchased 207 hectares giving a much lower gross profit (Scenario 2B).
  5. Scenario 2A which assumed that 407 hectares were saleable as having development value was not comparable with Scenario 1. Scenario 2B was broadly comparable with Scenario 1.
  6. The December Cabinet submission made adjustments to the gross profit figures under these scenarios to reflect increased land tax the State would receive and interest costs the Authority would save under Scenarios 2A and 2B compared to Scenario 1 and other minor adjustments to produce a total impact under Scenarios 2A and 2B compared to Scenario 1. These showed a net positive impact under Scenario 2A and a net negative impact under Scenario 2B compared to Scenario 1.
  7. Because Scenario 2A was not comparable with Scenario 1, there was no basis disclosed in the December Cabinet submission for concluding that the State would receive a better financial return by accepting the ACP proposal.
  8. The analysis of the projected financial return to the State contained in the December Cabinet submission did not demonstrate that the State would necessarily receive a lower financial return as a result of acceptance of the ACP proposal and the comparison with development by the Authority itself is not a negative feature against acceptance. Equally it is not a positive feature capable of avoiding a conclusion that the decision was unreasonable in the Wednesbury sense if that is otherwise the necessary conclusion.

Advice from commercial property agent

  1. It is well known that major commercial property agents have expertise in determining the most advantageous method of marketing and selling industrial land, have general market knowledge of potential purchasers and have general market knowledge of prices achieved and achievable for land.
  2. The Cabinet submissions do not refer to the Authority having sought or obtained any advice from a commercial property agent about these matters. This is not a factor capable of rendering of the decision unreasonable in the Wednesbury sense. However, advice from a commercial property agent might have provided information on the likely results of engaging in a competitive market process, on likely levels of interest from third parties and, within limits, on the value of the Land. In the absence of the Authority seeking and obtaining such advice, the decision-maker remained largely ignorant about these underlying matters.

Option as opposed to sale

Inherent difference between option and sale

  1. The Draft Contract did not impose any obligation on ACP to purchase the Land. It gave to ACP the Stage 1 Option exercisable by 31 December 2014,[293] in which event settlement would not take place until satisfaction of the Settlement Conditions in 2015 or 2016. Upon settlement of the Stage 1 Option, ACP had the right to exercise the Stage 2 Option within five years and independently to exercise the Stage 3 Option within nine years.
  2. The Authority was precluded from dealing with any part of the Land, including marketing or selling it to third parties, until 31 December 2014 and then until around 2024 if ACP exercised the Stage 1 Option.
  3. There is a fundamental distinction from the point of view of a land owner between a contract binding a purchaser to buy the land and a contract giving a potential purchaser an option to buy it. A contract for the sale of land has a value to the owner measured by reference to the purchase price payable under the contract compared to the value otherwise obtainable for that land (whether by retention or sale to a third party). A contract giving a potential purchaser an option to buy land does not, in the absence of an option price, necessarily have any affirmative value to the owner and potentially has a detrimental value by precluding the owner from disposing of the land during the currency of the option.
  4. The ACP proposal was put to the Authority on the basis that ACP would act as project manager for a development company to be incorporated and to be owned by unnamed and perhaps yet to be ascertained investors.[294] ACP itself was evidently a company formed for the purpose of making the proposal and, if the proposal were to be accepted, acting as project manager. ACP itself was not going to purchase or develop the Land. In effect, the Draft Contract gave to ACP an option to find investors ready, willing and able to purchase and develop the Land. The commercial nature of the Draft Contract was quite different to a contract giving an option to a major entity which itself had the intention, subject to due diligence, and capacity to purchase and develop the Land.
  5. The September and December Cabinet submissions did not address the differences from the perspective of the Authority between a sale contract and an option contract or the advantages and disadvantages to the Authority of entering into an option contract as opposed to a sale contract.

Attitude of the Board

  1. The fact that the Board had recommended that the ACP offer be rejected and instead the Land offered to the market for sale in a transparent and open manner was identified in the Treasury Minute attached to the December Cabinet proposal.[295] The Treasury Minute also referred to the Board having identified as a key risk and one of the reasons for making its resolution the lack of market testing to determine the Land’s competitively derived market value.[296]
  2. The December Cabinet submission itself made no reference to this Board resolution, nor did it identify any reason why the Board’s views should be disregarded or why the ACP offer should be accepted instead of the Land being offered to the market for sale.

Relevant comparison of value

  1. The December Cabinet submission did not compare the value to the Authority of granting the Options to ACP as compared to the value to the Authority of unencumbered dealings with third parties in connection with the sale and development of the Land.

Overall assessment of decision

  1. The question is not whether the decision to enter into the Contract was good or bad but whether it was so irrational that no reasonable decision-maker could have made it.
  2. The decision-maker did not assess the benefits and prospects of proceeding to market the Land in an open and competitive manner as an alternative to accepting the ACP proposal, did not have an understanding of the nature and extent of alternative purchasers and developers of the Land, did not have a relevant or reliable valuation of the Land, did not have independent advice concerning the basis on which to assess the alternatives to accepting the ACP offer and did not have a basis on which to compare the value of granting the Options to ACP as compared to the value of unencumbered dealings with third parties in connection with the sale and development of the Land. The decision-maker did not have a basis to consider it more beneficial to grant the Options to ACP than to engage in a competitive marketing and sales process.
  3. The defendants point to the analysis in the Cabinet submissions of larger economic and social benefits to the State than the direct financial return from the sale if ACP developed the Land to become an oil and gas hub in particular or as industrial allotments in general. They point to the obligations to develop the Land assumed by ACP under the Contract if it exercised the Options, which would not necessarily be assumed by an alternative purchaser. The defendants contend that the functions of the Authority extended to public interest functions,[297] such that a decision to accept the ACP proposal did not necessarily need to maximise the financial return to the Authority or the State. I accept that submission so far as it goes. However, the Cabinet submissions did not compare the larger economic and social benefits of selling the Land to ACP compared to marketing it for sale to other developers. They did not factor into an assessment of larger economic and social benefits the fact that ACP was not obliged to purchase the Land, that ACP did not have the intention or capacity of purchasing or developing the Land or that, if the ACP proposal were accepted, purchase and development of the Land would be contingent on investors being found who were prepared to do so. They did not assess the detriment of the Land being tied up for 12 months in the first instance and the balance of the Land being tied up for a further nine to eleven years after exercise of Option 1 with no obligation on ACP or the nominated purchaser to purchase or develop the balance of the Land. They did not weigh the comparative prospective larger economic and social benefits against the direct financial returns on the scenario of accepting the ACP proposal as against alternative scenarios upon marketing the land for sale under competitive conditions.
  4. The decision by the Chief Executive to enter into the Contract was made in ignorance of matters that were fundamental pre-requisites to making an informed, prudent or rational decision. It was made in disregard of prudent commercial principles. It was an irrational decision and a decision that no reasonable person in the position of the decision-maker could rationally have made.
  5. I would have reached the same conclusion if the substantive decision to enter into the Contract had been made, as the defendants contend, by the Minister for Urban Development or by Cabinet, but I have concluded that Cabinet made no legally relevant decision at all and the Minster only gave approval in principle for the Chief Executive to make the substantive decision.

Other information before the Chief Executive

  1. I have reached the above conclusion that the decision of the Chief Executive to enter into the Contract was unreasonable in the Wednesbury sense on the assumption that the defendants are correct that relevant materials are confined to the September and December Cabinet submissions and their attachments.
  2. The plaintiffs contend, in the context of their case that the substantive decision-maker was Cabinet, that Cabinet had constructive knowledge of all information known to the Authority and such information is to be taken into account in assessing whether the decision was unreasonable in the Wednesbury sense. I reject that contention. The question is to be assessed on the basis of the knowledge of the decision-maker. Evidence of such knowledge may be direct or inferential. However, as already appears, if the decision-maker does not inquire into a matter about which any reasonable decision-maker in that position would inquire, the lack of inquiry is to be taken into account in assessing whether the decision was unreasonable in the Wednesbury sense.
  3. I find as a matter of inference that the Chief Executive had before him additional information beyond the September and December Cabinet submissions and their attachments.

Competitive marketing and sales processes

  1. The September Cabinet submission referred to the Authority’s Pricing & Marketing Policy. Mr Hansen authorised both Cabinet submissions. I infer that, by reason of his position, the Policy’s importance and the references in the submissions to it, Mr Hansen was aware of the existence and content of the Policy. The Policy required that, as a general principle, whenever practical, sale of Authority property be undertaken by a competitive sales process. It required that normally an up to date valuation be obtained and gave the Chief Executive a discretion to permit reliance on a valuation more than six months old by reference to defined criteria.
  2. There was no objective reason why the general principle that sale be undertaken by a competitive sales process should not have been applied to the Land. Reliance on the valuations valuing the Dean Rifle Range as at February 2010 was contrary to the Policy and there was no objective reason for the Chief Executive to consider them appropriate for this purpose.

Third party interest in the land

  1. The December Cabinet submission referred generically to recent third party interest in the Land. Both of ResourceCo’s competitors, namely IWS and ARR, had expressed interest in the Land in March-April 2013. I infer that, by reason of his position, their importance and the generic references in the submission to third party interest, Mr Hansen was aware of those expressions of interest given that the Land represented almost 40 percent of the Authority’s landholdings.
  2. In November 2013, E & A Limited wrote to the Minister for Urban Development requesting that, if the Land was available for sale, E & A Limited be afforded an opportunity to buy all or part of it. Given that the Land represented almost 40 percent of the Authority’s landholding and the letter was written to the Chief Executive’s Minister, I find that he was aware of this expression of interest.
  3. Knowledge of this third party interest reinforces my conclusion that the Chief Executive’s decision was unreasonable in the Wednesbury sense.

Value

  1. The valuations by Mr Southwick and Mr Taylor of Lots 31, 500 and 107 were referred to extensively (although their names were not disclosed) in both Cabinet submissions. The Council had instituted proceedings in the Land and Valuation Court seeking additional compensation for the compulsory acquisition of its 50 percent interest in that land. I infer that, by reason of his position, their importance and the references in the submissions to them, Mr Hansen was aware of the content of those valuations. As a result, he was aware that the valuations of Lots 31, 500 and 107 by the valuers were $42 million and $13 million respectively. This entails one valuation being more than three times the other. This does not affect my conclusion expressed above by reference to the extrapolation from those valuations undertaken in the two Cabinet submissions.
  2. Lot 202 comprising 16 hectares had been sold to a company associated with ResourceCo with the transfer taking place in December 2010. The Authority had agreed a heads of agreement to transfer Lot 201 comprising 16 hectares to ARR before the September Cabinet submission. The Authority was projecting the sale of 11 hectares to IPL as reflected in the December Cabinet submission. I infer that, by reason of his position, their importance and the references in the Cabinet submissions to two of them and in ACP’s August proposal to the third, Mr Hansen was aware of them and of the price or projected price for each transaction or projected transaction. This reinforces my conclusion that the Chief Executive’s decision was unreasonable in the Wednesbury sense.

Conclusion

  1. The matters referred to in the previous paragraphs do not impeach my conclusion at [555] above that the decision by the Chief Executive to enter into the Contract was a decision that no reasonable person in his position could rationally have made. They reinforce my conclusion.

PART I: FAILURE TO TAKE INTO ACCOUNT RELEVANT FACTOR

  1. The plaintiffs contend that, in making the Contract Decision, the decision-maker failed to take into account a relevant factor that he was bound to take into account and the decision is thereby vitiated.
  2. The factor identified by the plaintiffs is the obligation imposed by section 11 of the Public Corporations Act upon the Authority.

A mandatory factor

  1. It is well established that this ground of judicial review is only available when a factor is required by statute, expressly or by necessary implication, to be taken into account by the decision-maker in making the decision.[298]
  2. In Minister for Aboriginal Affairs v Peko-Wallsend Ltd,[299] Mason J (Gibbs CJ and Dawson JJ agreeing) said:
The failure of a decision-maker to take into account a relevant consideration in the making of an administrative decision is one instance of an abuse of discretion entitling a party with sufficient standing to seek judicial review of ultra vires administrative action. ...Together with the related ground of taking into account irrelevant considerations, it has been discussed in a number of decided cases, which have established the following propositions:
(a) The ground of failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration which is bound to take into account in making a decision.
(b) What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statute expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors – and in this context I use this expression to refer to the factors which the decision-maker is bound to consider – are not expressly stated, they must be determined by implication from the subject-matter, scope and purpose of the Act.
(d) The limited role of a court in reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not a function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has invested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned.
It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power.[300]
(Citations omitted)

and Brennan J (Deane J agreeing) said:

... The Court has no jurisdiction to visit the exercise of a statutory power with invalidity for failure to have regard to a particular matter unless some statute expressly or by implication requires the repository of the power to have regard to that matter or to matters of that kind as a condition of exercising the power. The principle was stated by Deane J. in Sean Investments v. MacKellar, where his Honour cited the judgment of the English Court of Appeal in Elliott v. Southwark Council:
“... The ground of failure to take into account a relevant consideration will only be made good if it is shown that the decision-maker has failed to take into account a consideration which he was, in the circumstances, bound to take into account for there to be a valid exercise of the power to decide.”
Apart from express provision, a statute may impliedly require the repository of a power in deciding on its exercise to have regard to certain considerations. The subject-matter, scope and purpose of the statute must be considered to determine whether the repository is bound to have regard to any and what matters.[301]
(Citations omitted)
  1. Section 11(1) of the Public Corporations Act provides:
A public corporation must perform its commercial operations in accordance with prudent commercial principles and use its best endeavours to achieve a level of profit consistent with its functions.
  1. Section 11(1) is expressed in mandatory terms. A public corporation is required to:
    1. perform its commercial operations in accordance with prudent commercial principles consistent with its functions; and
    2. use its best endeavours to achieve a level of profit consistent with its functions.
  2. The defendants contend that section 11(1) does not impose any requirement upon public corporations, but is merely exhortatory or aspirational. I reject that contention. Section 11(1) is expressed in active and mandatory terms. It does not merely identify ideals to which it is hoped public corporations will aspire. If that had been the legislative intention, it would have been expressed in very different terms. It is clear that the legislature intended to impose a duty upon public corporations and did not intend that they be free to disregard prudent commercial principles or the use of best endeavours to achieve a level of profit consistent with their functions.

Regard to prudent commercial principles

  1. On the proper construction of section 11(1), the Authority was required when deciding whether to enter into the Contract to have regard to prudent commercial principles provided they were consistent with its functions. If the Authority did have regard to those principles, it was a matter for the Authority to determine the weight to be given to those principles in the context of the performance of its functions which included public interest matters as well as commercial functions.
  2. To prove a failure to have regard to those principles requires more than simply that the decision was not a prudent or commercial decision or that the decision was not in accordance with prudent commercial principles. It must be shown that the decision-maker did not have regard to those principles.
  3. Section 11(1) proceeds on the basis that “prudent commercial principles” are objectively discernible. Acting in accordance with prudent commercial principles requires at least that a decision-maker identify the available alternatives, identify the relative advantages and disadvantages of those alternatives, and make a rational decision by reference to them. More generally, acting in accordance with prudent commercial principles requires a decision-maker to make a rational decision.
  4. For the reasons given in Part H, the decision of the Chief Executive was not a rational decision. The alternative course of action of marketing and selling the Land in an open and competitive process was not considered beyond being identified as an alternative, nor were its advantages and disadvantages relative to accepting the ACP offer considered. No consideration was given to the benefits or detriments of granting options to ACP compared to engaging in an open or competitive marketing process to sell the Land. The Chief Executive failed to have regard to prudent commercial principles in deciding to enter into the Contract.
  5. The Chief Executive was entitled, if not required, to have regard to the functions of the Authority which included public interest functions. Those considerations included the prospect of the Land being developed for industrial purposes in the public interest to promote growth in employment and the South Australian economy. However, no consideration was given to the prospect of achieving those functions by granting options to ACP compared to engaging in an open or competitive marketing process to sell the Land. Nor was any weighing of commercial factors and non-commercial factors undertaken. The Chief Executive failed to have regard to prudent commercial principles consistent with the Authority’s functions in deciding to enter into the Contract.
  6. The Chief Executive did not merely make a decision not in accordance with prudent commercial principles consistent with the Authority’s principles, he did not have regard to or take into account those principles.

Breach of section 11

  1. It follows from my conclusion that the Chief Executive failed to have regard to prudent commercial principles that his decision was not made in accordance with prudent commercial principles. The Authority’s decision to enter into the Contract was therefore made in breach of section 11 of the Public Corporations Act and was thereby unlawful.

Irrelevant considerations

  1. The plaintiffs plead that the Chief Executive took into account irrelevant considerations such as the prospect of the Land being developed for industrial purposes in the public interest to promote growth in employment and the South Australian economy.
  2. In closing address, the plaintiffs accept that it would have been open to the decision-maker to take into account each of the matters alleged in the pleading to be irrelevant but the plaintiffs contend that the identification by the decision-maker of the pleaded factors highlights that the decision-maker did not address the correct question and did not have regard to prudent commercial principles. Given this concession, it cannot be said that the Chief Executive had regard to irrelevant factors and this ground of review fails but this does not affect the failure of the Chief Executive to have regard to relevant factors.

PART J: CONSEQUENCES OF VITIATION OF DECISION

  1. The plaintiffs contend that, if the Contract Decision was vitiated because it was made without authority, made in breach of section 11 of the Public Corporations Act, so unreasonable that no reasonable decision-maker could have made it or without the decision-maker taking into account a relevant factor, the Contract is void. The defendants take issue with that contention.

Decision made without authority

  1. The plaintiffs’ first contention is that no one having power or authority made a decision to enter into the Contract and the Chief Executive executed it without authority. I have rejected that contention for the reasons given in Part F.
  2. If I had accepted the plaintiffs’ contention, the question would have arisen whether the Contract was thereby rendered void. The plaintiffs contend that, absent power or authority to enter into the Contract, no contract came into existence and the Contract should be declared void. The first and second defendants contend that the question is to be answered as a matter of statutory construction of the Act and in particular section 19 applying the principles articulated by the High Court in Redmore[302] and Project Blue Sky Inc. [303] The third defendant contends that the question is to be answered by applying general law principles. The defendants each contend that, applying the respective principles they say are applicable, the Contract is not void.
  3. For reasons that will appear, I accept the first and second defendants’ contention that the question is to be answered as a matter of statutory construction of the Act, but I first address the third defendant’s contention that the Contract is not rendered void for want of authority on the assumption that the question is to be answered by applying general law principles.

Private law principles

  1. The third defendant contends that, assuming the application of private law principles, if the Chief Executive executed the Contract without authority, it was merely voidable and not void. The third defendant contends that, under the laws of agency and contract, a contract made by a person purportedly acting as agent for a principal is valid and binding as between the other party and the principal unless and until it is avoided by the principal within a reasonable time of becoming aware of the existence of the contract. I reject that contention.
  2. It is a fundamental principle of contract law that a person (the principal) only becomes a party to a contract entered into by the principal or by a person acting within the scope of authority conferred by the principal on that person.[304] Authority for this purpose must be actual authority (although it can usually be conferred retrospectively under the doctrine of ratification[305]) or be found as a result of an estoppel (ostensible authority).[306]
  3. When the principal is a body corporate, the body corporate only becomes a party to the contract if it is entered into by the directing mind and will of the body corporate[307] or an officer or agent acting within the scope of his or her (actual or ostensible) authority.[308] Acts by an agent or delegate purportedly on behalf of the Crown are only binding and effective if the agent or delegate is authorised to so act.[309]
  4. The doctrine of ratification is fundamentally inconsistent with the third defendants’ contention. The doctrine of ratification was succinctly described by Tindall CJ in Wilson v Tumman and Fretson[310] as follows:
That an act done, for another, by a person, not assuming to act for himself, but for such other person, though without any precedent authority whatever, becomes the act of the principal, if subsequently ratified by him, is the known and well established rule of law. In that case the principal is bound by the act ... to the same extent as by, and with all the consequences which follow from, the same act done by his previous authority.[311]
  1. It is clear from the reference to “becomes” in the formulation of the rule that, although it operates retrospectively, the purported principal only becomes bound if and when the principal ratifies.[312] In Davison v Vickery’s Motors Ltd (in liq),[313] Issaacs J said:
On ratification, and not before, the agreement is as a general rule deemed by a fiction to have been made by his antecedent authority to the person actually making it.[314]
(Emphasis added)
  1. The doctrine of ratification requires a positive act by which the principal unequivocally adopts the contract.[315] The act must be done with full knowledge of the facts and circumstances relating to the agent’s authorised act.[316] Ratification must be effected within a reasonable time of the unauthorised act.[317] The onus of proof of ratification lies on the person asserting ratification.[318] Each of these requirements is inconsistent with the contract being binding unless repudiated by the principal and demonstrates that there is no contract with the principal unless and until there is an affirmative act of ratification.
  2. The third defendant refers to the decision of the English Court of Appeal in Bolton Partners v Lambert[319] as authority for the proposition that an act of ratification is effective as having retrospective effect notwithstanding that before the act of ratification the other party has repudiated the contract. The third defendant contends that this principle is consistent only with the contract being valid unless and until the principal elects to avoid it for want of authority.
  3. In Bolton Partners v Lambert,[320] on 8 December 1886 Lambert wrote to Scratchley, the managing director of Bolton Partners, offering to purchase its factory. On 13 December 1886, Scratchley replied accepting the offer on behalf of the company. On 13 January 1887, Lambert wrote to the company repudiating the agreement on the ground that he had been misled by misrepresentations as to the value of the factory. On 28 January 1887, the board of directors of the company ratified the agreement made by Scratchley. It was held that Scratchley had not had authority in December 1886 to enter into the agreement but, on ratification by the board, the contract came into existence retrospectively notwithstanding the intervening repudiation by Lambert. Cotton LJ said:
The rule as to ratification by the principal of acts done by an assumed agent is that the ratification is thrown back to the date of the act done, and that the agent is put in same position as if he had had authority to do the act at the time the act was done by him.... The case of Hagedorn v Oliverson is a strong case of the application of the principle. It was there pointed out how favourable the rule was to the principal, because till ratification he was not bound, and he had an option to adopt or not to adopt what had been done. ...
I think the proper view is that the acceptance by Scratchley did constitute a contract, subject to its being shewn that Scratchley had authority to bind the company. If that were not shewn there would be no contract on the part of the company, but when and as soon as authority was given to Scratchley to bind the company the authority was thrown back to the time when the act was done by Scratchley, and prevented the Defendant withdrawing his offer, because it was then no longer an offer, but a binding contract.[321]
(Footnotes omitted)

Lindley LJ agreed with Cotton LJ and said:

I can find no authority in the books to warrant their contention that an offer made, and in fact accepted by a principal through an agent or otherwise, can be withdrawn. The true view on the contrary appears to be that the doctrine as to the retrospective action of ratification is applicable.
If we look at Mr Brice’s argument closely it will be found to turn on this – that the acceptance was a nullity, and unless we are prepared to say that the acceptance of the agent was absolutely a nullity, Mr Brice’s contention cannot be accepted. That the acceptance by the assumed agent cannot be treated as going for nothing is apparent from the case of Walter v James. I see no reason to take this case out of the application of the general principle as to ratification. ...[322]
(Footnotes omitted)

and Lopes LJ said:

Directly Scratchley on behalf and in the name of the Plaintiffs accepted the Defendant’s offer I think there was a contract made by Scratchley assuming to act for the plaintiffs, subject to proof by the Plaintiffs that Scratchley had that authority.
The Plaintiffs subsequently did adopt the contract, and thereby recognised the authority of their agent Scratchley. Directly they did so the doctrine of ratification applied and gave the same effect to the contract made by Scratchley as it would have had if Scratchley had been clothed with a precedent authority to make it.[323]
  1. The judgments of Cotton LJ and Lopes LJ proceed on the basis that a positive act of ratification by the company was required before a contract came into existence, albeit once that occurred the contract was treated as coming into existence retrospectively on 13 December 1886. Those judgments do not establish the third defendant’s proposition of law. One passage from the judgment of the Lindley LJ, namely the reference to the acceptance not being an absolute nullity, might at first glance be thought to support the third defendant’s proposition. However, Lindley LJ agreed with Cotton LJ, who said that till ratification the principal is not bound. Further, Lindley LJ said that he was applying orthodox principles of ratification which, as identified above, are fundamentally inconsistent with the third defendant’s proposition.
  2. Bolton Partners v Lambert[324] has been treated subsequently by the English Court of Appeal as good authority.[325] However, as pointed out by Issaacs J in Davison v Vickery’s Motors Ltd (in liq),[326] the point had already been decided the other way in Mayor of Kidderminster v Hardwicke.[327] It was doubted in Fleming v Bank of New Zealand[328] where Lord Lindley, delivering the judgment of the Privy Council, said that it caused difficulties and the Privy Council reserved the right to reconsider its correctness in future. The principle identified in Bolton Partners v Lambert[329] has not been affirmed at final appellate level in the United Kingdom.
  3. In Australia, in Davison v Vickery’s Motors Ltd (in liq),[330] Issaacs J, who was the only Justice to consider the matter, after an extensive and persuasive analysis of principle and authority, held that Bolton Partners v Lambert[331] was wrongly decided and should not be followed in Australia.[332] If necessary, I would follow the judgment of Issaacs J and not follow Bolton Partners v Lambert.[333] However, even assuming that it was rightly decided, it does not establish the broader proposition advanced by the third defendant that a contract purportedly entered into by an agent without authority binds the principal unless and until the principal repudiates it.
  4. The third defendant cites the dissenting judgment of Davies JA in the Queensland Court of Appeal decision in White v Tomasel[334] as authority for this proposition. In that case, Williams JA and McMurdo J held that a vendor of land could seek to set aside a transfer of land executed by the Registrar of the Court pursuant to a court order on the basis that the vendor’s auctioneer had not had actual or ostensible authority to enter into a contract of sale pursuant to which the transfer was prepared notwithstanding the infeasibility of title provisions contained in the Land Title Act 1994 (Qld). Davies JA dissented and held that the transfer could not be set aside regardless of whether the contract entered into by the auctioneer was void or voidable. In the course of his reasons, Davies JA characterised the contract as being voidable at the option of the vendor, but this was obiter dicta and no principle or authority was cited for that proposition.[335]
  5. In the present case, I have concluded that the Authority did not ratify the Contract executed by the Chief Executive purportedly on its behalf. If, contrary to my conclusion, the Chief Executive had not had authority to execute the Contract and if the question were to be determined by applying private law principles, I would have held that the Contract was void.

Statutory construction

  1. The first and second defendants contend that the question whether a contract purportedly entered into on behalf of the Authority by a person without power is to be determined as a matter of statutory construction. I accept this contention.
  2. The first and second defendants contend that, on its proper construction, section 19 of the Act does not render void the exercise of a power by a person purporting to act as delegate but to whom no delegation has been made or by a person whose power under a delegation does not extend to the purported exercise of power. I reject this contention.
  3. Section 19 of the Act provides:
19—Delegations
(1) A board may delegate a function or power conferred on or vested in the board (or its statutory corporation) under this Act—
(a) to a specified person or body; or
(b) to a person occupying a specified office or position.
(2) A delegation—
(a) may be made subject to conditions and limitations specified in the instrument of delegation; and
(b) if the instrument of delegation so provides, may be further delegated by the delegate; and
(c) is revocable at will and does not prevent the board from acting itself in a matter.
  1. Section 8(2)(b) of the Act provides that regulations establishing a statutory corporation must provide for the constitution of a board of management as the body’s governing body. Section 16 imposes various strategic and general management duties on a board of management but it does not define or limit the functions of the board and does not detract from section 8 which provides for the board to be the governing body of the corporation.
  2. The purpose of section 19 is to enable a board to delegate its functions and powers as the governing body of the corporation. The natural reading of section 19 is that a delegate or purported delegate can only validly exercise power pursuant to a delegation by a board if the board has delegated power to that person to perform that function, the power exercised by that person is within the scope of the delegation (including any conditions or limitations) and the board has not revoked the delegation.
  3. In Project Blue Sky Inc,[336] McHugh, Gummow, Kirby and Hayne JJ said:
Section 160 proceeds on the hypothesis that the ABA has power to perform certain functions and directs that it "is to perform" those functions "in a manner consistent with" the four matters set out in the section.... The fact that s 160 regulates the exercise of functions already conferred on the ABA rather than imposes essential preliminaries to the exercise of its functions strongly indicates that it was not a purpose of the Act that a breach of s 160 was intended to invalidate any act done in breach of that section.
That indication is reinforced by the nature of the obligations imposed by the s 160. Not every obligation imposed by the section has a rule-like quality which can be easily identified and applied....
...It is hardly to be supposed that it was a purpose of the legislature that the validity of a licence allocated by the ABA should depend on whether or not a court ultimately ruled that the allocation of the licence was consistent with a general direction, policy or treaty obligation falling within the terms of s 160.[337]
  1. Section 19 of the Act stands in stark contrast to section 160 of the Broadcasting Act. Section 19 does define the power of a delegate and does impose essential preliminaries to the exercise of a delegate’s powers. Section 19 does have a rule-like quality. Section 19 has an operation that is analogous to the general law under which the validity of the act by a purported agent is ultimately determined by a court of law.
  2. There is no reason to construe section 19 as providing that a person to whom a power is not delegated, or a person who acts beyond the scope of a power delegated to him or her, can nevertheless bind the statutory corporation. Such a construction would be contrary to the public interest and there is no reason to attribute to the legislature such an intention.
  3. Section 39 of the Public Corporations Act provides:
39—Validity of transactions of corporation
(1) Subject to subsection (2), a transaction to which a public corporation is a party or apparently a party (whether made or apparently made under the corporation's common seal or by a person with authority to bind the corporation) is not invalid because of—
(a) any deficiency of power on the part of the corporation; or
(b) any procedural irregularity on the part of the board or any director, employee or agent of the corporation; or
(c) any procedural irregularity affecting the appointment of a director, employee or agent of the corporation.
(2) This section does not validate a transaction in favour of a party—
(a) who enters into the transaction with actual knowledge of the deficiency or irregularity; or
(b) who has a connection or relationship with the corporation such that the person ought to know of the deficiency or irregularity.
  1. Section 39 of the Public Corporations Act does not apply to the Authority.[338] The fact that the legislature considered it necessary to enact section 39 indicates that, in its absence, a procedural irregularity would render a purported exercise of a power void. While the term “procedural irregularity” is not defined, it would not extend to an act by an officer or agent of the corporation performed without power or authority.
  2. The defendants contend that, if section 19 is construed as rendering void an act by a purported delegate without power or authority, it would be difficult if not impossible for parties dealing with a delegate to know whether the delegate was empowered to act on behalf of the Authority. However, there is no reason why such parties could not ask the purported delegate to produce a copy of the relevant instrument of delegation.
  3. If the Chief Executive had executed the Contract without power to do so on behalf of the Authority, no contract would have come into existence. I would have declared the Contract void and granted appropriate relief in favour of the plaintiffs.

Decision made in breach of section 11

  1. The plaintiffs’ second contention is that the Contract Decision was made in breach of section 11 of the Public Corporations Act and the Contract was thereby rendered void or alternatively entry into the Contract by the Authority was unlawful and performance of it should be restrained by injunction.
  2. I have concluded that the decision to enter into the Contract was made in breach of section 11 of the Public Corporations Act. However, I have held that, as a matter of construction, section 11 of the Public Corporations Act does not render a decision or act (including entry into a contract) in contravention of its provisions void. If I had held otherwise, I would have declared the Contract void.
  3. I have concluded that the decision to enter into the Contract was unlawful in the sense used by McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc.[339] I have concluded that the Contract was not rendered void as a result. The plaintiffs contend that, even if section 11 of the Public Corporations Act does not render the decision to enter into a contract or the contract itself void, nevertheless the Court can and should grant an injunction restraining performance of the contract. If the Contract is valid, there is no basis to grant an injunction restraining its performance.

Decision made unreasonably in the Wednesbury sense

  1. The plaintiffs’ third contention is that the Contract Decision was unreasonable in the Wednesbury sense and the Contract was thereby rendered void. I have concluded that the Contract Decision was unreasonable in the Wednesbury sense.
  2. The plaintiffs contend that the Contract Decision was a nullity[340] and it follows that the Contract itself is void. The defendants contend that the question whether the Contract Decision and the Contract itself are rendered void turns on the question whether the statutory intention was to render Wednesbury- unreasonable decisions and acts void or merely unlawful in accordance with the principles identified by the High Court in Project Blue Sky Inc.[341] The defendants contend that the statutory intention was not to render them void.
  3. I accept the defendants’ contention. I have concluded that the Contract Decision was unreasonable in the Wednesbury sense on the basis that it is an implied condition of the power of the Authority conferred by the Act in the context of the Public Corporations Act that it not make a decision, inter alia, to enter into a contract that is unreasonable in the Wednesbury sense. As it is the statute that is the source of that implied condition, it is necessary to turn to the statutory provisions to determine whether non-compliance with the implied condition renders the act void or merely (at worst) unlawful. This raises the question of statutory construction articulated by the High Court in Project Blue Sky Inc.[342]
  4. The defendants contend that it would be anomalous to apply statutory construction principles to determine whether an act in breach of the express obligation imposed by section 11 of the Public Corporations Act is invalid but not to apply them to determine whether an act in breach of an implied obligation imposed by the Act not to act unreasonably in the Wednesbury sense is invalid. The defendants contend that it would be anomalous if, in the latter case only, the question of invalidity is to be determined by a general law principle. I accept this contention.
  5. Turning to the question of statutory construction, the question whether the Authority has acted unreasonably in the Wednesbury sense will often involve matters of judgment and degree and it may be difficult to determine this unless and until the question is decided by a court. The observation of the High Court in Project Blue Sky Inc that “[i]t is hardly to be supposed that it was a purpose of the legislature that the validity of a licence allocated by the ABA should depend on whether or not a court ultimately ruled that the allocation of the licence was consistent with a general direction, policy or treaty obligation falling within the terms of s 160”[343] is apposite to the validity of a contract entered into by the Authority. It is hardly to be supposed that it was a purpose of the legislature that the validity of a contract entered into by the Authority should depend on whether or not a court ultimately rules that the decision to enter into the contract was unreasonable in the Wednesbury sense.
  6. The observation of the High Court in Project Blue Sky Inc that “[s]ection 160 proceeds on the hypothesis that the ABA has power to perform certain functions and directs that it “is to perform” those functions “in a manner consistent with” the four matters set out in the section”[344] is apposite to section 21 of the Act. Section 21 proceeds on the hypothesis that the Authority has power to enter into contracts and implicitly directs that in the exercise of that power the Authority is not to act unreasonably in the Wednesbury sense.
  7. On its proper construction, the Act does not render void a decision by the Authority to enter into a contract or the contract itself if the decision is unreasonable in the Wednesbury sense.

Decision without regard to mandatory relevant factor

  1. The plaintiffs’ fourth contention is that the Contract Decision was made without regard to a factor to which the decision-maker was required to have regard pursuant to section 11 of the Public Corporations Act and the Contract was thereby rendered void.
  2. I have concluded that the Contract Decision was made without regard to a mandatory relevant factor, namely prudent commercial principles consistent with the Authority’s functions.
  3. The plaintiffs contend that the Contract Decision is a nullity[345] and it follows that the Contract itself is void. The defendants rely on the fact that the source of the Authority’s obligation to have regard to prudent commercial principles is consistent with its functions in section 11 of the Public Corporations Act. They contend that the question whether the Contract Decision and the Contract itself are rendered void for failure to have regard to those principles must turn on the question whether it was the statutory intention to render decisions and acts made without regard to that factor void or merely unlawful in accordance with the principles identified in Project Blue Sky Inc.[346] The defendants contend that the statutory intention was not to render them void.
  4. I have concluded that the Contract Decision was made without regard to a mandatory relevant factor on the basis that it is an implied condition that, in deciding to enter into a contract, the Authority must have regard to prudent commercial principles consistent with its functions in accordance with section 11 of the Public Corporations Act. As it is the statute that is the source of that implied condition, namely section 21 of the Act and section 11 of the Public Corporations Act, it is necessary to turn to the statutory provisions to determine whether non-compliance with that condition renders the act void or merely (at worst) unlawful. This raises the question of statutory construction articulated by the High Court in Project Blue Sky Inc.[347]
  5. The defendants contend that it would be anomalous to apply statutory construction principles to determine whether a decision not made in accordance with prudent commercial principles consistent with its functions in breach of the express obligation under section 11 of the Public Corporations Act is invalid but not to apply them to determine whether a decision made without regard to prudent commercial principles consistent with its functions in breach of an implied obligation imposed by the Act and the Public Corporations Act is invalid. The defendants contend that it would be anomalous if, in the latter case only, the question of invalidity is to be determined by a general law principle. I accept this contention.
  6. Turning to the question of statutory construction, the question is answered by the considerations I have already addressed at [473] to [475] above in the context of a breach of section 11 of the Public Corporations Act.
  7. On their proper construction, the Act and the Public Corporations Act do not render void a decision by the Authority to enter into a contract or the contract itself when the decision is made without regard to prudent commercial principles consistent with its functions.

PART K: THE MINISTER FOR STATE DEVELOPMENT

  1. The defendants contend that, regardless of whether the Contract would be void or amenable to injunctive or other relief at the instance of the plaintiffs if it had only been between the Authority and ACP, the Contract will continue to bind the State. This is because it was entered into by the Premier in the exercise of State executive power to contract for the sale of, or grant of options to buy, property held on behalf of the Crown. The defendants contend that, as head of the government, the Premier is empowered to bind the executive in contract provided the contract is incidental to the ordinary and well recognised functions of government.[348] The defendants contend that entry into commercial transactions exploiting the strategic assets of the State for the benefit of the people of the State falls within the ordinary functions of government. The defendants contend that there is nothing in the Act or the Public Corporations Act which precludes the Premier entering into a contract to sell land vested in the Authority.
  2. The defendants contend that the decision of the Premier to enter into a contract, being an exercise of pure executive power, is not subject to the provisions of the Act or the Public Corporations Act. It is therefore incapable of having been made in breach of section 11 of the Public Corporations Act or being conditional upon the Premier taking into account prudent commercial principles consistent with the Authority’s functions under section 11 or being conditional upon the Premier not making an unreasonable decision in the Wednesbury sense. The defendants contend that there are no substantive grounds available to review the Premier’s decision to enter into the Contract. The defendants contend that, as the Contract will continue to bind the State in any event, relief should be refused on the ground that it would be futile.
  3. The plaintiffs contend that the role of the Minister for State Development under the Contract is extremely circumscribed and, by executing the Contract, the Minister for State Development did not purport to sell or grant options to buy the Land, legal title to which was vested in the Authority, and did not purport to act in his coincidental role as Premier. The plaintiffs contend that, in any event, any purported exercise of executive power by the State to sell or grant options to buy the Land would have been contrary to the Act and beyond power.

Effect of Minister being party to contract

  1. The implicit premise of the defendants’ contention is that, by executing the Contract, the Honourable Jay Weatherill MP was acting on behalf of and binding the State to agree to sell the Land, or more particularly those portions of the land comprising the Stage 1 Option Land, Stage 2 Option Land and/or Stage 3 Option Land if and when ACP exercised the relevant Option to purchase that land.
  2. I reject that premise. The Options granted by clause 9 of the Contract are granted by the Authority and not by the Minister for State Development or the State. Clause 9.6 of the Contract provides that, upon exercise of an option, the Authority and ACP will be deemed to have entered into and duly executed the Land Sale Contract which is a contract between the Authority and ACP and/or Nominee. Neither the State nor the Minister for State Development are parties to the Land Sale Contract. Nearly all of the rights and obligations conferred and imposed by the Contract are conferred and imposed upon the Authority and ACP.
  3. The role of the Minister for State Development under the Contract is very circumscribed. The only obligation undertaken by the Minister for State Development is under subclauses 5.4.2 and 5.4.3 that, upon request by ACP for assistance to promote the project to potential investors or users, the Minister is to form an opinion whether such promotion is appropriate to the activities of government and, if so, provide that assistance. The only other substantive provision involving the Minister is an entitlement of the Minister under subclause 2.7.2 to give to ACP a PoSS Notice, which deems the project named in the notice to be a Project of State Significance on a prima facie basis. The obligation under subclauses 5.4.2 and 5.4.3 and the entitlement under subclause 2.7.2 vest in the Minister for State Development being the person who from time to time occupies that office.
  4. The Premier is not a party to the Contract. While in December 2013 the Honourable Jay Weatherill MP did occupy the office of Premier as well as the office of Minister for State Development, by executing the Contract in his capacity as Minister for State Development he did not purport to act as Premier or to exercise any authority he might have had as Premier. Nor did he purport to contract on behalf of the State to sell, or grant options to sell, the Land.
  5. The role of the Minister for State Development under the Contract is entirely subsidiary and incidental to the substantive rights and obligations conferred and imposed by the Contract upon the Authority and ACP. Subclauses 2.7.2, 5.4.2 and 5.4.3 are otherwise meaningless and incapable of having any operation in the absence of those substantive rights and obligations of the principal parties to the Contract.
  6. Accordingly, assuming without deciding that, subject only to statutory abrogation or regulation, the Premier could have entered into a contract on behalf of the State to sell the Land or grant options to ACP to buy it, the Premier is not a party to the Contract, the Minister for State Development did not purport to contract on behalf of the State to sell the Land or grant options to ACP to buy it, and the defendants’ contention fails in limine. If the Contract were void as between the Authority and ACP, the very limited rights and obligations of the Minister for State Development under the Contract would fall consequentially. The fact that the Minister for State Development is a party to the Contract would not render relief in favour of the plaintiffs futile.

Power of Premier to contract to sell the Land

  1. The defendants accept that the power vested in the executive and exercisable by the head of government may be abrogated or regulated by statute.[349] They contend, however, that this power has not been abrogated by the Act or the Regulations. The defendants accept that the abrogation can be effected expressly or by implication, but contend that to be implied abrogation must be a necessary implication.[350]
  2. Assuming without deciding that, subject only to statutory abrogation or regulation, the Premier could have entered into a contract on behalf of the State to sell the Land or grant options to ACP to buy it, such authority has been unequivocally abrogated by the Act and Regulations.
  3. Section 8 of the Act empowers the Governor to make regulations establishing a statutory corporation under the Act, which is a body corporate with the general powers of a natural person and to specify functions and powers of the body corporate. Section 8 empowers the Governor to make regulations providing for the constitution of a board of management as the body corporate’s governing body. Section 10 empowers the Governor to appoint members of a board of management of a statutory corporation. Section 21(1)(b) empowers a statutory corporation established by regulations to, inter alia, acquire and dispose of real property.
  4. Regulation 6(1)(c) of the Regulations provides that it is a function of the Authority, inter alia, to acquire and dispose of land. Regulation 5 provides that the board of management of the Authority will consist of seven persons. Regulation 8 applies, inter alia, sections 11 to 13 of the Public Corporations Act to the Authority, which in turn require the Authority to perform commercial operations in accordance with prudent commercial principles and use its best endeavours to achieve a level of profit consistent with its functions and perform its non-commercial operations in an efficient and effective manner consistent with its charter.
  5. The legislative scheme imposing functions and responsibilities on body corporates formed under the Act, and in particular the Authority, is completely inconsistent with the Premier exercising executive power to dispose of land vested in and under the control of the Authority. The Act contains specific provisions for control of statutory corporations established under the Act by the Minister and it is by these provisions that the legislature defines the relationship between the executive and such a statutory corporation.[351] Those specific provisions are inconsistent with the Premier exercising executive power to dispose of land vested in and under the control of the Authority.
  6. Section 22 provides that a statutory corporation holds its property on behalf of the Crown. This section does not evince a legislative intention that the executive is to have or retain power outside the Act to dispose of real property vested in a statutory corporation established under the Act. On the contrary, this section recognises the distinction between title to and control over property vested in the statutory corporation and the ultimate beneficial ownership of that property.

PART L: CONCLUSION

  1. The plaintiffs have standing to seek judicial review. The Contract Decision is amenable to judicial review but the Advice Decision is not.
  2. The standing delegation contained in the Instrument of Delegation did not delegate to Cabinet power to decide to enter into the Contract, nor did the Board make an ad hoc delegation in favour of Cabinet. The standing delegation contained in the Instrument of Delegation delegated to the Chief Executive power to decide to enter into the Contract, provided that he obtained the approval of the Minister for Urban Development before entering into the Contract. The Minister for Urban Development granted his approval and the Chief Executive made the substantive decision to enter into the Contract. The Chief Executive’s execution of the Contract was therefore empowered by the Authority. Otherwise, the Contract would have been void and the plaintiffs would have been entitled to relief.
  3. The decision by the Chief Executive to enter into the Contract was unreasonable in the Wednesbury sense, was not made in accordance with prudent commercial principles consistent with the Authority’s functions under section 11 of the Public Corporations Act and was made without having regard to a factor required to be taken into account, namely prudent commercial principles consistent with the Authority’s functions.
  4. The decision by the Chief Executive to enter into the Contract was unlawful but it was not void and did not render the Contract void.
  5. The role of the Minister for State Development under the Contract is extremely circumscribed and the fact that the Minister for State Development is a party to the Contract would not have resulted in the Contract being effective if it otherwise had been void.
  6. I will hear the parties as to orders to be made in light of my reasons.

Appendix 1


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2014_20601.jpg


Appendix 2


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[1] The same issue arises for the Advice Decision but it is a subsidiary issue.

[2] The same issue arises for the Advice Decision and the MSD Decision but it is a subsidiary issue.

[3] The same issue arises for the Advice Decision and the MSD Decision but it is a subsidiary issue.

[4] The relevant date for all legislation in this case is December 2013. For ease of reference, I use the present tense to describe all legislative provisions (including regulations) as they were at December 2013.

[5] Public Corporations Act 1993 (SA) s 5(1).

[6] Sections 6 and 7 address control of and direction to a public corporation by provision of information and records to its Minister. They do not apply to the Authority.

[7] With effect on 18 September 2014, the name of the Act was changed to the Urban Renewal Act 1995. With effect on 18 September and 24 October 2014, very substantial amendments to the Act came into force. This action was conducted by all parties on the basis that the relevant provisions of the Act are those in force as at December 2013. I proceed on that basis and refer in this judgment to the Act under its former name and with its former content. I use the present tense to describe its former provisions and effect.

[8] Housing and Urban Development (Administrative Arrangements) Act 1995 (SA) s 5(b).

[9] With effect on 18 September 2014, the Regulations were revoked and replaced by the Urban Renewal Regulations 2014 (SA). This action was conducted by all parties on the basis that the relevant provisions of the Regulations are those in force as at December 2013. I proceed on that basis and refer in this judgment to the Regulations as at December 2013. I use the present tense to describe their former provisions and effect.

[10] Public Corporations (Land Management Corporation) Regulations 1997 (SA).

[11] Public Corporations (Land Management Corporation) (Dissolution and Revocation) Regulations 2012 (SA).

[12] The relevant date for almost all purposes in this case is December 2013. For ease of reference, I use the present tense to describe matters as at December 2013 (despite the passage of 12 months and changes that may have occurred since then) and the past tense to describe events or matters before December 2013.

[13] The figures for the previous year were largely the same.

[14] Hectares referred to in this judgment are generally rounded to the nearest hectare.

[15] Percentages referred to in this judgment are generally rounded to the nearest whole percentage.

[16] Section 4 defines “Crown”.

[17] Environment Protection Regulations 2009 (SA) reg 3(1).

[18] This evidence was not challenged in cross-examination or contradicted by evidence from the defendants.

[19] See [91] below.

[20] See [99] below.

[21] From exhibit P2.

[22] Annexure C to ACP’s August proposal being an attachment to the September Cabinet submission, page 605.

[23] See [99] below.

[24] See [91] below.

[25] Recital H of the draft Deed version 7.1 attached to the December Cabinet submission, page 1008.

[26] September Cabinet submission, page 587; December Cabinet submission, page 991.

[27] September Cabinet submission, page 587; December Cabinet submission, page 991.

[28] ACP’s August proposal attached to the September Cabinet submission, page 598.

[29] September Cabinet submission, page 587; December Cabinet submission, page 991.

[30] Except a section on the western edge of Lot 5 that is not within a Council area.

[31] September Cabinet submission, page 578.

[32] From exhibit P1, page 775.

[33] September Cabinet submission, pages 575, 578.

[34] See [81] below.

[35] Public Corporations (Land Management Corporation) Regulations 1997 (SA) reg 13(1)(a).

[36] September Cabinet submission, page 575.

[37] September Cabinet submission, page 572.

[38] September Cabinet submission, page 575.

[39] Recital E to the draft deed version 7.1 attached to the December Cabinet submission, page 1007.

[40] September Cabinet submission, page 575.

[41] September Cabinet submission, page 578.

[42] ACP’s August proposal, page 540.

[43] Recital K of draft deed version 7.1 attached to the December Cabinet submission, page 1008.

[44] eptember Cabinet submission, pages 575, 582; December Cabinet submission, pages 981, 986.

[45] Recital K of draft deed version 7.1 attached to the December Cabinet submission page 1008.

[46] September Cabinet submission, page 582; December Cabinet submission, pages 981, 986.

[47] December Cabinet submission, pages 981, 986.

[48] September Cabinet submission, pages 583–584; December Cabinet Submissions, pages 985-988.

[49] December Cabinet submission, pages 985-988.

[50] September Cabinet submission, page 574, 579; Recital I and clause 2.3 of draft deed version 7.1 attached to the December Cabinet submission, pages 1008, 1010.

[51] Recital I and clause 2.4 of draft deed version 7.1 attached to the December Cabinet submission, pages 1008, 1010.

[52] September Cabinet submission, pages 581, 582.

[53] December Cabinet submission, page 978.

[54] December Cabinet submissions, pages 976, 986.

[55] ACP’s August proposal attached to the September Cabinet submission, pages 598-600.

[56] ACP’s August proposal attached to the September Cabinet submission.

[57] September Cabinet submission, page 575.

[58] September Cabinet submission, page 581.

[59] September Cabinet submission, pages 582-583.

[60] eptember Cabinet submission, page 584.

[61] September Cabinet submission, page 588.

[62] December Cabinet submission, page 976.

[63] December Cabinet submission, page 979.

[64] Clause 7 and definitions in clause 32.

[65] Clauses 1.3 and 6 and definitions in clause 32.

[66] Clause 6 and definitions in clause 32.

[67] Clause 1.3.

[68] Clauses 7.2.1(b),7.2 and 15.

[69] Clauses 7.2.1 and 6 and definitions in clause 32.

[70] Clauses 1.3 and 6 and definitions in clause 32.

[71] Clause 7.2.1 (a)(i) and definitions in clause 32.

[72] Clause 7.6 and Annexure C.

[73] Clauses 7.5 and 7.6 and Annexures C and D. There was a limit of 6 months to satisfy the land division condition but no limit for the other conditions.

[74] Clause 2.6 and definitions in clause 32 and Annexure E.

[75] Annexure E.

[76] Clause 4.2.2.

[77] Clauses 7.2.1(b).

[78] Clause 7.2.2 and 6 and definitions in clause 32.

[79] Clauses 1.3 and 6 and definitions in clause 32.

[80] Clause 7.4.

[81] Clauses 7.2.3(c),7.2 and 15.

[82] Clauses 7.2.3 and 6 and definitions in clause 32.

[83] Clauses 1.3 and 6 and definitions in clause 32.

[84] Clause 7.4.

[85] Clause 3.

[86] Clauses 4.4.2 and 4.4.3.

[87] Clause 2.6.2.

[88] December Cabinet submission, page 978.

[89] There is no evidence of the response (if any) from the other three board members.

[90] Fourth Statement of Claim [36C and 36D], Third Defence of first and second defendants [11B].

[91] No evidence was adduced of the response, if any, from the fifth Board member. It is pleaded by the plaintiffs, and admitted by the Authority and the State, that only four board members approved the recommendation.

[92] The version of Annexure A (Project Objectives) before Cabinet was contained in Appendix A (page 1000) to the Cabinet submission rather than the version attached to the draft deed (pages 1039-1040).

[93] The version of Annexure F (Concept Plan) before Cabinet was contained in Appendix B (pages 1000-1003) to the Cabinet submission rather than the version attached to the draft deed (pages 1046-1047). Appendix B contained the drawing attached to the Concept Plan showing the indicative locations of Stages 1, 2 and 3.

[94] This referred to the 10 variations referred to at [115] above.

[95] Page 920 of exhibit P1.

[96] Page 1097 of exhibit P1.

[97] New clause 2.6.3, varied recital J and clause 2.1.1 of the Draft Contract.

[98] New paragraph 2.7.1(a) varied clause 2.6.1 of the Draft Contract.

[99] New clause 2.4.2.

[100] New proviso in clause 9.3.1 to exercise of options by ACP and new clause 9.4.2(f).

[101] Varied clause 12.5.

[102] Additional objective.

[103] Varied clause 2.5.

[104] Indeed the parties in closing address do not address the credit of any witness or invite me to make specific findings based on acceptance or rejection of evidence of any particular witness. Their closing addresses proceed on the basis of a common substratum of fact to determine the legal issues identified at the beginning of this judgment. My conclusions do not ultimately turn on evidence by the witnesses that was considered controversial when given.

[105] Third Statement of Claim [50]–[54F].

[106] Third Statement of Claim [54G]–[54I].

[107] Third Statement of Claim [44].

[108] Second Defence [18.2] and [18.1] respectively.

[109] The decision of the High Court in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175, relied on by the plaintiffs, therefore is inapplicable.

[110] Second Defence [62].

[111] Mr Brumby was at a relatively low level within the hierarchy at the Authority and in any event gave evidence that he did not have any significant knowledge concerning the Land or consideration of ACP’s proposal. His evidence primarily related to the EGT land.

[112] See Damberg v Damberg [2001] NSWCA 87, (2001) 52 NSWLR 492 at [148]- [160] per Heydon JA (Spigelman CJ and Sheller JA agreeing).

[113] [1903] 1 Ch 109.

[114] Ibid at 114.

[115] (1980) 146 CLR 493.

[116] Ibid at 527, 530.

[117] [1981] HCA 50; (1981) 149 CLR 27.

[118] Ibid at 35-36, 37.

[119] Ibid at 68-74.

[120] Ibid at 70, 72, 73, 74.

[121] Wentworth v Woollahra Municipal Council [1982] HCA 41; (1982) 149 CLR 672 at 680 per Gibbs CJ, Mason, Murphy and Brennan JJ; Shop Distributive and Allied Employees Association v Minister for Industrial Affairs of the State of South Australia (1995) 183 CLR 552 at 558 per Brennan, Dawson, Toohey, Gaudron and McHugh JJ; Bateman’s Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd [1998] HCA 49, (1998) 194 CLR 247 at [42]–[46] per Gaudron, Gummow and Kirby JJ, [96]–[103] per McHugh J and [107] per Hayne J; Edwards v Santos Ltd [2011] HCA 8, (2011) 242 CLR 421 at [37]–[38] per Heydon J (French CJ, Gummow, Crennan, Kiefel and Bell JJ agreeing).

[122] [1998] HCA 49; (1998) 194 CLR 247.

[123] Ibid at [46].

[124] [2011] HCA 8; (2011) 242 CLR 421.

[125] Ibid at [37], [38].

[126] [1985] 1 AC 374.

[127] Ibid at 399.

[128] Ibid at 407.

[129] Ibid at 411.

[130] Ibid at 417.

[131] (1987) 15 FCR 274.

[132] Ibid at 277, 278.

[133] Ibid at 302, 303-304.

[134] (1988) 49 SASR 501.

[135] Ibid at 509.

[136] [1998] SASC 6858; (1998) 72 SASR 110.

[137] Ibid at 114.

[138] Ibid at 126.

[139] [2000] SASC 327; (2000) 78 SASR 251.

[140] Ibid at [8].

[141] Ibid at [56], [57], [58], [59].

[142] [2011] SASCFC 70; (2011) 110 SASR 235.

[143] The defendants contend that the judgment of Prior J in Xenophon v State of South Australia is also authority for this proposition.

[144] [1982] FCA 191; (1982) 64 FLR 166.

[145] Ibid at 174, 175.

[146] [2005] HCA 7; (2005) 221 CLR 99.

[147] Ibid at [81]-[82].

[148] [1993] FCA 473; (1993) 45 FCR 164.

[149] Ibid at 171.

[150] (2011) 110 SASR 235.

[151] Ibid at [17]-[19].

[152] Ibid at [31].

[153] (1988) 49 SASR 501.

[154] [1998] SASC 6858; (1998) 72 SASR 110.

[155] [2000] SASC 327; (2000) 78 SASR 251

[156] (2005) 31 CLR 99.

[157] [1993] FCA 473; (1993) 45 FCR 164.

[158] (2011) 110 SASR 235.

[159] [1995] VicRp 47; [1995] 2 VR 121.

[160] [1995] 1 WLR 102.

[161] [2000] ACTSC 89; (2000) 206 FLR 120.

[162] [1998] HCA 49; (1998) 194 CLR 247.

[163] [2000] SASC 327; (2000) 78 SASR 251.

[164] (2011) 110 SASR 235.

[165] [1994] 2 NZLR 385.

[166] Ibid at 388.

[167] [1995] VicRp 47; [1995] 2 VR 121.

[168] Ibid at 140.

[169] Ibid at 149.

[170] Ibid at 163-164.

[171] [1995] 1 WLR 102.

[172] Ibid at 108.

[173] [2000] ACTSC 89, (2000) 206 FLR 120.

[174] Ibid at [214]-[218].

[175] [1995] VicRp 47; [1995] 2 VR 121.

[176] (2000) 206 FLR120.

[177] Ibid.

[178] Ibid.

[179] (2011) 110 SASR 235.

[180] (1996) 185 CLR 149.

[181] Ibid at 159-160, 161-162, 165.

[182] Whether one or more persons or a body.

[183] By “power or authority”, I encompass delegation and ability to bind the Crown or a statutory corporation as understood in public law as well as actual and ostensible authority as understood in private law without implying at this point that one doctrine or another is the appropriate one to apply to a decision purportedly made on behalf of the Authority.

[184] The first and second defendants do not join in this case.

[185] The first and second defendants do not join in this case.

[186] Pacific Carriers Ltd v BNP Paribas [2004] HCA 35, (2004) 218 CLR 451 at [22] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd & Ors [2004] HCA 52, (2004) 219 CLR 165 at [38], [40] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ.

[187] All figures in the Delegation Schedule, Delegation Guidelines and Treasurer’s Instruction 8 are expressed to be inclusive of GST but, for ease of reference, all figures are expressed in this judgment as exclusive of GST.

[188] Exclusive of GST.

[189] Exclusive of GST.

[190] As noted above, this construction is advanced by the defendants in respect of the Property Delegations Table and inferentially the Contracting Delegations Table of the Delegation Schedule and not directly in respect of Treasurer’s Instruction 8. However, given the cross reference in the Contracting Delegations Table to Treasurer’s Instruction 8, the defendants accept that the two instruments should be construed harmoniously to similar effect. It follows logically that the defendants must advance the same construction in respect of Treasurer’s Instruction 8.

[191] Is not clear in any event what would be the legal basis for the Treasurer, or the Department of Treasury and Finance, unilaterally to effect a delegation of decision-making by public authorities to Cabinet or the relevant Minister.

[192] It was not sent to Mr Terlet, because he had declared a potential conflict of interest.

[193] The parties diverge insofar as the plaintiffs contend that regard can and should also be had to earlier board considerations, including the board’s consideration of the first, second and third Board Papers, a contention with which the defendants take issue. It is unnecessary to consider that difference because I have reached a conclusion adverse to the defendants by reference only to the fourth Board Paper and in any event reference to the earlier considerations by the Board would not alter my conclusion.

[194] Exclusive of GST.

[195] The context for clause 6.4 is set out at [313] above.

[196] If the consideration is less than $1 million, there are concurrent delegations to the General Manager, Asset Management and General Manager, Major & Residential Project Delivery. If the consideration is less than $500,000, there is also a concurrent delegation to the Director, Major & Residential Project Delivery.

[197] Given my conclusion, it is unnecessary to consider whether section 19 of the Act manifests an intention that authority be conferred exclusively by delegation by the Board pursuant to that section.

[198] Transcript 308/1.

[199] Pacific Carriers Ltd v BNP Paribas [2004] HCA 35, (2004) 218 CLR 451 at [22] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd & Ors [2004] HCA 52, (2004) 219 CLR 165 at [38], [40] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ.

[200] The validity of this assumption is addressed below.

[201] R v Anderson; Ex parte IPEC-Air Pty Ltd [1965] HCA 27; (1965) 113 CLR 177; Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth of Australia [1977] HCA 71; (1977) 139 CLR 54.

[202] [1965] HCA 27; (1965) 113 CLR 177.

[203] Ibid at 200.

[204] Ibid at 204.

[205] Ibid at 192.

[206] [1977] HCA 71; (1977) 139 CLR 54.

[207] Ibid at 115-116.

[208] Ibid at 62.

[209] Bradley Selway, The Constitution of South Australia (1997) 77; Marshall, Constitutional Conventions (1984) 57.

[210] Sydney Municipal Council v Hermann [1948] NSWStRp 52; (1948) 49 SR (NSW) 46 at 52 per Davidson J.

[211] R v Anderson; Ex parte IPEC-Air Pty Ltd [1965] HCA 27; (1965) 113 CLR 177 at 200 per Taylor and Owen JJ and 192 per Kitto J (Menzies J agreeing); Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth of Australia [1977] HCA 71; (1977) 139 CLR 54 at 62 per Gibbs J and 114-116 per Aikin J (per Barwick CJ agreeing). See the passages quoted at [427] above.

[212] Transcript 781/25-783/16.

[213] This was expressed as the fifth matter but I have renumbered the matters decided for convenience.

[214] This was expressed as the eighth matter but I have renumbered the matters decided for convenience.

[215] Jones v Peters [1948] VicLawRp 56; [1948] VLR 331 at 335 per Herring CJ.

[216] Harrisons & Crossfield Ltd v London & North-Western Railway Co [1917] 2 KB 755 and 758 per Rowlatt J; Petersen v Moloney [1951] HCA 57; (1951) 84 CLR 91 at 101 per Dixon, Fullagar and Kitto JJ.

[217] Scott v Bagshaw [1999] FCA 674, (1999) 92 FCR 424 at [31] per Ryan, Moore and Marshall JJ.

[218] [1985] UKHL 11; [1986] 1 AC 717.

[219] Ibid at 777.

[220] [1856] EngR 470; (1856) 6 EL & BL 327, 119 ER 886 (‘Turquand’s case’).

[221] Ibid at 332.

[222] [1990] HCA 32; (1990) 170 CLR 146.

[223] [1856] EngR 470; (1856) 6 EL & BL 327, 119 ER 886

[224] Ibid.

[225] Ibid.

[226] [1990] HCA 32; (1990) 170 CLR 146.

[227] [1856] EngR 470; (1856) 6 EL & BL 327, 119 ER 886.

[228] [1998] HCA 28, (1998) 194 CLR 355 (Project Blue Sky Inc).

[229] Ibid at [93]-[95], [98]-[99].

[230] Ibid at [98] per McHugh, Gummow, Kirby and Hayne JJ.

[231] Ibid at [94] per McHugh, Gummow, Kirby and Hayne JJ.

[232] [1998] HCA 28; (1998) 194 CLR 355.

[233] Simpson v Attorney-General (NZ) [1955] NZLR 271 at 281; Montreal Street Railway Co v Normandin [1917] UKPC 2; [1917] AC 170 at 175.

[234] [1998] HCA 28; (1998) 194 CLR 355 at [99]- [100].

[235] Ibid.

[236] Ibid.

[237] The majority referred in the footnote to [100] of their reasons for judgment to Simpson v Attorney-General [1955] NZLR 271 at 281 and Montreal Street Railway Co v Normandin [1917] UKPC 2; [1917] AC 170 at 175. Analysis of those cases does not assist in determining the meaning of the word “unlawful”.

[238] Cooney v The Council for the Municipality of Ku-ring-gai [1963] HCA 47; (1963) 114 CLR 582 at 604 per Menzies J (Kitto, Taylor and Windeyer JJ agreeing); Fejo v Northern Territory of Australia [1998] HCA 58; (1998) 195 CLR 96 at [33] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ.

[239] [1998] HCA 28; (1998) 194 CLR 355.

[240] [1989] HCA 15; (1989) 166 CLR 454 (Redmore).

[241] [1998] HCA 28; (1998) 194 CLR 355.

[242] [1989] HCA 15; (1989) 166 CLR 454 at 459–460.

[243] [2000] EWHC Admin 405; [2001] 2 All ER 225.

[244] [2001] EWHC Admin 336.

[245] [2002] EWHC Admin 1132, [2002] All ER (D) 525.

[246] [2011] FCA 980, (2011) 195 FCR 438 at [170] per Greenwood J.

[247] [2008] HCA 32, (2008) 237 CLR 146 at [47] per Gummow, Hayne, Heydon and Crennan JJ.

[248] [1999] 3 VR 439.

[249]  [2011] NTSC 108 , (2011) 30 NTLR 195.

[250] [1998] HCA 49; (1998) 194 CLR 247.

[251] See [578] below.

[252] [1947] EWCA Civ 1; [1948] 1 KB 223 (Wednesbury).

[253] [1891] AC 173.

[254] Ibid at 179.

[255] [1947] EWCA Civ 1; [1948] 1 KB 223.

[256] Ibid at 230.

[257] [2013] HCA 18, (2013) 249 CLR 332 (Li).

[258] Ibid at [24], [25], [28], [30].

[259] Ibid at [72] and [75]–[76].

[260] Ibid at [105]-[106].

[261] Ibid at [23], [24], [28], [29].

[262] Ibid at [63].

[263] Ibid at [88], [90].

[264] Assuming, contrary to their contentions, that the decision of the Authority is amenable to review at all and that the plaintiffs have standing and subject to their contention (still to be considered) that an “unreasonable” decision would not in any event render the Contract void or the parties to it amenable to injunctive relief at the instance of the plaintiffs.

[265] September Cabinet submission attachment, page 605.

[266] December Cabinet submission, page 977.

[267] September Cabinet submission, page 579.

[268] September Cabinet submission, page 579.

[269] September Cabinet submission, page 572.

[270] December Cabinet submission, pages 979 and 983.

[271] December Cabinet submission, page 995.

[272] December Cabinet submission, page 982.

[273] December Cabinet submission, page 976.

[274] December Cabinet submission, pages 986, 987.

[275] December Cabinet submission, page 982.

[276] September Cabinet submission, page 573.

[277] December Cabinet submission, page 984.

[278] September Cabinet submission, page 574.

[279] September Cabinet submission, page 575.

[280] December Cabinet submission attached draft deed Recital E, page 1007.

[281] December Cabinet submission, page 984.

[282] September Cabinet submission, page 579; December Cabinet submission, page 984.

[283] September Cabinet submission, pages 575, 580, 581, 582, 584, 587; December Cabinet submission, pages 980, 985, 986, 991.

[284] December Cabinet submission, page 979.

[285] September Cabinet submission attachment, page 598.

[286] September Cabinet submission, page 586.

[287] Annexure C and D.

[288] September Cabinet submission, page 572.

[289] Ibid, page 572.

[290] Ibid, page 572.

[291] Ibid, page 583.

[292] Ibid at 986. This figure excludes the projected profit on the sale of the IPL land and Lot 202.

[293] Provided the conditions precedent to the Contract have been satisfied by 30 June 2014.

[294] September Cabinet submission, page 585.

[295] Treasury Minute, page 995.

[296] Ibid.

[297] See [25] above.

[298] Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39–42 per Mason J (Gibbs CJ and Dawson J agreeing) and 55-56 per Brennan J (Deane J agreeing); Foster v Minister for Customs and Justice [2000] HCA 38, (2000) 200 CLR 442 at [22] per Gleeson CJ and McHugh J, [45] per Gaudron and Hayne JJ and [102] per Kirby J.

[299] [1986] HCA 40; (1986) 162 CLR 24.

[300] [1986] HCA 40; (1986) 162 CLR 24 at 39-41.

[301] Ibid at 55-56.

[302] [1989] HCA 15; (1989) 166 CLR 454.

[303] [1998] HCA 28; (1998) 194 CLR 355.

[304] The Baumwoll Manufactur Von Carl Scheibler v Furness [1893] AC 8 at 16 per Lord Herschell LC; The Phoenix Assurance Co Ltd v Berechree [1906] HCA 6; (1906) 3 CLR 946 at 959-962 per Griffiths CJ (Barton and O'Connor JJ agreeing); Paterson v McCallum [1921] NZLR 869 at 872 per Stringer J.

[305] Jones v Peters [1948] VicLawRp 56; [1948] VLR 331 at 335 per Herring CJ.

[306] Fry v Smellie [1912] 3 KB 282 at 293 per Vaughan Williams LJ.

[307] Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1; [1972] AC 153 at 180 per Lord Morris of Borth-Y-Gest.

[308] Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; (1990) 170 CLR 146 at 172 per Brennan J.

[309] The State of New South Wales v Bardolph (1934) 52 CLR 455 at 502 per Starke J; Re Reference under s 11 Ombudsman Act 1976; Ex parte Director-General of Social Services (1979) 2 ALD 86 at 94 per Brennan J; Secretary, Department of Social Security v Alvaro [1994] FCA 1124; (1994) 50 FCR 213 at 223–225 per Von Doussa J (Spender and French JJ agreeing).

[310] (1843) 6 M&G ER 235.

[311] Ibid at 242.

[312] See also the formulation of the rule in Jones v Peters [1948] VicLawRp 56; [1948] VLR 331 at 335 per Herring CJ.

[313] [1925] HCA 47; (1925) 37 CLR 1.

[314] Ibid at 19.

[315] Harrisons & Crossfield Ltd v London & North-Western Railway Co [1917] 2 KB 755 and 758 per Rowlatt J; Petersen v Moloney [1951] HCA 57; (1951) 84 CLR 91 at 101 per Dixon, Fullagar and Kitto JJ.

[316] Savery v King [1856] EngR 534; (1856) 5 HL Cas 627; 10 ER 1046; Taylor v Smith [1926] HCA 16; (1926) 38 CLR 48 at 54-55 per Knox CJ, 59 per Higgins J, 60 per Rich J and 61–62 per Starke J; Victorian Professional Group Management Pty Ltd v The Proprietors “Surfers Aquarius” Building Units Plan No 3881 [1991] 1 Qd R 487 at 496–497 per Connolly J and 499–500 per Thomas J.

[317] In Re Portuguese Consolidated Copper Mines Ltd (1890) LR 45 Ch D 16 at 31 per Lindley LJ and 34 per Bowen LJ; Lifesavers (Australasia) Ltd v Frigmobile Pty Ltd [1983] 1 NSWLR 431 at 438 per Hutley JA.

[318] Taylor v Smith [1926] HCA 16; (1926) 38 CLR 48 at 55 per Knox CJ, 60 per Rich J and 61–62 per Starke J.

[319] (1889) LR 41 Ch D 295.

[320] Ibid.

[321] Ibid at 306 and 307-308.

[322] Ibid at 309.

[323] Ibid at 309-310.

[324] (1889) LR 41 Ch D 295.

[325] See Presentaciones Musicales SA v Secunda [1994] Ch 271.

[326] [1925] HCA 47; (1925) 37 CLR 1 at 14.

[327] (1873) LR 9 Ex 13.

[328] (1900) AC 577 at 587.

[329] (1889) LR 41 Ch D 295.

[330] [1925] HCA 47; (1925) 37 CLR 1.

[331] (1889) LR 41 Ch D 295.

[332] Ibid at 14-22.

[333] (1889) LR 41 Ch D 295.

[334] [2004] QCA 89, [2004] 2 Qd R 438.

[335] Ibid at [8], [36].

[336] [1998] HCA 28; (1998) 194 CLR 355.

[337] [1998] HCA 28; (1998) 194 CLR 355 at [94]- [95], [98].

[338] Housing and Urban Development (Administrative Arrangements) (Urban Renewal Authority) Regulations 2012 (SA) reg 8.

[339] [1998] HCA 28; (1998) 194 CLR 355 at [100].

[340] Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476 at [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ.

[341] [1998] HCA 28; (1998) 194 CLR 355.

[342] Ibid.

[343] Ibid at [98] per McHugh, Gummow, Kirby and Hayne JJ.

[344] Ibid at [94] per McHugh, Gummow, Kirby and Hayne JJ.

[345] Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476 at [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ.

[346] [1998] HCA 28; (1998) 194 CLR 355.

[347] Ibid.

[348] The State of New South Wales v Bardolph (1934) 52 CLR 455 at 496 per Rich J, 507 per Dixon J (Gavan Duffy CJ agreeing) and 517 per McTiernan J; Tipperary Developments Pty Ltd v Western Australia [2009] WASCA 126, (2009) 38 WAR 488 at [3] per Wheeler JA, [88]-[94] per McLure JA (Newnes JA agreeing).

[349] The State of New South Wales v Bardolph (1934) 52 CLR 455 at 496 per Rich J.

[350] Barton v Commonwealth of Australia (1974) 131 CLR 447 at 488 per Barwick CJ, 491 per McTiernan and Menzies JJ, 51 per Mason J and 508 per Jacobs J; Ling v Commonwealth of Australia [1994] FCA 1156; (1994) 51 FCR 88 at 92 per Gummow, Lee and Hill JJ.

[351] Sections 9 and 21.

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