|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
Supreme Court of the ACT Decisions |
Last Updated: 20 October 2000
ACTSC 89 (18 OCTOBER 2000)
CATCHWORDS
ADMINISTRATIVE LAW - Statutory Authority - Tender for development of land - successful tenderer would be offered lease of land - after closure date authority requested tenderers provide bids inclusive and exclusive of Goods and Service Tax - in response ultimately successful tenderer substantially increased bid specified exclusive of GST whilst its initial bid unspecified whether inclusive or exclusive of GST - whether decision to award offer of lease amenable to judicial review under Administrative Decisions (Judicial Review) Act 1989 (ACT) - whether grant of lease ultra vires because bid less than "full market value" and thus breach of s 169 Land (Planning and Environment) Act 1991 (ACT) - whether grant of lease ultra vires as to process because (inter alia) authority's acceptance of revised bid after closure date - whether authority amenable to judicial review at common law - whether relief should be declined on discretionary grounds.
WORDS AND PHRASES - "full market value" - "market value" - "special value" -
"head start" - "public element".
Gungahlin Development Authority Act 1996 (ACT), ss 5, 6, 7, 8, 11
Administrative Decisions (Judicial Review) Act 1989 (ACT), ss 5, 6, 9
Land (Planning and Environment) Act 1991 (ACT), ss 29, 161, 169, 282
Australian Capital Territory (Planning and Land Management) Act 1988 (Cth), ss 28, 29
Australian National University v Burns [1982] FCA 191; (1982) 43 ALR 25
Sellars v Woods (1982) 45 ALR 113
Bayley v Osborne (1984) 4 FCR 141
General Newspapers Pty Ltd v Telstra Corp [1993] FCA 473; (1993) 117 ALR 629
CEA Technologies Pty Ltd v Civil Aviation Authority [1994] FCA 1180; (1994) 122 ALR 724
Gerah Imports Pty Ltd v Minister for Industry, Technology and Commerce (1987) 14 ALD 351; 17 FCR 1
Hawker Pacific Pty Ltd v Freeland (1983) 52 ALR 185
Spencer v Commonwealth [1907] HCA 70; (1907) 5 CLR 418
Pastoral Finance Association Ltd v The Minister [1914] AC 1083
Brisbane Water County Council v Commissioner of Stamp Duties (NSW) [1979] 1 NSWLR 320
Boland v Yates Property Corp Pty Ltd [1999] HCA 64; (1999) 167 ALR 575
Kennedy Street Pty Ltd v Minister [1963] NSWR 1252
Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia [1947] HCA 10; (1947) 74 CLR 358
R v Wells; ex p Ansell (1982) 41 ACTR 31
Crouch v Commonwealth [1948] HCA 41; (1948) 77 CLR 339
Forster v Jododex (Australia) Pty Ltd [1972] HCA 61; (1972) 127 CLR 421
Nagle v Feilden [1966] 2 QB 633
R v Electricity Commissioners; ex p London Electricity Joint Committee Co Ltd (1920) Ltd [1924] 1 KB 171
Dyson v Attorney-General [1911] 1 KB 410
Simmonds v Newport Abercan Black Vein Steam Coal Co Ltd [1921] 1 KB 616
Hanson v Radcliffe Urban District Council [1922] 2 Ch 490
Attorney-General (Vic) v Commonwealth [1945] HCA 30; (1945) 71 CLR 237
Law v National Greyhound Racing Club Ltd [1983] EWCA Civ 6; [1983] 1 WLR 1302
R v Lloyd's of London; ex p Briggs & Ors [1993] 1 Lloyd's Rep 176
Mercury Energy Ltd v Electricity Corporation of New Zealand [1994] 1 WLR 521
State of Victoria v Master Builders' Association of Victoria [1995] 2 VR 121
Minister for Arts, Heritage and Environment v Peko-Wallsend Ltd (1987) 15 FCR 274
Williams Construction Ltd v Blackman [1995] 1 WLR 102
R v Panel on Take-overs and Mergers; ex p Datafin PL [1987] QB 815
Hughes Aircraft Systems International v Airservices Australia (1997) 146 ALR 1
Wade Administrative Law (7thed.) Clarendon Press, Oxford, 1994
MBA LAND HOLDINGS PTY LIMITED v GUNGAHLIN DEVELOPMENT AUTHORITY and KATHERINE CARNELL, GARY HUMPHRIES, WILLIAM STEFANIAK, BRENDAN SMYTH and MICHAEL MOORE Constituting the ACT EXECUTIVE
No. SC 271 of 2000
Judge: Higgins J
Supreme Court of the ACT
Date: 18 October 2000
IN THE SUPREME COURT OF THE )
) No. SC 271 of 2000
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN: MBA LAND HOLDINGS PTY LIMITED
Applicant
AND: GUNGAHLIN DEVELOPMENT AUTHORITY
First Respondent
AND: KATHERINE CARNELL, GARY HUMPHRIES, WILLIAM STEFANIAK, BRENDAN SMYTH and MICHAEL MOORE Constituting the ACT EXECUTIVE
Second Respondents
Judge: Higgins J
Date: 18 October 2000
Place: Canberra
THE COURT DECLARES THAT:
1. The decision made by the Gungahlin Development Authority (GDA) to offer to grant Landco Pty Ltd (Landco) a lease of Block 2 Section 1 Gungahlin is invalid and is set aside ab initio.
2. The GDA acted unlawfully in considering the tender of Landco as if the price offered by it for the said lease was $6,080,000 (exclusive of GST) rather than $5,700,000 (whether inclusive or exclusive of any GST).
1. This is an application by MBA Group Pty Limited (MBA) seeking relief against the Gungahlin Development Authority (GDA). MBA is a developer of land with considerable experience in planning, developing and marketing residential housing estates and commercial centres. GDA is a statutory authority established pursuant to the Gungahlin Development Authority Act 1996 (ACT) (the GDA Act).
2. Under s 5 the GDA is a body corporate. It may acquire, hold and dispose of real and personal property. It may sue and be sued. It is an agency of the Australian Capital Territory Government (the Executive). The principal object of the GDA, according to s 6 of the GDA Act, is:
" . . . to ensure that the Gungahlin Central Area is developed in accordance with the principles and policies for that area set out in The Territory Plan in order to provide for the social and economic needs of the community."
3. Pursuant to s 7 of the GDA Act the functions of the GDA are:
"(a) to be an agency for the provision, development and management, on behalf of the Territory, of land in the Gungahlin Central Area;(b) to undertake, promote and co-ordinate the development of land in the Gungahlin Central Area;
(c) to exercise such functions on behalf of the Executive as it is authorised to exercise by a law of the Territory or by an instrument;
(d) where appropriate for the purpose of discharging its other functions - to construct buildings, structures and facilities (including community facilities) and to manage and maintain them, or to participate in such construction, management or maintenance; and
(e) to act as a concurring authority for controlled activities for the purposes of the Land (Planning and Environment) Act 1991 and as an advisory body in relation to implementation plans for the purposes of the Buildings (Design and Siting) Act 1964."
4. The exercise of those functions are enjoined to be performed:
"7. (2) The Authority shall perform its functions -(a) in a manner that is consistent with the social and economic needs of the Territory;
(b) in accordance with prudent commercial principles;
(c) in consultation with residents of the Territory and, in particular, of Gungahlin;
(d) in a manner that exhibits a sense of social responsibility by having regard to the interests of the community in which it operates; and
(e) where its activities affect the environment - in compliance with the principles of ecologically sustainable development."
5. Subsection 7(3) further defines "ecologically sustainable development".
6. By s 8 the GDA is granted powers to (inter alia):
* grant leases of land on behalf of the Executive (s 8(2)(a))
* enter into any contract (or arrangement) with any person for the doing of anything that the GDA is authorised to do under the GDA Act.
7. The GDA could, if it chose, itself plan and carry out building developments of the kind now under consideration (see s 8(2)(c), (d), (e), (f), (i)).
8. The GDA decided to call tenders for the development of a tract of land in the Gungahlin area, Block 2 Section 1 Gungahlin, to be known as Yerrabi Estate - Stage 1 (the land). The successful tenderer would be offered a lease of the land.
9. The GDA caused tender documents to be prepared and issued accordingly.
10. The tender called for proposals for the development of the land (an area of 24.44 ha) so as to provide "a maximum of three hundred and forty (340) residential dwellings". The "Introduction" declared that the GDA was:
" . . . seeking a range of exciting housing options that will cater for the different life styles and needs of the community and optimise the liveability of the Estate".
11. Tenderers, in submitting their tender, were to agree to certain terms. Clause 2.3 provided:
"Tenders received after 4.00 pm on Friday, 4 February 2000 will not be accepted."
12. That was over-stamped "FRIDAY 18 FEBRUARY 2000" as a result of a request made on 1 December 1999 from MBA for an extension of time.
13. The tender documents were prepared and advertised on 20 November 1999. There were some addenda published in late December 1999.
14. Pursuant to cl 2.4 tenderers agreed that they had made their own "enquires" (sic) as to all relevant matters including "the potential impact of the Goods and Services Tax (GST)".
15. Tenderers were also informed that (cl 2.5):
"The Authority will not enter into any negotiations whatsoever, before determining the preferred tenderer."
16. Tenderers were, however, before that determination permitted to seek "clarification" of the conditions of tender. Similarly, the GDA was permitted to seek clarification of the response of tenderers thereto.
17. The GDA, under cl 2.6, clearly recognised that it might be desirable, if not necessary, to circulate questions asked of or by individual tenderers and the responses thereto to all other tenderers. That would require the exercise of judgment whether those questions and answers were such as might impact on the form of the response from tenderers or, after receipt of responses, give an unfair advantage to a tenderer.
18. That same requirement for fairness was recognised under cl 2.7 (amendment of Request for Tender). Any amendment of the tender documents by the GDA was to be subject to "concurrent advice to Tenderers".
19. Clause 2.17 set out "Tender Evaluation Criteria". They were,
"(a) The amount offered for the lease;(b) Demonstrated financial and management capacity to undertake the proposed development;
(c) Experience in the development industry and capacity to undertake a development of this quality and nature; and
(d) Overall response to the Authority's stated objectives for the development of Yerrabi Estate Stage 1 (as set out in paragraph 3.4.1 of this document and Clause 2.4.1 of Annexure 2 to the Draft Deed of Agreement at Attachment 4) which takes into consideration such factors as -
* design excellence;
* innovation;
* commercial feasibility; and
* public benefit."
20. The criteria noted above were said to be in no particular order of priority.
21. Clause 2.18 expressly stated that the GDA was under no obligation to accept the highest or any particular tender. It also stated -
"The Authority reserves the right to negotiate with the tenderer of the highest amount offered, however it will be under no liability if it chooses not to do so."
22. Clause 2.20 provided:
"Unless and until an offer is accepted by the Authority's entry into a written contract, no contractual relationship exists between a Tenderer and The Authority."
23. The successful tenderer, under cl 3.2, would be required to enter into a "Holding Lease" and a "Deed of Agreement". The "Holding Lease" was to continue whilst the agreed works remained to be completed. On completion, land would progressively be surrendered and made the subject of individual residential leases.
24. Clause 3.3 "GOODS AND SERVICES TAX" has some relevance. It provided:
"The Tenderer should note that The Goods and Services Tax (GST) may apply to goods delivered and services performed after 1 July 2000.The sale of the site is conditional upon the Lessee designing and constructing at its own cost the Works as set out in the Deed of Agreement. Neither the Authority nor the Territory accepts any responsibility for any costs (including GST) incurred in the construction of the Works."
25. The draft Deed (Attachment 4) was consistent with the notified conditions of Tender. It reiterated that, in submitting a tender, tenderers were relying on their own understanding of the documents and their own skill and judgment.
26. Clause 6.18 of the draft Deed made it clear, if clarity was needed that the GDA was empowered to vary the specified Works.
27. Annexure A1 (List of Works) makes it plain that in tendering, a tenderer was offering not only to take up a lease at a premium but also to carry out infrastructure and off-site works (the off-site Works). Whilst the developer would, no doubt, construct and sell dwelling units for profit, the price to be paid for that commercial opportunity was not only the price to be paid for the lease but also the value of the off-site Works.
28. Annexure A2 contained "Special Project Conditions", including some prescriptive provisions. For example, at A 2.1.2 (sheet 5), it is stated:
"Proposals which result in the number of dwellings specified for the Estate exceeding 340 dwelling units will not be accepted."
29. An "addendum", issued 22 December 1999, made some minor amendments to the requested proposal. Tenderers were informed that:
"Double garages with entry from the street address on blocks less than fifteen (15) metres are not preferred." (Indeed at the bottom of Sheet 11, it was stated that the same "will not be permitted.")
30. There was a further addendum relating to blocks of less than 10 meters width.
31. Between 14 December 1999 and 7 February 2000 Mr Peter Brady, Projects Director of GDA, met with various prospective tenderers or their representatives to provide explanations of issues associated with the tender process.
32. MBA had formed a consortium for the purposes of tendering, known as Canberra Estates Consortium (CEC). Mr Ken Ineson (of MBA) was appointed Project Manager. It was his responsibility to prepare the tender.
33. Mr Ineson noted that no relative weighting of the criteria in cl 2.17 of the tender document was specified. He was unsure, for example, whether priority should be given to offering increased value of off-site Works (public benefit) or an increased lease premium.
34. On 17 December 1999, Mr Ineson consulted with Mr Brady. He was told there was no prior weighting assigned to the assessment criteria. Mr Brady offered the advice that it was to be "a holistic assessment".
35. Mr Ineson consulted again with Mr Brady on 25 January 2000 "to try and determine the planning and urban design features which might appeal to the GDA".
36. Mr. Ineson met with Ms Anne McGrath, Chief Executive Officer of the GDA, on 1 February 2000. This was to further clarify the advice from Mr Brady. Ms McGrath is an administrator not an expert. Mr Ineson was given some information contradictory of that given by Mr Brady. It is not necessary to refer particularly to those contradictions (for example, urban housing "preferred" (Ms McGrath) - "no view" (Mr Brady)).
37. Mr Ineson prepared and, on 18 February 2000, submitted a tender on behalf of CEC.
38. The price offered for the proposed lease was $6,410,000. It was expressed as "inclusive of GST". It became apparent to Ms McGrath, on inspecting the tenders after the closure date, that not all tenderers had expressed a view as to whether their price was inclusive or exclusive of GST.
39. Accordingly, she wrote to each tenderer on 23 February 2000 asking those who had not done so to specify their price inclusive and exclusive of GST.
40. So far as the GDA was concerned the only issue for it was whether the tender price included a notional collection of GST for the holding lease, if granted after 30 June 2000, or for the subsequent grant of individual leases as the development proceeded.
41. GST to be collected by the developer on sales or paid by the developer to suppliers was no concern of the GDA.
42. On 23 February 2000, MBA responded that CEC's price was inclusive of GST but it was concerned that the granting of the holding lease might be delayed beyond 30 June 2000. It, therefore, reserved the right to withdraw its tender if the contract had not been awarded after 45 days. Mr Ineson recognised the possibility that the GDA may have had to account for GST on the price paid for the holding lease if it was granted after 30 June 2000, making CEC's price less attractive after that date than a price exclusive of GST.
43. The GDA had already recognised that there was doubt about whether the grant of the holding lease was a taxable transaction so that it might attract a GST obligation.
44. At this time, MBA was unaware of the price bid by the other tenderers. In fact Landco Pty Ltd (Landco), the tenderer ultimately preferred, had bid $5,700,000. On receipt of Ms McGrath's enquiry, it responded by advising that its price "exclusive of GST" was $6,080,000.
45. In truth, this amounted to an increase of the tender price by $380,000 plus any GST payable. That, coincidentally, made Landco's price the next highest after CEC. It was, however, an objectively untruthful statement. If Landco's original price had included an allowance for liability for GST then, unless it was increasing its offer, the price exclusive of GST would be less, not more than $5,700,000. If it was exclusive of GST, then the price was $5,700,000 plus GST. On no view, is $6,080,000 "exclusive of GST" the same as $5,700,000 whether inclusive or exclusive of GST. It is clear that, accidentally or otherwise, Landco was permitted, in breach of the terms of tender, to substantially raise its offer price after tenders had closed.
46. There is, I must emphasise, no evidence of bad faith on the part of the GDA, merely a failure to analyse and understand the possible impact of a GST on the price it was being offered. As to whether Landco understood that it was, in essence, "ringing the changes" on the GDA, I cannot determine.
47. Ms McGrath recognised that changes in the conditions of tender needed, at least as a matter of probity, to be notified to each tenderer for response. For example, one tenderer was prepared to pay more if Stage 1 could be expanded by 30 blocks. Had that been permitted, Ms. McGrath accepted that each tenderer would have had to have been offered the same opportunity.
48. An issue was raised by one tenderer on 10 March 2000 seeking, after tenders had closed, to offer a higher than requested level of "interdependent and `off-site' works".
49. The GDA responded, somewhat curiously, by asking each tenderer to specify the cost of its proposal for off-site Works. The price which tenderers had been requested to offer was the premium for the lease and the construction of (at least) specified `off-site' Works. The value of those off-site Works to the GDA was not measurable by reference to the cost thereof to the developer. Nor was it clear what, if any, off-site Works additional to those specified were being referred to. Thus MBA asserted in its response, whether or not commercial confidentiality was a problem, that cost to the developer was irrelevant, (save, perhaps, to reassure the GDA that the developer had made a realistic offer). That was a realistic and correct response. Further, the GDA's response to the unidentified (to the Court) tenderer's request was not relevantly reactive to the request.
50. Each of the tenderers was invited to make a presentation to the GDA. Mr Ineson made a presentation on behalf of CEC on 16 March 2000. He reiterated the point concerning the relevance of the cost of off-site Works. The other tenderers had provided cost estimates for the off-site Works as requested by GDA.
51. Having requested and received those cost estimates, however, Ms McGrath, according to her evidence, decided not to take them into account. She does not indicate why that decision was made. It may have been a belated realisation that the value of the off-site Works, which GDA could assess for itself, was the relevant consideration as MBA had suggested.
52. There was reference in the evidence to a person referred to as the "Probity Auditor". The role of that person is obscure. If it was to ensure the fairness of the tender process, it does not seem to have been entirely successful. Indeed, the very involvement of that person and the secret advice he or she may have offered is a cause for concern. The advice given by the Probity Auditor does not seem to have alerted the GDA to a possible lack of relevance or fairness in some aspects of the evaluation process it was undertaking.
53. There is also reference to the use of "Morris Consultants" to assist the Authority to evaluate the tenders. Their role differed from that of the "Probity Auditor".
54. Morris Consultants, according to Ms McGrath's evidence, were engaged to advise on the weightings to be placed on the various evaluation criteria so as to support the GDA's conclusion that Landco's tender was the best.
55. Ms McGrath was unable to offer any rationale for the use of this process to evaluate tenders other than that it enabled the GDA to give the appearance of having made an objectively rational decision whether or not that was indeed the case.
56. It was Ms McGrath's contention that the GDA had agreed, before Morris Consultants were engaged, to use a 40:40:10:10 weighting for the four enumerated criteria exposed in the tender documents. The 40% weightings were to be given to "price" and "overall response to the GDA's requirements". The 10% weightings were to be accorded to "financial stability" and "project management expertise".
57. At this time, it appears that Mr Bob Winnel, managing director of MBA, became concerned that CEC's refusal to provide costings of off-site Works might be viewed adversely by the GDA.
58. On 29 March 2000, he faxed a letter dated 28 March 2000 to the GDA expressing concern that if the GDA took account of the stated cost to tenderers of off-site Works, it might distort the tender process by permitting a tenderer, by exaggerating those costs, to appear to be offering a higher "package" of benefits to the GDA in dollar terms.
59. Mr Winnel also sought to be advised if, as he had heard from undisclosed sources, CEC was the highest conforming tenderer. If so, he requested an opportunity "to discuss any perceived weaknesses in our tender (if there are any)". The source of Mr Winnel's belief was not explored in the evidence. It does create some doubts about the efficacy of the GDA's information security systems (if any).
60. That afternoon, Ms McGrath and Mr Brady of the GDA met with Mr Hans Sommer of MBA. Mr Sommer was reassured by them that the lack of costings of off-site Works would not be viewed adversely. They further advised that tenders would be considered and a decision as to the successful tenderer made at the GDA's next meeting on 13 April 2000. The successful tenderer would be advised by 19 April 2000.
61. Mr Winnel's letter of 28 March 2000 was formally "withdrawn" at the meeting of 29 March 2000. Mr Winnel sought to confirm this withdrawal on 30 March 2000, both orally and in writing.
62. On 11 April 2000, Mr Winnel wrote again to the GDA. This time it concerned the "weightings" to be accorded to the four criteria notified to tenderers.
63. This caused another curious anomaly to be revealed. It will be recalled that, between the March meeting of the GDA and the April meeting at which the successful tenderer would be decided, the GDA had engaged Morris Consulting to advise on the evaluation of the tenders. The GDA had already, by then, at least informally, decided that the Landco tender was preferred. To what extent, if any, this decision was influenced by the increase in the lease price offered by Landco after tenders had closed was not addressed in the evidence.
64. The minutes of the GDA's meeting of 16 March 2000 contain no record of any decision, before Morris Consulting had been engaged, to accord the 40:40:10:10 weightings referred to. Nevertheless, Ms McGrath stated in evidence that she had, before that meeting concluded, proposed that those weightings be adopted. She stated that they were adopted accordingly. Mr Brady was the minute secretary. He did not record this apparently significant event. The minutes of the March meeting as drafted by Mr. Brady were considered by Ms McGrath before the 13 April meeting, but she claimed she failed to notice the omission of this matter from them. She explained that the omission occurred because Mr Brady was temporarily out of the room. She omitted to inform him of the adoption of the resolution after his return.
65. The consultants were engaged on 28 March 2000.
66. Their area of consideration seems to have been the mathematics of various models of evaluation. They did not address the "score" to be given to any individual tenderer. The result of their evaluation was, Ms McGrath said, only useful as a "tool" to explain any decision taken. She stated that she did not, in any event, understand the modelling process used by them.
67. Ms McGrath conceded that the "numbers" arrived at by the consultants really did not matter. The overall result had already been agreed. The "numbers" were used and adjusted so as to provide some apparently objective justification for the result already arrived at. The substantive question addressed was, in truth, whether the extra dollars offered by CEC made it worth accepting their proposal with all its deficiencies, (as the GDA perceived them) rather than the Landco proposal. In each case, of course, it was open to the GDA to later request amendments to the proposal of the successful tenderer.
68. Although Ms McGrath's evidence was somewhat unpersuasive as to whether weightings of the selection criteria had been adopted before Morris Consulting was engaged, there seems no reason, in my view, to doubt that the GDA genuinely preferred the Landco proposal to that of CEC. Nevertheless it seems strange that a significant amount of public money would be devoted to a process which was not, apparently, designed to effect any useful purpose.
69. On 11 April 2000, Mr Winnel wrote to the GDA concerning the "weighting of the tender criteria". He had assumed, from something Ms McGrath had said that all four tender criteria were to be given equal weighting.
70. On 13 April 2000, the Chair of the GDA, Mr Laurie Willett, responded somewhat cryptically to Mr Winnel:
"I am advised that [Ms McGrath] did not indicate to any external party the priorities allocated to the selection criteria."
71. On 17 April 2000 another letter emanated from MBA. In it, Mr Winnel raised concerns about possible bias on the part of a particular adviser to GDA. That matter has not been subsequently pursued and, to my mind, nothing turns on it.
72. The offer of lease to the successful tenderer was to be made on 20 April 2000. There was a subcommittee appointed by the GDA, which was authorised to make the final decision. A "first report" of the subcommittee was not prepared until 20 April 2000.
73. At page 3, that report ranked Landco No.1 and CEC No.3 in the order of preference. The identities of other tenderers was not revealed in the document tendered in evidence. It stated:
"The sub-committee is unanimously of the view that the Landco submission is superior to all others and the Top Dec modelling supports this."
74. It may be observed that the "Top Dec modelling", the process undertaken by Morris Consulting, only supported the proposition that the mathematical expression of the "marks" allocated to the tenderers for the various aspects of their tender supported the conclusion if the weighting ratios 40:40:10:10 were adopted. The same conclusion would have followed without the need for any "modelling".
75. So far as the cash price offer was concerned, the report noted (p 4):
"The cash return per block of the highest ranked tenderer is $17,882. This is a good return per block for this estate, noting that at least $1.6 m is being invested in off-site works . . ." (emphasis added).
76. That indicates that the subcommittee did precisely what the GDA had assured CEC that it would not do; that is, to assess the cost of off-site Works to the developer rather than their value to the Territory. As against that, it did, also, favourably remark on the "quality" of the off-site Works proposed by Landco and their relationship to the overall design of the estate.
77. In effect, the subcommittee was attracted more by the Landco proposal than the CEC proposal. It recommended, in light of Landco's assertion that its price of $6.08 m for the lease was "exclusive of GST", that the GDA should vary the price if GST was imposed so as to add to the tender price any GST payable by it.
78. The evaluation of the tenders then proceeded on the basis (p 4) that "all tenders are assumed to exclude GST". That effectively ignored CEC's statement that its price included GST. It further overlooked the adjustment by Landco to its tender price allegedly to take account of GST.
79. The report of the subcommittee provides no objective reasons for the subcommittee's collective preference for the Landco proposal rather than the CEC proposal. Of course, that is not, in itself, surprising. Matters of taste and value judgment played, no doubt, a significant role in their conclusion.
80. It has been submitted that, compared with CEC's tender, the Landco tender offered a response that failed, in a number of respects, to address what were stated to have been essential or nearly essential requirements of the GDA. That submission will be addressed later. It raises a question as to the scope of any review of the GDA's decision.
81. The offer of lease was accepted by Landco on 27 April 2000. Landco tendered, and the GDA accepted, a $608,000 deposit.
82. On 30 April 2000, MBA, on behalf of CEC, obtained an interim order restraining further steps being taken to perfect the award of the tender to Landco.
83. On 15 May 2000, the GDA filed and delivered to MBA, pursuant to an order made by Crispin J on 9 May 2000, a statement of "Reasons" for its decision to prefer Landco as the successful tenderer.
The Statement of Reasons
84. I will later consider whether the decision made by the GDA was a decision to which the Administrative Decisions (Judicial Review) Act 1989 (ACT) (ADJR Act) applies.
85. The "Statement of Reasons", proffered on the basis that the ADJR Act might be applicable, set out the background to the receipt and evaluation of tenders generally.
86. In that Statement, the GDA asserted that it had accorded a 40:40:10:10 weighting to selection criteria. It had, it said, paid due regard to its objectives as set out in the GDA Act.
87. It noted that CEC had been ranked third. The evaluation of the second tender was not referred to. It did, however, submit that, because CEC was not ranked second, its claim was futile. That submission will also be later considered.
88. There followed then, in paragraphs 31-40, a positive description and evaluation of the Landco proposal. Paragraphs 41-51 set out and commented upon the CEC proposal. The GDA acknowledged that whilst CEC had offered a conforming tender, it noted that:
"CEC's submission is, overall, a poor response to the Authority's objectives for the Estate. The concept plan does not compare favourably with the preferred tenderer and others in a number of critical areas . . ."
89. Further criticisms were that the CEC submission did not offer "strong integration" of the development with the town centre. It "resists", it was said, the "development of more urban housing in key locations". The "significance of structure generators for the estate is weakened". The critique continued. Though the proposed landscaping was "satisfactory", it was "less" so than Landco's proposal. There was "poor resolution of urban design problems". The "Hub" proposal, central to the design concept, was considered "flawed".
90. These criticisms are all matters concerning perceived design aesthetics or dynamics. No doubt other relevantly qualified persons would disagree with these criticisms. It is clear that some do.
91. Even if this was a merits review, there is no way a non-expert tribunal, such as this Court, could adjudge that the criticisms of the CEC proposal compared with Landco's, were inappropriate or mistaken. They certainly cannot be said to be so unreasonable that no tribunal of fact could lawfully adopt them. No principle of law is relevant to the "design" choice made by the GDA.
92. It must be remembered that the scope of this review is more limited than a merits review. It is, essentially, limited to the substantive fairness of the process and identification of any error of law.
93. There is no error of law in the conclusion to which the GDA came that the urban design reflected in the Landco proposal was superior to that of CEC.
94. This, of course, was not an end to the process. Landco's offer of a cash sum was $330,000 less than that of CEC. That sum was itself the result of an impermissible increase in the Landco offer after tenders had closed which narrowed the gap between them by $380,000 (assuming no GST). It was further confused by the GDA's unilateral decision that all tenderers would be regarded as tendering a price "exclusive" of GST, even if, as CEC did, it was stated otherwise.
95. Nevertheless, apart from the legal impact, if any, of the price revision Landco achieved for itself, it was not an error of law for GDA to consider that the perceived design excellence of Landco's proposal compared with CEC (and the second ranked tenderer) outweighed the apparent dollar difference between their respective offers. It does mean that the issue as to whether that design excellence, given the GDA's power to propose amendment of the submitted design of the preferred tenderer, would have outweighed a $710,000 difference in favour of CEC's tender, was not addressed.
The challenge to the GDA decision
96. The amended application for review of the GDA decision was lodged 11 May 2000. It was further amended on 24 May 2000. The original application was dated 1 May 2000.
97. That application was made pursuant to s 5 or, in the alternative, s 6 of the ADJR Act. The former relates to a "decision" made under an enactment. The latter to "conduct for the purpose of making a decision" under an enactment. The "decision" referred to in either case is alleged to be a decision by the GDA, pursuant to a statutory power given to it by the GDA Act, to grant a lease of the subject land under s 161 of the Land (Planning and Environment) Act 1991 (ACT) (the "Land Act").
98. Six grounds were relied on in the application for review:
"1. That a breach of the rules of natural justice occurred in connection with the making of the decision.Particulars
a) Failing to indicate to all tenderers that the criterion "overall response to the Authority's stated objectives" would be given equal weight with the criterion "the amount offered for the lease".
b) Giving information concerning the criterion "overall response to the Authority's stated objectives" to individual tenderers privately and not supplying that information to all tenderers.
1A. Procedures that were required by law to be observed in connection with the making of the decision were not observed.
Particulars
a) The respondents were required by section 169 of the Land (Planning and Environment) Act 1991 to obtain payment for the lease, which is not less than market value.
b) In accordance with paragraph 7(2)(b) of the Gungahlin Development Authority Act 1996 the 1st Respondent was required to perform its functions in accordance with "prudent commercial principles".
c) The 1st Respondent breached these requirements as follows.
i) It declined to accept the highest tenderer as a result of the following process of tender evaluation.
ii) It evaluated the successful tenderer, Landco by reference to the assumed value of off-site and interdependent works.
iii) Its evaluation was based upon certain "preliminary plans" and an "indicative site layout" when no subsequent obligation would arise upon a successful tenderer to complete works upon the lease in accordance with those plans or that layout.
d) The tender documents failed to indicate a priority between the criteria against which tenders were to be assessed thereby reserving a discretion to the 1st Respondent as to which tenderer would be selected.
2. The making of the decision was an improper exercise of the power conferred by the enactment under which it was purported to be made in that it took irrelevant considerations into account and failed to take relevant considerations into account.
Particulars
a) The 1st Respondent took into account tenderers' costing of offsite and interdependent works.
b) The 1st Respondent failed to take into account that there is no obligation upon a successful tenderer to build the works in the "preliminary plans" and an "indicative site layout".
c) The tender assessment failed to take into account that the plans submitted by the successful tenderer, Landco involved the construction of houses on land which was not part of the lease for which tenders were called to wit the triangular shaped piece of land opposite Yerrabi Pond Island and marked for open space in Annexure A1 Sheet 1 of 2 in the tender documents.
d) The 1st Respondent failed to take into account whether it was obtaining market value for the lease.
e) The plans submitted by the successful tenderer Landco included the provision of road intersections which were not controlled in accordance with ACTCode element 6 performance measure 6 as required by section 3.4.1 of the tender documents.
f) Failing to assess traffic control measures of the Landco plan - the plans submitted by the successful tenderer Landco did not comply with PALM Energy Guidelines referred to under A2.1.2(g) of the Deed of Agreement in the tender document and ACTCode element 1 performance measure 3.
g) Failing to assess the solar access of houses proposed in the Landco plan by reference to block orientation.
h) The tender assessment fails to take into account that the plan submitted by Landco proposed in excess of 340 residential blocks in breach of the tender conditions.
i) The tender assessment fails to take into account that the Landco tender will not preserve trees in Precinct B in accordance with the tender document.
j) Failing to consider the provisions of the Variation to the Territory Plan for Gungahlin Town Centre in particular sections 2.2 and 2.3 of the Variation.
3. The making of the decision was an improper exercise of the power conferred by the enactment under which it was purported to be made in that the exercise of the power was so unreasonable that no reasonable person could have so exercised the power.
Particulars
a) Evaluating the tenders by reference to works which ultimately did not have to be built by the successful tenderer.
b) Evaluating the tenders by reference to the costing of works which ultimately did not have to be built by the successful tenderer.
c) Drawing the conclusions about the appellant's tender as set out in paragraphs 30 and 31 of the affidavit of Mr Ineson.
4. The decision involved an error of law or was otherwise contrary to law.
Particulars
a) The decision did not comply with the requirements of section 169 of the Land (Planning and Environment) Act 1991 and was not undertaken in accordance with paragraph 7(2)(b) of the Gungahlin Development Authority Act 1996.
b) The 1st Respondent failed to obtain market price for the lease granted.
c) The 1st Respondent decided to grant the lease on the basis that the figure offered by Landco "was within the range of reasonable value for the estate" rather than it was for payment of an amount which was not less than market value.
d) The decision breached section 161 of the Land (Planning and Environment) Act 1991 in that it was not the result of a valid tender because:-
i) the tender document had not indicated to prospective tenderers the weighting of the criteria against which the tenders were to be judged; and
ii) by reserving to the 1st respondent a discretion to determine the weighting of the criteria it would use for assessing the tenders until after the tenders had closed, the purported tender document preserved an unfettered discretion to the 1st Respondent to nominate the successful tenderer.
e) The decision breaches the principles of fair dealing which are implied into the tender in that:-
i) by reserving to the 1st Respondent a discretion to determine the weighting of the criteria it would use for assessing the tenders until after the tenders had closed, the purported tender document preserved an unfettered discretion to the 1st Respondent to nominate the successful tenderer;
ii) the plans submitted by the successful tenderer, Landco involved the construction of houses on land which was not part of the lease for which tenders were called to wit the triangular shaped piece of land opposite Yerrabi Pond Island and marked for open space in Annexure A1 Sheet 1 of 2 in the tender documents and the appellant was not informed that it could submit a plan with houses on the same piece of land;
iii) the appellant was informed that the 1st Respondent had no preference for rear lanes when subsequently rear lanes were regarded as a positive feature;
iv) for the reasons set out in paragraphs 34 and 35 of the affidavit of Mr Ineson;
v) permitting the successful tenderer to increase the amount offered after the close of tenders from 5.70m to 6.08m.
5. In the event that a decision to grant the lease has not been made, the preceding grounds are repeated as the conduct of the 1st Respondent against which the application is brought."
99. The response of GDA to those allegations is, first, that no reviewable decision was made or was in prospect. Thus any defect in the tender process adversely impacting on CEC could only be the subject of proceedings for breach of an implied agreement to carry out the tender process differently. Judicial review under the ADJR Act is not open.
100. Even if the tender process was open to judicial review, the GDA contended that no defect appeared in it sufficient to vitiate the result of the tender process.
Is the "decision" to award the offer of a lease amenable to judicial review?
101. The land in question is "Territory Land" within the meaning of s 28 of the Australian Capital Territory (Planning and Land Management) Act 1988 (Cth) (PALM Act).
102. Section 29 of the PALM Act provides:
"(1) The Executive, on behalf of the Commonwealth:(a) has responsibility for the management of Territory Land; and
(b) subject to section 9 of the Seat of Government (Administration) Act 1910, may grant, dispose of, acquire, hold and administer estates in Territory Land.
(2) The Executive shall perform its functions under subsection (1) subject to enactment and in accordance with the principles
(a) that new estates in Territory Land shall be granted only in accordance with procedures that are notified to the public; and
(b) that appropriate classes of decisions relating to the administration of estates in Territory Land shall be subject to just and timely review without unnecessary formality.
(3) The term of an estate in Territory Land granted on or after Self-Government Day shall not exceed 99 years or such longer period as is prescribed, but the estate may be renewed.
(4) The Authority may intervene in any proceedings for review of a decision relating to the administration of an estate in Territory Land."
103. Both the Land Act and the GDA Act are "enactments" for the purposes of the ADJR Act.
104. The GDA is a statutory corporation empowered to act on behalf of the Executive (inter alia) in granting a lease of Territory Land (see s 7(1)(c) of the GDA Act). Its powers under s 8 of the GDA Act are wide enough to include a decision to call tenders for the disposal of Territory Land in the Gungahlin area and, then, to grant a lease of that land on behalf of the Commonwealth to a preferred tenderer.
105. The Territory legislature has empowered the Executive to grant leases of Territory Land on behalf of the Commonwealth subject to s 161 (inter alia) of the Land Act. That provides (relevantly) that the Executive may grant such a lease by "calling tenders for the grant of the lease" (s 161(1)(b) Land Act).
106. The lease may:
"... include provisions -(a) requiring the lessee to develop the land comprised in the lease or any unleased Territory Land in a specified way." (s 161(2)(a))
107. The GDA relied upon Australian National University v Burns [1982] FCA 191; (1982) 43 ALR 25. The ANU, under its incorporating statute, had power to engage and terminate the appointment of staff. Professor Burns sought review of the decision to terminate his contract of employment. Bowen CJ and Lockhart J, at 32, said:
"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."
108. Burns' case (supra) was applied to a decision to transfer a police officer, appointed pursuant to the Australian Federal Police Act 1979 (Cth), taken by the Commissioner in the exercise of the power of general administration granted by the GDA Act (see Sellars v Woods (1982) 45 ALR 113). The latter was held not to be a reviewable decision. A direction to work standard hours was also held not to be a reviewable decision (see Bayley v Osborne (1984) 4 FCR 141).
109. The specific matter of the calling and evaluating of tenders was considered in General Newspapers Pty Ltd v Telstra Corp [1993] FCA 473; (1993) 117 ALR 629. The "decision" in that case was one not to call tenders but instead, to enter into a contract with an existing supplier.
110. Davies, Gummow and Einfeld JJ held that review was not open under the ADJR Act (Cth). At 636-7, Davies and Einfeld JJ stated:
"A contract entered into by a corporation under a general power to enter into contracts is not given force and effect by the empowering statute. The empowering statute merely confers capacity to contract, whilst the validity and effect of the contract is determined by the ordinary laws of contract."
111. That decision was followed by Neaves J in CEA Technologies Pty Ltd v Civil Aviation Authority [1994] FCA 1180; (1994) 122 ALR 724 in respect of a decision, pursuant to a call for tenders, to award a contract otherwise than to the applicant. The CAA in that case was constituted similarly to the GDA.
112. Numerous other cases have followed and applied the General Newspapers (supra) decision.
113. That is not to say that the tendering process undertaken by public authorities such as the GDA will always be outside the scope of judicial review. Davies and Einfeld JJ recognised this in General Newspapers at 637:
"It is unnecessary to consider the exceptional case where it may be proper to bring a proceeding under the ADJR Act because an act or thing, such as a contract, may have been entered into for an ulterior purpose, such as private gain, and the validity of the act is challenged by reference to the statute under the general aegis of which the act or thing is done. If the challenge to validity is made by reference to a federal [read "Territory"] enactment, then the challenge may be appropriate, even in relation to a contract because the statute affects the force and effect of that which was done. Nor do we suggest that there may not be instances under the ADJR Act where relief could include the setting aside or the declaring void of a contract."
114. Reference was made by way of example, to Gerah Imports Pty Ltd v Minister for Industry, Technology and Commerce (1987) 14 ALD 351; 17 FCR 1.
115. In that case an instrument made under the Customs Act 1902 (Cth) had specified a scheme for the calling of tenders for the right to enter goods for home consumption at concessional rates of duty. It was accepted by Davies J that the decision to accept the tender of the successful tenderer was open to judicial review. The application was unsuccessful for other reasons.
116. The present case differs from General Newspapers in two respects. First, in this case, tenders were in fact called. As a result, tenderers were entitled to expect a fair and even-handed consideration of their claims to be awarded the lease of the land in question. Secondly, it is not only the decision to award the contract to Landco which is subject to the claim for review, but also the decision to exercise the Executive's power under s 161 of the Land Act to grant a lease of Territory Land to Landco.
117. There are, nevertheless, two difficulties in the face of MBA's contention that the proposed decision is amenable to judicial review.
118. The first is that s 161 of the Land Act merely authorises the grant of leases of land by the Executive. It does not prescribe any particular process for the grant of a lease to a particular person. In the words of Davies and Einfeld JJ in General Newspapers, subject to some express statutory conditions, s 161 seems to me otherwise to be (at 637):
"... a mere conferral of capacity to act. The contracts [read "leases"] were not relevantly authorised or required by and were not made under an enactment. The validity of the contracts and of the acts done was governed entirely by the law of contract, not by the statutes. Thus the ADJR Act had no application to the conduct or to the alleged decision."
119. There are some legislative limits on the power to grant leases under s 161 Land Act. They may not be granted for more than 99 years (see s 29 PALM Act). They must be granted in a manner permitted by s 161 Land Act (relevantly, for present purposes, by "calling tenders"). They shall not be granted "otherwise than for payment of an amount that is not less than the market value of the lease" (see s 169(1) Land Act).
120. The second difficulty is that the Land Act itself provides for the review of certain decisions taken under it. Those decisions are referred to in s 282A Land Act. Decisions under s 161 Land Act are not included within the list of reviewable decisions. The review authorised by s 282A is a merits review by the Administrative Appeals Tribunal (ACT). It is not limited to a review for legal or procedural error. The omission of s 161 decisions from s 282A lends some indirect support to the view that decisions to grant leases under s 161 are not intended to be subject to judicial review under the ADJR Act.
121. In my view, not only is the decision of the GDA to award the development contract to Landco not open to a merits review, it is not a decision under, or conduct leading to a decision under, an enactment so as to be amenable to review under the ADJR Act.
Is MBA a "person aggrieved"?
122. In deference to the arguments of counsel and bearing in mind the possible availability of alternative means of gaining relief, assuming that the tender process has been tainted by reviewable error, I proceed to consider the respondents' submissions that MBA was not a "person aggrieved".
123. Whilst in General Newspapers the disappointed prospective tenderer was held not to be a "person aggrieved" within the meaning of ss 5 or 6 of the ADJR Act, the same cannot be said of an unsuccessful tenderer.
124. Indeed, if there had been a contractual breach of the terms of the tender by the GDA, a disappointed tenderer could sue for damages for breach of that collateral contract. A decision not to call tenders would not, ordinarily, be a matter in respect of which any particular person who might have tendered could lawfully complain (see General Newspapers).
125. Hawker Pacific Pty Ltd v Freeland (1983) 52 ALR 185 is an example of a disaffected tenderer, albeit not being entitled to a review of the decision to award the tender to another, being held to be a "person aggrieved" by that decision.
That the grant of lease to Landco would be beyond power
126. If the award of the lease would be an act beyond the statutory powers conferred on the GDA, it would be ultra vires for it to close. A declaration might be made accordingly. There were two grounds relied upon by MBA in support of its contention that the award of the lease, as proposed, would be ultra vires.
127. The first ground was that to do so would breach s 169 of the Land Act. It was contended that to accept Landco's tender was to agree to grant a lease for less than "full market value".
128. Second, it was submitted the process adopted for the grant of a lease in this case was not, in truth, authorised by s 161(1) of the Land Act.
Full Market Value
129. Affidavit evidence from qualified expert valuers was presented by each side.
130. Mr John Armstrong, a valuer engaged by the GDA, opined that "market value" is:
"... the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction, after proper marketing, wherein the parties had each acted knowledgably, prudently and without compulsion."
131. He noted that seven tenders had been received by the GDA, offering premiums between $3,500,000 and $6,410,000 for the grant of the lease. The second highest price offered, he assumed, was the $6,080,000 offered by Landco. Mr Armstrong took the view that "a reasonable benchmark value" for the lease was $6,000,000. He was of the opinion that an "acceptable range for the market value is within 10% of that figure". Had he assumed that Landco's offer had been $5,700,000, it is not clear whether his estimate would have been as high as that, but I will assume that his opinion would not have been affected adversely to the GDA if that assumption had been made.
132. Mr Allan Wylucki, a valuer engaged by MBA, agreed with Mr Armstrong as to the definition of market value. He also, at least implicitly, agreed that the offers procured by the call for tenders provided relevant data for the assessment of "market value".
133. However, he disagreed with Mr Armstrong's conclusion from the sums tendered that $6,000,000 plus or minus 10% ($5.4m to $6.6m) represented the "market value".
134. Accepting the assumption that each tenderer had acted "knowledgably, prudently and without compulsion", it was Mr Wylucki's opinion that only the highest sum offered could represent "the market value". He rejected the notion that there could be a range of market values. Thus no less than $6,410,000 was full market value.
135. Mr Alfred Eves, lecturer in property valuation at the University of Western Sydney, was engaged in reply by the GDA. It was Mr Eves' opinion that:
"Any one offer does not necessarily represent evidence of "market value" transactions. Mere offers cannot be used to support a valuation figure. Comparable market evidence for market value is based on a contract being exchanged and settled."
And:
"... it may be reasonably expected that the market value for the land will be within the range represented by the offers arising out of the tender process."
136. Further, Mr Eves stated, some tenderers might offer a premium over "market value" reflecting their own profit expectations. In his view, the range $6,048,000 to $6,080,000, into which three of the seven offers fell, represented the area within which "market value" fell. The intermediate offer was $6,050,000. The lower offers were $5,610,000, $4,200,000 and $3,525,000. The highest offer, of course, was that of CEC, being $6,410,000.
137. It seems to me that there is some confusion as to the fact sought to be established. Section 169(1) does not prohibit the acceptance of a price for a lease above "full market value". It does prohibit a lesser price being accepted. That does not support the view that any offer necessarily represents "market value". I agree with Mr Eves that the offer of a price is not, though it may be evidence of it, the "full market value". Mr Wylucki's view is, in my opinion, erroneously based in this respect. It is too simplistic to assert that the highest or any other offer, higher than another, represents a true market value.
138. It has been accepted that "market value" may be represented by:
"The price which a willing, but not anxious, vendor would obtain from a person desiring to buy, rather than the price which an anxious vendor would obtain upon a forced sale."
(see Spencer v Commonwealth [1907] HCA 70; (1907) 5 CLR 418, 432).
139. That statement is, in my view, consistent with the definition adopted by the International Valuation Standard Committee in 1993 (referred to by Mr Armstrong).
140. "Market value" is not solely dependent upon the price offered by the highest bidder. A prospective purchaser to whom a parcel of land has a special value may offer more than market value (see Pastoral Finance Association Ltd v The Minister [1914] AC 1083, 1088-9).
141. It is value in the particular market for the land which must be assessed (see Brisbane Water County Council v Commissioner of Stamp Duties (NSW) [1979] 1 NSWLR 320).
142. The question of "special value" to a particular hypothetical purchaser who would pay more because it could develop the land more quickly (being the existing owner) was raised in Boland v Yates Property Corp Pty Ltd [1999] HCA 64; (1999) 167 ALR 575. The issue was whether it had been negligent for legal advisers to the owner (Yates) to fail to propound such a case. At issue was the compensation payable on resumption of the land. It was accepted that the value of the work done to gain development approval from relevant authorities was correctly added to and formed part of "market value". That submission had been propounded and accepted on Yates' behalf. The issue was whether Yates' position as owner, giving it a so-called "head start" advantage, added further to the market value of the land on the basis that any potential purchaser would need to pay a premium, on what otherwise would be the market value, to persuade Yates to sell.
143. Branson J had held that it was reasonable for counsel for Yates not to have advanced the "head start" argument.
144. A Full Court of the Federal Court disagreed. It held that the "head start" advantage enjoyed by Yates gave the land a "special value". It had been negligent of Yates' legal advisers not to advance that argument. There was an appeal to the High Court.
145. On that appeal, Gleeson CJ pointed out, at 596, that, in assessing value:
"There is a degree of tension between the concept of value as exchange value, which carries with it the notion that the value of something is the price the owner can get for it, and the concept of a special value to the owner over and above the price which a hypothetical purchaser would pay."
146. The test advanced in Spencer's case is, his Honour considered, "merely a useful and convenient method of arriving at market value", at 596-7:
"Market value, or the amount that would be realised from a sale in a market where the price is agreed by freely contracting parties, provides a measure of value from the perspective, not only of the particular purchaser and vendor, but also of others in the market who are not parties to the particular transaction. Special value to the owner directs attention to the perspective of the vendor."
147. Gaudron J agreed, agreeing also with Callinan J that Kennedy Street Pty Ltd v Minister [1963] NSWR 1252 should not be followed. In the latter case, Hardie J had held that "special value" to a particular owner of resumed land, represented by a subdivision approval it had obtained, should be added to the assessed "market value". The dissent from Hardie J's view was on the basis that "market value" included any realisable development opportunity. It was not a separate concept.
148. Gummow J also agreed with Gleeson CJ and with the observations of Callinan J also concerning the valuation method adopted by Hardie J in Kennedy Street (supra).
149. Kirby J noted that "head start" advantage had not, hitherto, been regarded as a concept separate from that "special value" which was a component of "market value". It was simply a factual consideration, which might or might not affect value. His Honour declined further to consider the issue but agreed that no negligence had been proved on the part of the advisers preparing and presenting Yates' case.
150. Hayne J did not undertake an in-depth analysis of valuation principles. His Honour accepted the principle derived from Pastoral Finance (supra) that market value was (1088):
"... that which a prudent man in their position would have been willing to give for the land sooner than fail to obtain it."
151. In his Honour's view, the relevant factual contentions to support a valuation on that basis had been competently put by Yates' legal advisers.
152. Callinan J undertook a more detailed analysis. He considered that the "head start" hypothesis had not been established. A vendor, desirous of maximising the price, would not hold such an advantage to itself if it could be transferred. If it could not, it would not increase the "market value".
153. His Honour accepted the validity of the approach, adopted by all the valuers who gave evidence before me, that "market value" is based on the assumption that the property in question is put to its "highest and best use". His Honour considered (at 649), that it was valid, in assessing market value, to take account of relevant planning regimes. That would include the activity of potential objectors to proposed developments upon the subject land. The cost of dealing with those objectors would adversely affect market value. Each party is assumed to be aware of the development potential of the subject land, at 650:
"It follows that the more work, the more proving up that is done by the vendor before the sale, the more any uncertainty as to the realisation of the potential will be reduced, and the higher the price will be ... "head start" advantage was no more than an element of the highest and best use of the land and a factor to be taken into account in assessing its value on that basis.That accorded with the approach argued initially and, hence, that approach was not open to a suggestion that it was negligent to take it."
154. His Honour, rightly in my respectful opinion, observed at 651, that valuation practice:
"... cannot be an exact science ... [it requires] the exercise of judgments and the forming of opinions often on matters in respect of which certitude is impossible and uncertainty highly likely."
155. His Honour further observed that there may well be differences engendered by the purpose of the valuation, that is, whether it is being undertaken for revenue purposes or for compensation on compulsory acquisition (citing, with approval, Dixon J in Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia [1947] HCA 10; (1947) 74 CLR 358, 373-4).
156. What seems to me to follow from these observations is that, in interpreting what test should be applied to determine "full market value", the legislative purpose to be served by s 169(1) of the Land Act must be considered.
157. That purpose is, in my view, to protect the owner (that is, the Commonwealth) from receiving a return less than that which would be obtained by a private vendor in a relevantly similar (if not the same) property market. The test, therefore, depends on an opinion being formed as to the price the land in question would fetch in such a market.
158. That opinion is a question of fact.
159. In the present case, the relevant facts concerning the land are reasonably obvious. They have been exposed in the tender documents. In my view, to contend, as did MBA, that the only, and, indeed, the decisive fact relevant to market value of the lease was the price it was prepared to bid, cannot be accepted.
160. Even if the land had been offered without the further conditions as to quality of development and off-site Works, so that the successful developer could proceed as it wished (consistently with use restrictions and general building regulations), it does not follow that the highest price offered is the market value.
161. I take the observations in Boland (supra) to indicate that an offered price may, in fact, include components not relevant to market value as an objective concept.
A developer might have, for one reason or another, a "head start" advantage over other offerers. It may offer a commercially unreal price, whether accidentally or so as to obtain a tactical advantage in another market. There is, I accept, no evidence in the present case of any "head start" advantage CEC had or believed they had to explain their offered price being as high as it was compared with other tenderers.
162. Nevertheless, it does not follow that any price less than that offered by CEC is less than "full market value".
163. What is the "full market value" is a matter of opinion or evaluation. It is true that the assumption is that there is a "market value". However, its identification is not a process free of uncertainty. That it may be within a range of figures is not inconsistent with the process or processes reasonably available to identify "market value". Thus, it cannot be said that an estimate of $6m, even had the GDA adopted it as "market value", was so egregiously erroneous that it would be an error of law to adopt it. Of course, I have no evidence as to what the GDA believed "full market value" was. It clearly believed that the price it considered Landco to have offered, $6,040,000, was not less than full market value.
164. But there is more. The consideration offered for this lease was not merely the price offered in money terms. It was also the value of the off-site Works and an acceptable development concept for the area. That, it seems to me, further complicates the conclusion that the "price" offered by way of cash premium makes the offer accepted by the GDA less than "full market value".
165. It follows that the decision of the GDA to accept the amended offer of Landco did not contravene s 169(1) of the Land Act. I assume, in so deciding, that Mr Eves' valuation of $6,000,000 for the lease itself is an acceptable estimate of full market value for the lease in the context of the other consideration offered pursuant to the tender documents. His estimate varies from that of Mr Armstrong, but I accept that Mr Eves is the better qualified witness and I prefer his opinion insofar as it may differ from that of Mr Armstrong.
Breach of s 29 ACT (Planning and Land Management) Act (PALM Act)
166. There was a contention put forward by MBA that the failure of the GDA to reveal the weightings that were to be given to each of the four selection criteria resulted in a flawed tender process. Mr Ineson asserted that he was taken by surprise by the adoption of the 40:40:10:10 weighting, particularly as he interpreted the briefing he had from Mr Brady and Ms McGrath as an assertion that there would be no weighting but a "holistic" approach.
167. Section 29(2)(a) of the PALM Act limits the power of the Executive, in granting new estates in land, to doing so, "... only in accordance with procedures that are notified to the public".
168. It may be assumed that, disposal by tender being an authorised process, s 29(2)(a) of the PALM Act would require that the procedures by which the tender process was to be conducted would be notified to "the public" and that procedures would be followed.
169. However, it does not follow that the procedures so notified must be strictly applied. So long as the notified procedures are substantially complied with, the merit, or lack of it, in the decision made does not, of itself, render the process invalid. Nor does error made in good faith by those administering the process necessarily nullify it. The failure would need to be so egregious that the process actually undertaken fails substantially to conform to the notified procedures. Further the process adopted in following the notified procedures may be tainted by a failure to accord natural justice or an error of law.
170. The "notified" process was constituted by the call for tenders and included the terms subject to which offers were invited. The Conditions of Tender as notified made it clear that the highest price offered would not necessarily be accepted. There was no promise that any particular priority would be given to the various selection criteria. It was made clear that tenderers were to rely on their own skill and judgment, not only in deciding what consideration to offer, but also as to what design concept they would adopt.
171. I do not consider that the tender process notified by the GDA to dispose of the subject land was in breach of s 29 of the PALM Act. It was clearly a process both publicly notified and reasonably capable of achieving a disposal of land by tender as the legislature has required.
172. It must also be noted that, even if the process adopted had breached s 29, relief is not available under the Territory ADJR Act. The PALM Act is not an "enactment" as defined in the ADJR Act, even if the decision to grant the lease by a call for tenders could be regarded as a decision "under" the PALM Act.
173. However, the MBA contends that various errors in the carrying out of the tender process so taint the process that the decision to grant the lease should be regarded as substantially in breach of the requirements of s 29 and, hence, invalid.
Failure to notify weighting of selection criteria.
174. The conditions of tender did not require that the GDA adopt and apply any particular weighting to the various selection criteria.
175. I consider it was for the GDA to decide whether or not to use any particular evaluation method, provided it was not so irrational as to breach the terms of the PALM Act or the Land Act. To regard the price offered, as of the same importance as the overall design concept, is to my mind, not an irrational approach. Even to have regarded price as of less importance than design excellence, to my mind, would not have been indefensible.
Failure properly to take account of non-compliance of Landco's proposal with the GDA proposal.
176. MBA objected that the Landco proposal, far from being a better response than CEC's to the GDA's objective, was in fact in conflict therewith in the following respects:
* Landco proposed to construct some houses on land not included within the limits of the proposed lease;
* The Landco proposal did not comply with the Energy Guidelines the tender documents required proposals to observe;
* The Landco proposal did not make provision for traffic/intersection controls as required by the tender documents;
* The Landco proposal was for the erection of more than the 340 residences limited by the tender documents;
* The Landco proposal failed to preserve trees in Precinct B as required by the tender documents.
177. Ms McGrath acknowledged that the Landco proposal might well contain the defects noted above. However, she pointed out that when, as lessee, Landco came to submit its development plans for approval, adjustment could then be made to ensure compliance with those requirements.
178. Indeed, in its application, MBA had itself complained that the GDA had failed to take into account that there was no obligation on a successful tenderer to build the works depicted in the preliminary plans and the indicative site layout (see cl 2(b)).
179. There is, to my mind, considerable force in Ms McGrath's response. If Landco's detailed proposal conflicted in any respect with the GDA's requirements or the Territory Plan, that conflict could be dealt with when approval to carry out the development was sought. It is not apparent to me that Landco's errors (if errors they were) render in any way unlawful the acceptance by the GDA of Landco's tender.
180. The decision to accept Landco's tender despite the need to develop the proposal further to bring it into compliance with all of the GDA's requirements, is not a decision to which no reasonable decision-maker could have come in the circumstances.
Failure to observe the closing date for tenders
181. The essence of the complaint is not as to the extension of the closing date for tenders. That was notified to all tenderers. What is objected to is the acceptance of the revised price offered by Landco after the close of tenders.
182. It seems to me that there is merit in this objection. There is no way in which a price of $5.7m, whether or not inclusive of GST, can equate with a price of $6.08m expressly exclusive of GST. Even to do as the GDA did, namely, to regard all offers as exclusive of any GST payable by the GDA on the leases to be granted, does not cure that. In effect, whilst all tenderers were equally permitted to raise their prices by the (possible) GST liability of the GDA, Landco alone was able to raise its offer by $380,000 plus any GST liability of the GDA. That renders the assessment process lacking in procedural fairness.
183. There is a further consequence. Whilst "full market value" of the lease offered must include for its proper assessment the additional benefits offered by tenderers over and above the cash price for the lease, the valuers retained by the GDA, presumably addressing the cash component necessary to make the response by tenderers "full market value", fixed $6.0m (Mr Eves) and between $5.4m and $6.6m (Mr Armstrong) as constituting "full market value". The latter merely indicated the range within which market value would be found. The former opined that not less than $6.0m was "market value". It therefore follows, if Mr Eves was correct, and I accept that he was, that only the CEC tender and the tender ranked second to it were lawfully open to acceptance following the close of tenders.
Briefing Sessions with tenderers before close of tenders
184. MBA complains that one tenderer was told that rear laneways were preferred when different information was given to Mr Ineson in the briefing sessions he had.
185. The process of confidential briefings of prospective tenderers is a risky one. There is always the chance that one tenderer will get an unfair advantage and gain additional information. On the other hand, there was a need for both the GDA and tenderers to understand the proposal, so that it could be responded to properly. The GDA had the duty to ensure that all tenderers were advised of any information relevant to the preparation of tenders passed on to any particular tenderer during briefing. That was not done, though the possible need for it had been recognised. It seems to me that, as the tenderer who was given the additional information referred to above was not, in any event, preferred to CEC, the breach of duty which the GDA committed in giving that information to that tenderer alone did not affect the result as between the remaining tenderers.
Relief sought
186. I have already concluded that review is not open pursuant to or under the ADJR Act. Yet the GDA, a statutory corporation, has egregiously breached the rights of all conforming tenderers other than Landco to have all tenders adjudged fairly on the responses they made by the closing date. It wrongfully relied upon the price offered in cash by Landco as $6.08m when it was, in truth, only entitled to regard it as $5.7m.
187. The GDA concluded as it was entitled to do that the Landco response was the best design concept. However, whether it would have concluded that it should prefer that proposal even if it was an offer of only $5.7m, cannot be assumed. Nor can it be assumed that such a price would have represented "full market value".
188. Further, it is not clear whether the GDA, before it decided to accept any particular tender, made enquiry as to what was the "full market value" of the offered lease. It was forbidden by s 169(1) Land Act to grant a lease of land without receiving "full market value". Nevertheless, the evidence it has adduced in these proceedings raises, at least, serious doubts as to whether Landco's offer, if it was only $5.7m, was lawfully open to acceptance.
189. The rights of review conferred by ss 5 and 6 of the ADJR Act are additional to and not in substitution for other rights of review, see s 9 ADJR Act.
190. There is a right of review by way of writ of certiorari and declaration of right (see, for example, Crouch v Commonwealth [1948] HCA 41; (1948) 77 CLR 339).
191. Those remedies, like judicial review under the ADJR Act, are discretionary, see, for example, R v Wells; ex p Ansell (1982) 41 ACTR 31. They are public law remedies, though a declaration of right may also be granted by a court of equity in vindication of a private right (see, for example, Forster v Jododex (Australia) Pty Ltd [1972] HCA 61; (1972) 127 CLR 421).
192. Further, it is suggested by Professor Wade (Administrative Law, 7thed, 1994 at 663) that public law remedies will not lie in respect of a statutory authority if the only asserted right is contractual but will be available if a "public element" inheres in the rights asserted.
193. Contractual rights may be protected by the remedies of injunction and declaration. It is not obvious that a public law remedy, otherwise applicable if a "public element" intrudes, will be excluded because contract law might also offer a remedy. However, in the present case the applicant has not sought a declaration by reason of a breach, or anticipated breach, of contract.
194. In Nagle v Feilden [1966] 2 QB 633, Lord Denning MR was prepared to extend public law remedies to decisions of bodies which were neither statutory nor had any contractual relationship with the claimant on the ground that the body in question had monopolistic control over entry to a particular trade or calling. Danckwerts and Salmon LJJ delivered concurring judgments.
195. That, of course, goes beyond the classic formulation of the scope of those remedies declared by Atkin LJ in R v Electricity Commissioners; ex p London Electricity Joint Committee Co (1920) Ltd [1924] 1 KB 171, 205:
"Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority, they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs."
196. In 1924 it was assumed that prerogative writs limited the scope of available public law remedies. The remedies of declaration and injunction were equitable, not common law remedies, and were not so limited (see Dyson v Attorney-General [1911] 1 KB 410; Simmonds v Newport Abercan Black Vein Steam Coal Co Ltd [1921] 1 KB 616; Hanson v Radcliffe Urban District Council [1922] 2 Ch 490; Attorney-General (Vic) v Commonwealth [1945] HCA 30; (1945) 71 CLR 237; Crouch v Commonwealth [1948] HCA 41; (1948) 77 CLR 339).
197. That the power to grant declaratory relief is available in any case in which the legal rights of a party have been infringed was affirmed by the High Court in Forster v Jododex Aust Pty Ltd [1972] HCA 61; (1972) 127 CLR 421.
198. The Court of Appeal in Law v National Greyhound Racing Club Ltd [1983] EWCA Civ 6; [1983] 1 WLR 1302, sought to confine the availability of these remedies to "public law matters" so that domestic tribunals even of the kind referred to in Nagle v Feilden (supra) would fall outside the scope of those remedies. The authority of the Club to make decisions derived from its contract with the claimant not from a statute or Crown charter.
199. To similar effect is R v Lloyd's of London; ex p Briggs & Ors [1993] 1 Lloyd's Rep 176.
200. But those decisions are predicated on the powers of the High Court of Justice being limited to granting declaratory relief only if certiorari was open.
201. The status of a decision-making body as a statutory corporation under ministerial control has, by way of contrast, been held to attract public law remedies.
202. In Mercury Energy Ltd v Electricity Corporation of New Zealand [1994] 1 WLR 521, the Privy Council stated, at 526:
"A state 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 defendant carries on its business in the interests of the public. Decisions made in the public interest by the defendant, 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 defendant are amenable in principle to judicial review both under the Act of 1972 as amended and under the common law." (Emphasis added.)
203. Such relief will be granted only if it is demonstrated that the decision was not reached in accordance with law.
204. It is no answer to a claim for public law remedies that the operation of the ADJR Act has been excluded. That point was emphasised by the Court of Appeal (Vic) in State of Victoria v Master Builders' Association of Victoria [1995] 2 VR 121. In the latter case, a non-statutory-government appointed "task force" was given the power to decide what building contractors it would advise government to refuse to deal with. Relief against this "black list" was sought by way of common law judicial review.
205. Tadgell J, Ormiston and Eames JJ concurring, concluded that it should be declared that building contractors who might be named in the list were entitled to procedural fairness and to protect that entitlement by the grant of appropriate public law remedies.
206. Such relief was held to be open because the task force was performing a public duty. The decision to name a contractor endangered that contractor's interests. In so deciding, Tadgell J rejected an argument that the Government was merely exercising executive power to act commercially by deciding with whom it would enter into contracts. The dichotomy adopted in England between public law functions and mere executive power was noted. At 137, his Honour observed that the process of reviewing the suitability of proposed contractors:
"... may on one view be classified as part of a process by which the Victorian government will decide with whom and on what conditions it will contract in the future. No-one would doubt the government's right to make such a decision for its own internal purposes, and it is hard to see that the decision so characterised would be judicially reviewable ... [however] ... The compilation of the black list is not to be seen merely as an incident of government decision-making for the regulation of future building and construction projects."
207. The real question is not whether the conduct impugned was that of a body acting pursuant to statute.
208. As Ormiston J put it, at 149:
"I would not see it inconsistent with principle to allow judicial review of the exercise of prerogative and other non-statutory powers of the Crown. ...Moreover, 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 in the exercise of those powers or rights."
209. The amenability of the impugned decision to review for illegality, unreasonableness or lack of procedural fairness was considered at length by Eames J. His Honour expressly approved of the observations made upon that issue in Minister for Arts, Heritage and Environment v Peko-Wallsend Ltd (1987) 15 FCR 274, per Bowen CJ, Sheppard and Wilcox JJ.
210. That led to the conclusion, in his Honour's view, that judicial review was available. At 160-161, Eames J said:
"... subject to consideration of the requirements that they be taken in the exercise of a public duty, and that they affect rights, interests or legitimate expectations, the decisions of the task force are amenable to review whether or not they derive from the common law or from the prerogative, rather than from statute."
211. Eames J was prepared to assume, at 162, that if the decision in question would "affect public law, rather than private law", then it is made in the exercise of a "public duty" and, so, amenable to public law remedies.
212. How such an element might be discerned, in his Honour's view, at 163, involves,
"... 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. Such an analysis was conducted by the Court of Appeal in Datafin (R v Panel on Take-overs and Mergers ex p Datafin PL [1987] QB 815), and led to the conclusion that whilst the panel on take-overs was ostensibly a merely private self-regulating body it operated in the public domain, was performing functions which might as easily, and as appropriately, have been the subject of legislation, and concerned institutions and activities which affected the public. Power exercised behind the scenes, by government, ... which would undoubtedly be the exercise of power under a public duty, is no less the exercise of power with a public law basis merely because an apparently independent, self-regulating, body is at the forefront in making the decisions."
213. In the instant case, therefore, his Honour concluded, at 163-4:
"... there is a clear public law basis, either in the nature of the power, or in the consequences of its exercise, as would, in the present case, meet the requirement of there being a public law factor ... 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."
214. 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".
215. 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."
216. 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".
217. 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.
218. 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".
219. So much was recognised by the Privy Council in Williams Construction Ltd v Blackman [1995] 1 WLR 102. In that case, the government of Barbados had statutory power conferred on it to make contracts (inter alia) for roadworks. The Cabinet, on behalf of the government, rejected the lowest tenderer. It was held that the decision to do so was amenable to judicial review at common law. So also is the GDA in the present circumstances.
220. It follows that the GDA was obliged to accord tenderers procedural fairness, to act according to law and not unreasonably. The obligation to accord procedural fairness to tenderers also arises by virtue of an implied agreement by the GDA to the same effect pursuant to the Conditions of Tender. It implicitly agrees with all tenderers to do so. However, that agreement does not exclude the public law obligations imposed on the GDA by its status and function. The "public elements" referred to, inter alia, in R v Panel on Take-overs and Mergers; ex p Datafin PL [1987] QB 815 and in State of Victoria v MBA (Vic) (supra) are sufficient to attract public law remedies as well as, possibly, private law remedies.
221. It was a breach of both the entitlement of other tenderers to procedural fairness and, at least arguably, a breach of s 169 Land Act, for the GDA to have accepted the amended Landco proposal. The breach of the duty to afford procedural fairness, however, is sufficient to enlighten the power of this Court to grant public law remedies.
Discretion to refuse relief
222. Counsel for the GDA urged upon the court the submission that, even if the tender process had been both flawed and amenable to review, relief should be declined on discretionary grounds.
223. In R v Wells (supra) Connor J declined relief though the decision in question was tainted by procedural unfairness. That was on the basis that delay on the part of the claimant had resulted in other persons being promoted to the position which had been unfairly denied to the claimant.
224. In the present case, whilst MBA has acted with promptness, it is objected that the rights of Landco to the fruits of the offer it has accepted ought not to be interfered with. Further, that having made an offer and had it accepted, the GDA ought not to be subjected to the risk of legal liability to Landco in respect of what seems, on its face, to be a concluded contract.
225. CEC, if that argument be accepted, would be left to pursue only such contractual remedy as it might have against the GDA (see, for example, Hughes Aircraft Systems International v Airservices Australia (1997) 146 ALR 1).
226. Finally, it was suggested, even if the tender process was to be set aside, it would be futile for the GDA to re-evaluate tenders as at the date of closure because it had already determined that CEC's tender was less preferable than, not merely Landco's tender, but also the tender which had offered $6,050,000 (name withheld). That latter tender was not tainted by the unfairness attending consideration of Landco's amended tender, nor was there any basis to doubt that it would remain preferable, in the GDA's opinion, to that of CEC.
227. Further, I suppose, it might have been open to GDA to determine that Landco's tender did conform to s 169(1) Land Act even though it was for $5.7m rather than $6.08m, and, even at that reduced price, was preferable to the other two tenders.
228. Those considerations have considerable force. However, that force is diminished somewhat by two considerations.
229. The first is that, instead of announcing the preferred tenderer and then entering into an agreement, the GDA announced the successful tenderer only after an acceptance of offer was received.
230. Mr Brady, under cross-examination, conceded that that procedure was adopted for the express purpose of avoiding or obstructing any challenge by CEC to the result of the tender process.
231. It seems to me that it ought not to be open to the GDA to rely on its own efforts to protect itself from judicial review as a reason for refusing that review. If the GDA suffers loss because of the invalidity of the process it followed, it may be fairly said that it has brought that consequence upon itself.
232. But there are the rights of Landco to consider. It may have incurred expenditure in reliance on the validity of the GDA's acceptance of its offer. Its economic interests are certainly adversely affected compared with its present position as preferred tenderer.
233. That is a valid consideration. However, it cannot be overlooked that it was Landco's own wrongful act, in raising its offer after closure of tenders, that has resulted in the finding that the tender process was tainted by procedural unfairness. It received an unfair and unlawful advantage in consequence. In making that observation it is not to be concluded that Landco deliberately attempted to deceive the GDA into permitting it to raise its offer under cover of addressing the GST issue. It may have required a high degree of innumeracy for Landco's responsible officers to have proposed and accepted the so-called GST revision in good faith. Nevertheless, it appears that the GDA notwithstanding its considerable array of administrative officers and "Probity Auditor" failed to notice the true effect of the price revision before accepting it. It is possible that Landco was equally unaware of the consequence of its action. Thus I do not conclude that Landco's officers realised that they were attempting to corrupt the tender process by offering the higher price they did after tenders had closed. However, that was the effect of Landco's conduct.
234. Those considerations persuade me that the decision of the GDA to obtain a written acceptance from Landco before announcing the preferred tenderer should not preclude the grant of relief. It is contrary to the public interest that the tendering process should be susceptible to corrupt behaviour, even if in this case, it is not shown to have been intended to achieve that effect.
235. The futility argument has more force. However, to accept it requires an assumption that Landco's tender would remain the preferred tender despite its lower price and that the second ranked tenderer would be prepared now to accept an offer to carry out the development even after this delay. It also assumes no change in the personnel involved in the process of evaluation if the tenders are re-assessed.
236. Of course, the GDA might decide not to offer to accept any tenderer's proposal and to recommence the tender process. But whatever may be thought of CEC's prospects, it cannot be said that it would be futile for the GDA to consider the tenders absent the unfair advantage it had given to the Landco tender.
237. I would, therefore, declare,
1. That the decision made by the GDA to offer to grant Landco a lease of Block 2 Section 1 Gungahlin is invalid and is set aside ab initio.
2. That the GDA acted unlawfully in considering the tender of Landco as if the price offered by it for the lease was $6,080,000 (exclusive of any GST) rather than $5,700,000 (whether inclusive or exclusive of any GST).
238. I will hear the parties as to costs and any other consequential orders or directions that may be required.
I certify that the preceding two hundred and thirty-eight (238) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Higgins.
Associate:
Date: 18 October 2000
Counsel for the Applicant: Mr B Salmon QC with Mr P Walker
Solicitor for the Applicant: J S O'Connor Harris & Co
Counsel for the Respondents: Mr P Donoghue QC with Mr R Bayliss
Solicitor for the Respondents: ACT Government Solicitor's Office
Dates of hearing: 24, 25 May 2000, 8 June 2000
Date of judgment: 18 October 2000
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/act/ACTSC/2000/89.html