Acquista Investments Pty Ltd v The Urban Renewal Authority - [2014] SASC 206

Supreme Court of South Australia
(Civil)
ACQUISTA INVESTMENTS PTY LTD & ANOR v THE URBAN RENEWAL AUTHORITY & ORS
[2014] SASC 206
Judgment of The Honourable Justice Blue
24 December 2014
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GENERALLY
ADMINISTRATIVE LAW - JUDICIAL REVIEW - REVIEWABLE DECISIONS AND CONDUCT
ADMINISTRATIVE LAW - JUDICIAL REVIEW - STANDING TO INSTITUTE PROCEEDINGS
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - DELEGATION OF POWER
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - UNREASONABLENESS
ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - IRRELEVANT CONSIDERATIONS
The plaintiffs seek judicial review of a decision by the first defendant, the Urban Renewal Authority, to enter into a contract with the third defendant, Adelaide Capital Partners, granting options to purchase part or all of 407 hectares of land at Gillman, South Australia.
The contract was between the Authority, Adelaide Capital Partners and the Minister for State Development. It was executed by the Authority’s Chief Executive on its behalf.
The Board of the Authority had formally delegated the function of granting contract pre-authorisation in respect of certain contracts to Cabinet when the consideration was $11 million or over. At the same time, it had formally delegated the function of executing a contract concerning the disposal of land when the consideration was over $4.4 million to the Chief Executive (with approval of the Minister for Housing and Urban Development).
The plaintiffs contend that the first delegation had no application to the contract and in any event Cabinet’s function would only have been to give approval in principle, leaving the substantive decision to be made by the Authority. They contend that, on its proper construction, the second delegation delegated power to make the substantive decision whether to enter into such a contract to the Chief Executive, provided that he first obtained approval in principle from the Minister before executing the contract. The defendants contend that power to make the substantive decision to enter into the contract was delegated to Cabinet under the first delegation or alternatively by a specific ad hoc authority conferred by a board resolution on 29 November 2013. In the alternative, they contend that power to make the substantive decision to enter into the contract was delegated by the second delegation to the Minister for Housing and Urban Development and the role of the Chief Executive was largely ministerial. The third defendant contends in the alternative that the Chief Executive had actual authority, implied or under power of attorney, or ostensible authority and in any event his execution of the contract was ratified by the Authority’s defence of this action.
The plaintiffs contend that, if the Chief Executive had authority to execute the contract, the decision to enter into the contract and the contract itself are void because the decision was made contrary to a requirement imposed by section 11 of the Public Corporations Act 1993 (SA) that the Authority perform its commercial operations in accordance with prudent commercial principles, the decision was made without regard to a relevant factor, namely those principles, and the decision was unreasonable in the Wednesbury sense. The defendants take issue with these contentions.
The defendants contend that the plaintiffs do not have standing to bring judicial review proceedings and in any event the decision to enter into a contract is not amenable to review. They also contend that, if the decision was subject of any of the three infirmities alleged by the plaintiffs, the contract was nevertheless valid and the Court has no power in the circumstances to restrain the parties from performing it.
Held by Blue J:
1.      The plaintiffs have standing to bring the judicial review proceedings (at [240]-[244]).
2.      The decision to enter into the contract is amenable to judicial review (at [273],[282]-[287]).
3.      The first delegation to Cabinet did not apply to the decision to enter into the contract (at [329], [351).
4.      The Chief Executive did not have authority actual or ostensible, apart from the second delegation, to enter into or execute the contract and the Authority did not ratify the Chief Executive’s decision to enter into the contract (at [399]-[400], [450]-[451], [457]).
5.      On its proper construction, the second delegation delegated power to make the substantive decision to the Chief Executive, subject to obtaining the approval in principle of the Minister (at [394]).
6.      The Chief Executive made the substantive decision to enter into the contract and obtained the approval in principle of the Minister (at [417]-[428]).
7.      The decision by the Chief Executive to enter into the contract was a decision that no reasonable person in the position of the Chief Executive could have made (at [550]-[564]).
8. The decision by the Chief Executive to enter into the contract was made without regard to a relevant factor, namely prudent commercial principles consistent with the Authority’s functions (at [578) and was made in contravention of section 11 of the Public Corporations Act (at [578]).
9.      Notwithstanding the infirmities of the decision making, the contract is valid and there is no basis on which to restrain the parties from performing it (at [611]-[627]).
Administrative Decisions (Judicial Review) Act 1977 (Cth); Environment Protection Act 1993 (SA); Environment Protection Regulations 2009 (SA); Housing and Urban Development (Administrative Arrangements) Act 1995 (SA) s 5(b); Migration Act 1958 (Cth); Public Corporations Act 1993 (SA) s 11; Public Corporations (Land Management Corporation) (Dissolution and Revocation) Regulations 2012 (SA); Public Corporations (Land Management Corporation) Regulations 1997 (SA) , referred to.
Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223; Cooney v The Council for the Municipality of Ku-ring-gai (1963) 114 CLR 582; Fry v Smellie [1912] 3 KB 282; Harrisons & Crossfield Ltd v London & North-Western Railway Co [1917] 2 KB 755; In Re Portuguese Consolidated Copper Mines Ltd (1890) LR 45 Ch D 16; Jones v Peters [1948] VLR 331; Lifesavers (Australasia) Ltd v Frigmobile Pty Ltd [1983] 1 NSWLR 431; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; Minister for Immigration and Citizenship v Li [2013] HCA 18, (2013) 249 CLR 332; Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35, (2004) 218 CLR 451; Petersen v Moloney (1951) 84 CLR 91; Paterson v McCallum [1921] NZLR 869; Presentaciones Musicales SA v Secunda [1995] EMLR 118, [1994] Ch 271; Re Reference under s 11 Ombudsman Act 1976; Ex parte Director-General of Social Services (1979) 2 ALD 86; Savery v King (1856) 5 HL Cas 627; 10 ER 1046; Scott v Bagshaw [1999] FCA 674, (1999) 92 FCR 424; Secretary, Department of Social Security v Alvaro (1994) 50 FCR 213; Sharp v Wakefield [1891] AC 173; Taylor v Smith (1926) 38 CLR 48; Tesco Supermarkets Ltd v Nattrass [1972] AC 153; The Baumwoll Manufactur Von Carl Scheibler v Furness [1893] AC 8; The Phoenix Assurance Co Ltd v Berechree (1906) 3 CLR 946; The State of New South Wales v Bardolph (1934) 52 CLR 455; Tipperary Developments Pty Ltd v Western Australia [2009] WASCA 126, (2009) 38 WAR 488; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd & Ors [2004] HCA 52, (2004) 219 CLR 165; Victorian Professional Group Management Pty Ltd v The Proprietors “Surfers Aquarius” Building Units Plan No 3881 [1991] 1 Qd R 487; Wilson v Tumman and Fretson (1843) 6 M&G 235, applied.
Bateman's Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd [1998] HCA 49, (1998) 194 CLR 247; Broadbent v Medical Board of Queensland [2011] FCA 980, (2011) 195 FCR 438; Commissioner of Taxation of the Commonwealth of Australia v Futuris Corp Ltd [2008] HCA 32, (2008) 237 CLR 146; Holmes v Commissioner of Police [2011] NTSC 108, (2011) 30 NTLR 195; No 2 Pitt Street Pty Ltd v Wodonga Rural City Council [1999] 3 VR 439; Sydney Municipal Council v Hermann (1948) 49 SR (NSW) 46; R (on the application of Lemon Land Ltd) v The Mayor and Burgesses of the London Borough of Hackney [2001] EWHC Admin 336; R (on the application of Ise Lodge Amenity Committee) v Kettering Borough Council [2002] EWHC Admin 1132, [2002] All ER (D) 525; R (on the application of Structadene Ltd) v Hackney London Borough Council [2000] EWHC Admin 405; [2001] 2 All ER 225, distinguished.
Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth of Australia (1977) 139 CLR 54; Armagas Ltd v Mundogas SA [1986] 1 AC 717; Australian Broadcasting Corporation v Redmore Pty Ltd (1989) 166 CLR 454; Bolton Partners v Lambert (1889) LR 41 Ch D 295; Davison v Vickery’s Motors Ltd (in liq) (1925) 37 CLR 1; Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149; Khuu & Lee Pty Ltd v Corporation of the City of Adelaide [2011] SASCFC 70; (2011) 110 SASR 235; MBA Land Holdings Pty Ltd v Gungahlin Development Authority [2000] ACTSC 89; (2000) 206 FLR 120; Mercury Energy Ltd v Electricity Corporation of New Zealand Ltd [1994] 2 NZLR 385; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, (1998) 194 CLR 355; R v Anderson; Ex parte IPEC-Air Pty Ltd (1965) 113 CLR 177; The Royal British Bank v Turquand (1856) 6 EL & BL 327, 119 ER 886; The State of Victoria v The Master Builders Association of Victoria [1995] 2 VR 112; White v Tomasel [2004] QCA 89, [2004] 2 Qd R 438; Xenophon v State of South Australia [2000] SASC 327; (2000) 78 SASR 251, discussed.
Barton v Commonwealth of Australia (1974) 131 CLR 447; Council of Civil Service Unions v Minister for The Civil Service [1985] 1 AC 374; Foster v Minister for Customs and Justice [2000] HCA 38, (2000) 200 CLR 442; Ling v Commonwealth of Australia (1994) 51 FCR 88; Montreal Street Railway Co v Normandin [1917] AC 170; Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476; Simpson v Attorney-General (NZ) [1955] NZLR 271; Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492; Edwards v Santos Ltd [2011] HCA 8, (2011) 242 CLR 421; Shop Distributive and Allied Employees Association v Minister for Industrial Affairs of the State of South Australia (1995) 183 CLR 552; The State of Victoria v The Master Builders Association of Victoria [1995] 2 VR 121; Wentworth v Woollahra Municipal Council (1982) 149 CLR 672, considered.

ACQUISTA INVESTMENTS PTY LTD & ANOR v THE URBAN RENEWAL AUTHORITY & ORS
[2014] SASC 206
Judicial Review:
BLUE J:
Table of Contents
PART A: THE LEGISLATIVE REGIME
The Public Corporations Act
The Housing and Urban Development (Administrative Arrangements) Act and Regulations
PART B: BACKGROUND
Parties
The plaintiffs
The Authority
The State
Adelaide Capital Partners
Waste and soil management industries
Waste management industry
Soil management industry
IWS business
The Land
Description of the Land
History of the Land
Expressions of interest by soil management operators
Approach by IWS
Approach by ARR
Approach by ACP
ACP’s August proposal
The proposal
The September Cabinet submission
The Draft Contract
Board consideration
The first Board Paper
The second Board Paper
Approaches by IWS and E & A Ltd
Board consideration
The third Board Paper
The fourth Board Paper
The December Cabinet submission
The Contract
PART C: THE TRIAL
Documentary evidence
Witnesses
Mr Borrelli’s evidence generally
IWS’ interest in the Land
Discussion on 6 March 2013
Cross-examination on interest in subsequent land
Finding on IWS’ interest in the Land
Other evidence by Mr Borrelli
Other evidence by Mr Rollison
Evidence by Mr Smith and Mr Brumby
Pleading amendments and issues concerning parties’ cases at trial
The Minister decision case
The Chief Executive decision case
The Board revocation case
PART D: STANDING OF THE PLAINTIFFS
PART E: AMENABILITY TO REVIEW
Source of power
Statutory v prerogative or common law power
Rights and interests
Conclusion
Nature and subject matter of decision
The nature of the Contract Decision
The MSD Decision
The Advice Decision
PART F: AUTHORITY TO ENTER INTO CONTRACT
Who had authority?
Delegation to Cabinet on 26 August 2013
Contracts for sale of land
Pre-authorisation
Consideration $10 million or over

Delegation to Cabinet 29 November 2013
Delegation to the Minister 26 August 2013
Prior approval of actual decision
Consideration $14 million or over

Implied authority of the Chief Executive
Authority of the Chief Executive under Power of Attorney
Delegation to the Chief Executive 26 August 2013
Revocation of power of Chief Executive
Who made the decision?
The Chief Executive
Existence and terms of decision
Acting under dictation
Existence of Minister’s decision
Grant of approval by Minister
Conclusion

Cabinet
Terms of decision

Minister for Urban Development
Ratification
Ostensible authority
Minister for State Development
PART G: NON-COMPLIANCE WITH SECTION 11
Do contraventions render acts void?
General approach to statutory construction
Structure of section 11
Does contravention of section 11 render an act void?
Do contraventions render acts unlawful?
Consequences of unlawfulness for contracts
Did the Authority breach section 11?
PART H: WEDNESBURY UNREASONABLENESS
Meaning of “unreasonableness” in the Wednesbury sense
Source of obligation not to act “unreasonably” in the Wednesbury sense
Statutory implication that Authority not act “unreasonably”
Scope of relevant material
Assessment of Wednesbury unreasonableness
Sale of land
Competitive marketing and sales processes
Third party interest in the land
Valuation
Overall assessment of sale
Return from development by the Authority
Advice from commercial property agent

Option as opposed to sale
Inherent difference between option and sale
Attitude of the Board
Relevant comparison of value

Overall assessment of decision
Other information before the Chief Executive
Competitive marketing and sales processes
Third party interest in the land
Value
Conclusion

PART I: FAILURE TO TAKE INTO ACCOUNT RELEVANT FACTOR
A mandatory factor
Regard to prudent commercial principles
Breach of section 11
Irrelevant considerations
PART J: CONSEQUENCES OF VITIATION OF DECISION
Decision made without authority
Private law principles
Statutory construction
Decision made in breach of section 11
Decision made unreasonably in the Wednesbury sense
Decision without regard to mandatory relevant factor
PART K: THE MINISTER FOR STATE DEVELOPMENT
Effect of Minister being party to contract
Power of Premier to contract to sell the Land
PART L: CONCLUSION

This is an action for judicial review.
In December 2013, a decision was made purportedly on behalf of the first defendant, the Urban Renewal Authority (the Authority), to enter into a contract with the third defendant, Adelaide Capital Partners Pty Ltd (ACP). The contract was for the grant by the Authority to ACP of three succesive options (the Options) to purchase portions of 407 hectares of land owned by the Authority at Gillman, South Australia (the Land).
On 11 December 2013, the Chief Executive of the Authority executed purportedly on behalf of the Authority a deed entitled the Lipson Industrial Estate Option Deed (the Contract). The Contract was executed by the Minister for State Development on 11 or 12 December and by ACP on 13 December 2013. It was dated 13 December 2013. It provided for the grant of the Options on terms and conditions and for the sale and purchase of the relevant portions of the Land on terms and conditions on the exercise by ACP of an Option.
The plaintiffs contend that the person or persons who made the substantive decision to enter into the Contract (the Contract Decision) purportedly on behalf of the Authority did not have power or authority to do so, the Chief Executive did not have authority to execute the Contract and the Contract is void.
The plaintiffs’ primary contention is that the substantive decision to enter into the Contract was made by Cabinet but the board of the Authority had not delegated to Cabinet power to make any relevant decision or at least the substantive decision to enter into the Contract. Alternatively, if the substantive decision to enter into the Contract was made by the Minister for Housing and Urban Development (the Minister for Urban Development) (which the plaintiffs deny), the board had not delegated to the Minister for Urban Development power to make that decision as opposed to granting approval in principle as a pre-condition to the Chief Executive making that decision. Alternatively, if the substantive decision to enter into the Contract was made by the Chief Executive (which the plaintiffs deny), he had not obtained the approval in principle of the Minister for Urban Development and therefore did not have power to enter into the Contract.
The plaintiffs contend in the alternative that the substantive decision to enter into the Contract was made not in accordance with prudent commercial principles in breach of section 11 of the Public Corporations Act 1993 (SA) (the Public Corporations Act) or was made without taking into account a mandatory relevant factor, namely prudent commercial principles, or was so unreasonable that no reasonable person could have made it. Therefore the Contract Decision and the Contract are void or alternatively the Contract Decision and entry into the Contract by the Authority were unlawful and the parties should be restrained from performing the Contract.
The plaintiffs also seek judicial review on the same three alternative grounds of the decision by the board of the Authority on 29 November 2013 to provide advice to the Minister for Urban Development (the Advice Decision) and of the decision by the Minister for State Development on 11 or 12 December 2013 to enter into the Contract (the MSD Decision).
The defendants contend in limine that the plaintiffs lack standing and in any event none of the decisions are amenable to review.
The defendants’ primary contention is that the substantive decision to enter into the Contract was made by Cabinet and the board had delegated to Cabinet power to make that decision. Alternatively, that decision was made by the Minister for Urban Development and the board had delegated to the Minister power to make that decision. Alternatively, the third defendant contends that the Contract Decision was made by the Chief Executive who had power to do so under delegation or general law implied or ostensible authority or his decision was ratified by the Authority by its defence of this action.
The defendants deny that the plaintiffs have established any of the three grounds of review on the merits. They contend that in any event the Contract is not liable to be declared void and the parties are not liable to be restrained from performing it and relief should in any event be refused in the discretion of the Court.
The action raises the following principal issues:
1.Do the plaintiffs have standing to seek judicial review?
2.Are the decisions amenable to judicial review?
3.Was the Contract Decision made:
(a)by Cabinet, or
(b)by the Minister for Urban Development, or
(c)by the Chief Executive with the approval of the Minister for Urban Development,
pursuant to delegation by the board of the Authority or otherwise so as to have been made within power or authority conferred by the Authority?
4.Does section 11 of the Public Corporations Act:
(a)render void a decision by a public corporation in the performance of its commercial operations not in accordance with prudent commercial principles and/or not using its best endeavours to achieve a level of profit consistent with its functions?
(b)alternatively render unlawful such a decision and if so does an injunction lie to restrain the parties from performing a contract made in implementation of the decision?
5.If issue 4 is answered in the affirmative, was the Contract Decision[1] made in breach of section 11 of the Public Corporations Act?
6.Was the Contract Decision[2] a decision no reasonable person in the decision-maker’s position could have made?
7.Did the decision-maker in making the Contract Decision[3] fail to take into account a mandatory relevant consideration?
8.If issue 3 is answered in the negative or issues 4, 5, 6 or 7 are answered in the affirmative, is the Contract void as between the Authority and ACP?
9.If issue 8 is answered in the affirmative, is the position different because the Minister for State Development is a party?
10.Should any discretion be exercised in favour of declaring the Contract Decision and the Contract void or restraining the defendants from implementing the Contract Decision or performing the Contract?
PART A: THE LEGISLATIVE REGIME
[1]    The same issue arises for the Advice Decision but it is a subsidiary issue.
[2]    The same issue arises for the Advice Decision and the MSD Decision but it is a subsidiary issue.
[3]    The same issue arises for the Advice Decision and the MSD Decision but it is a subsidiary issue.
The Public Corporations Act

The Public Corporations Act[4] was enacted in 1993 in the wake of the collapse of the State Bank. A provision of the Public Corporations Act applies to those statutory corporations (public corporations) to which it is declared to apply by the corporations’ incorporating Acts or by regulation.[5]
[4] The relevant date for all legislation in this case is December 2013. For ease of reference, I use the present tense to describe all legislative provisions (including regulations) as they were at December 2013.
[5] Public Corporations Act 1993 (SA) s 5(1).
Part 2 of the Public Corporations Act is entitled “Ministerial control”. Sections 8, 9 and 10 address the entitlement of the responsible Minister or the Treasurer to attend, and have access to board papers for, board meetings of a public corporation and disclosure of matters to those Ministers.[6]
[6] Sections 6 and 7 address control of and direction to a public corporation by provision of information and records to its Minister. They do not apply to the Authority.
Part 3 of the Public Corporations Act is entitled “Performance and scope of corporation’s operations” and comprises sections 11 to 13. Section 11 addresses the manner in which a public corporation is required to perform its commercial and non-commercial operations. Section 11 provides:
11—General performance principles
(1)A public corporation must perform its commercial operations in accordance with prudent commercial principles and use its best endeavours to achieve a level of profit consistent with its functions.
(2)A public corporation must perform its non-commercial operations (if any) in an efficient and effective manner consistent with the requirements of its charter.
(3)Where a public corporation's charter identifies any operations of the corporation as non-commercial operations, the operations are to be regarded as such for the purposes of this section.
Sections 12 and 13 require the responsible Minister and the Treasurer, after consultation with the public corporation, to prepare and review annually a charter dealing, inter alia, with the nature and scope of the commercial operations and any non-commercial operations to be undertaken and a performance statement setting performance targets the corporation is to pursue in the coming financial year or other period.
Part 4 is entitled “Duties and liabilities of board and directors”. It comprises sections 14 to 22.
The Housing and Urban Development (Administrative Arrangements) Act and Regulations
The Housing and Urban Development (Administrative Arrangements) Act 1995 (SA)[7] (the Act) was enacted in 1995 to provide for various matters relating to the public administration of housing and urban development within the State; to provide for the creation of certain bodies to facilitate development within the State; and for other purposes.
[7] With effect on 18 September 2014, the name of the Act was changed to the Urban Renewal Act 1995. With effect on 18 September and 24 October 2014, very substantial amendments to the Act came into force. This action was conducted by all parties on the basis that the relevant provisions of the Act are those in force as at December 2013. I proceed on that basis and refer in this judgment to the Act under its former name and with its former content. I use the present tense to describe its former provisions and effect.
Part 3 of the Act is entitled “Statutory Corporations”. Section 8 empowers the Governor to make regulations establishing a statutory corporation under the Act, providing for the constitution of a board of management as its governing body and specifying its functions. Section 8(3) provides that, subject to a limitation imposed by or under an Act, a statutory corporation has all the powers of a natural person together with the powers specifically conferred on it by or under the Act or other Acts. Regulations might also limit its powers and make other provisions necessary or expedient for its purposes. Sections 10 to 15 address appointment by the Governor of board members and proceedings at board meetings.
Section 19 gives a power of delegation to a board of a statutory corporation. Section 19 provides:
19—Delegations
(1)A board may delegate a function or power conferred on or vested in the board (or its statutory corporation) under this Act—
(a)     to a specified person or body; or
(b)     to a person occupying a specified office or position.
(2)     A delegation—
(a)     may be made subject to conditions and limitations specified in the instrument of delegation; and
(b)     if the instrument of delegation so provides, may be further delegated by the delegate; and
(c)     is revocable at will and does not prevent the board from acting itself in a matter.
Section 21 defines the powers that might be exercised by a statutory corporation. Section 21(1) relevantly provides:
21—Specific powers
(1)Without limiting another provision of this Act, but subject to a limitation or condition imposed by the Minister in relation to the statutory corporation, a statutory corporation may—
(a)     sue and be sued;
(b)     acquire, hold, deal with and dispose of real and personal property (or an interest in real or personal property), and grant or hold a lease or licence; …
(f)     enter into any kind of contract or arrangement;
(g)     exercise other powers conferred by regulation;
(h)     exercise other powers that are necessary, expedient or incidental to the functions of the statutory corporation.
Part 2 of the Act is entitled “The Minister”. Section 4 gives to the Minister similar powers to those conferred by section 21 upon a statutory corporation established under the Act. Section 5 addresses the functions of the Minister. Those functions include initiating, undertaking, supporting and promoting the development of land in the public interest and encouraging and facilitating public and private sector investment and participation in the development of the State.[8]
[8] Housing and Urban Development (Administrative Arrangements) Act 1995 (SA) s 5(b).
Section 9 provides that a statutory corporation is subject to the control and direction of the Minister. Section 22 provides that a statutory corporation holds its property on behalf of the Crown.
The Housing and Urban Development (Administrative Arrangements) (Urban Renewal Authority) Regulations 2012 (SA) (the Regulations) came into operation on 1 March 2012.[9]
[9] With effect on 18 September 2014, the Regulations were revoked and replaced by the Urban Renewal Regulations 2014 (SA). This action was conducted by all parties on the basis that the relevant provisions of the Regulations are those in force as at December 2013. I proceed on that basis and refer in this judgment to the Regulations as at December 2013. I use the present tense to describe their former provisions and effect.
Regulation 4 establishes the Authority as a statutory corporation under the Act. Regulation 5 creates a board of management constituted of seven persons. Regulations 6 and 7 address the Authority’s functions and additional powers respectively.
Regulation 6(1) relevantly provides:
6—Functions of URA
(1)     The functions of URA are as follows:
(a)     to initiate, undertake, support and promote the development of land and housing in the public interest, particularly for urban renewal purposes, including by—
(i)acquiring, assembling and using land and other assets in strategic locations, including in areas identified for urban renewal; and
(ii)promoting public support for urban renewal by working with the South Australian Housing Trust (SAHT), community groups and other bodies in the development of land and housing; and
(iii)undertaking preliminary works (including remediation of land) to prepare land for development and other functions such as planning and co‑ordination for the purposes of such development;
(b)     to encourage, facilitate and support public and private sector investment and participation in the development of the State, including by performing its functions to facilitate development that is attractive to potential investors;
(c)    to acquire, hold, manage, lease and dispose of land, improvements and property, including land and housing formerly held under the South Australian Housing Trust Act 1995 transferred to the URA, particularly with a view to—
(i)reducing social disadvantage within the community through urban renewal, including the renewal of public housing by promoting, facilitating or undertaking—
(A)the creation of a mixture of public and private housing in particular locations; and
(B)an increase in the supply of affordable housing and community housing; and
(ii)managing projects involving the development of land and housing, including for urban renewal purposes (on its own behalf or on behalf of other agencies or instrumentalities of the Crown); and
(iii)managing the orderly development of areas through the management and release of land, including areas of undeveloped or under developed land, as appropriate; and
(iv)holding land and other property to be made available, as appropriate, for commercial, industrial, residential or other purposes;
…
(e)     to give advice to the Government on issues related to housing and urban development in the State;
…
(l)    to carry out its functions to support development that promotes growth in employment and the economy;
Regulation 8 provides that sections 8 to 13 inclusive of the Public Corporations Act apply to the Authority. Because section 5 of the Public Corporations Act effectively leaves it to the Act and Regulations to apply specified provisions of the Public Corporations Act to statutory corporations established under the Act, the Act and the Public Corporations Act should be read in pari materia.
The Authority is the successor to the Land Management Corporation. The Land Management Corporation was established on 24 December 1997 as a statutory corporation.[10] On 1 March 2012, the Land Management Corporation was dissolved and its assets and liabilities transferred to the Authority.[11] Those assets included the Land.
[10] Public Corporations (Land Management Corporation) Regulations 1997 (SA).
[11] Public Corporations (Land Management Corporation) (Dissolution and Revocation) Regulations 2012 (SA).
PART B: BACKGROUND
The following matters up to and as at December 2013 are common ground on the pleadings or proved by the evidence.[12]
Parties
[12] The relevant date for almost all purposes in this case is December 2013. For ease of reference, I use the present tense to describe matters as at December 2013 (despite the passage of 12 months and changes that may have occurred since then) and the past tense to describe events or matters before December 2013.
The plaintiffs
The first plaintiff, Acquista Investments Pty Ltd (Acquista), is owned and controlled by the Borrelli family, which has been involved in the waste management industry in South Australia since 1962.
The second plaintiff, Veolia Environmental Services (Aust) Pty Ltd (Veolia), is a subsidiary of Veolia Environment SA, a French publicly-listed company. Veolia is a substantial company with gross and net assets worth in the hundreds of millions of dollars as at 31 December 2013.[13]
[13] The figures for the previous year were largely the same.
Since 2004, Acquista and Veolia have conducted a joint venture business trading as Integrated Waste Services (IWS). Veolia carries on business collecting waste and transporting it to IWS which has its principal place of business in the industrial suburb of Wingfield. IWS carries on business sorting, processing, transporting, recycling and disposing of waste and soil. Veolia is IWS’ largest customer and source of materials.
Joseph Borrelli is the Chief Executive Officer of IWS and Paul Bowden is its General Manager.
The Authority
The first defendant, the Authority, was established on 1 March 2012. The Authority operates under the name “RenewalSA”.
The Land, which was then vested in the Land Management Corporation, became vested in the Authority by virtue of the Regulations. As at December 2013, the Authority owned 1,058 hectares[14] of land in greater Adelaide, of which the Land comprised 38 percent.[15]
[14] Hectares referred to in this judgment are generally rounded to the nearest hectare.
[15] Percentages referred to in this judgment are generally rounded to the nearest whole percentage.
As noted above, the governing body of the Authority is a board normally constituted of seven persons (the Board). At all material times up to 2 December 2013, there were six members of the Board: the Honourable Bronwyn Pike (Presiding Member), Helen Fulcher, Craig Holden, Theo Maras AM, Dr Amanda Rischbeith and Mike Terlet AO. On 2 December 2013, Mr Maras and Mr Terlet resigned. On 17 and 18 December 2013, Ms Rischbeith and Mr Holden resigned.
On 29 April 2012, the Authority adopted a Real Property Marketing and Pricing Policy (the Marketing & Pricing Policy). Its objective was to ensure that prices for all real property sales were properly benchmarked where appropriate and had a sound and consistent basis and that appropriate sales processes were undertaken. It included the following provisions:
6 POLICY DETAILS
6.1 Method of sale
As a general principle, and in order to achieve competitive neutrality, whenever practical to do so, a competitive sales process should be applied to sales of renewal SA’s real property assets.
Appropriate competition processes include:
·public auction;
·public tender;
·sale by private treaty, supported by public advertising;
·publicly advertised Expressions or Registrations of Interest or similar process that may lead to a select tender or negotiated outcome.
…
6.4 Off-market transactions – valuation requirements
As a general rule, off-market transactions (ie. sale of Renewal SA real property which has not been offered to the open market) to the private sector must be supported by two independent valuations. The higher of the two valuations will apply as the minimum acceptable price, unless the Chief Executive determines otherwise.
…
6.5 Valuations
Normally, approval for a sale requires an up-to-date current market valuation (see definition below) to ensure that an adequate value is being received for the property being sold.
The Australian Property Institute’s definition of Market Value is “the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.” A current market valuation that is based on this definition is the appropriate form of valuation to support the sale of any real property assets.
It is preferable for the valuation to be less than six months old to ensure its currency, although in a highly volatile market it may be appropriate to have the valuation updated. If warranted by market conditions, an older valuation may be adopted at the discretion of the Chief Executive.
Criteria which will be considered by the Chief Executive in exercising the above discretion include:
·there has been little movement in the market since the date of the valuation;
·latest sales evidence supports the valuation;
·the sale price is less than $100,000 (excluding GST);
·an option or exclusive arrangement was negotiated committing Renewal SA to a set price for a defined period.
On 3 December 2012, Treasurer’s Instruction 8 was re-issued (Treasurer’s Instruction 8). It applies to dealings in which a public authority enters into a contract involving expenditure or potential expenditure and payments made by public authorities. It requires a “contract authorisation” in respect of contracts to which it applies and a “payment authorisation” in respect of payments. It requires prior approval before contracts to which it applies can be executed in accordance with the following table:

Purchase or Contract consideration

To be approved by

< $1,100,000

·    Cabinet, or

·    The Minister; or

·    The Chief Executive or governing authority, or

·    An employee nominated by a Chief Executive or governing authority; or

·    An employee nominated by an authorised employee pursuant to clause 8.11.2.

$1,100,000 to < $11,000,000

·    Cabinet, or

·    the Minister; or

·    an employee nominated by the Minister in writing by specific Ministerial delegation that specifies the employee, the amount and the nature of the contract including the parties.

$11,000,000 and over

Cabinet.

On 26 August 2013, the Board approved and resolved that a member of the Board execute, and Bronwyn Pike executed, an instrument of delegation (the Instrument of Delegation) delegating functions in accordance with a Delegation and Authorisation Schedule (the Delegation Schedule) and Delegation and Authorisation Guidelines (the Delegation Guidelines).
At all material times, Fred Hansen was the Chief Executive Officer of the Authority. There were several general managers and executive directors reporting to him. Michael Buchan was the General Manager of Major & Residential Project Delivery. He also acted as Chief Executive in the absence of Mr Hansen. Ian Hodgen was General Manager of Industrial Project Delivery and Jason Rollison was Director of Industrial Projects reporting to him. Daniel DeConno was General Manager of Asset Management and Aaron Brumby was Director of Asset Management reporting to him. Warren Smith was Executive Director of Corporate Affairs and Strategy. Warren Smith was also secretary to the Board with responsibility inter alia for communicating with board members, sending out board documents and keeping the minutes of meetings.
On 25 March 2013, the Authority executed a power of attorney (the Power of Attorney) appointing 11 executive employees of the Authority, including Mr Hansen, as attorneys to execute deeds to which the Authority was a party.
The State
The second defendant, the State of South Australia, is being sued pursuant to section 5 of the Crown Proceedings Act 1992 (SA)[16] for the acts of the Minister for Urban Development and the Minister for State Development. At material times, the Honourable Tom Koutsantonis MP was the Minister for Urban Development and the Honourable Jay Weatherill MP was the Minister for State Development.
[16] Section 4 defines “Crown”.
Adelaide Capital Partners
The third defendant, ACP, is a company incorporated in September 2012. Its shares are owned as to 50 percent by ResourceCo Holdings Pty Ltd and as to 50 percent by Gerlach Asset Development Pty Ltd. Its directors are Simon Brown and Andrew Watson (associated with ResourceCo) and Stephen and Andrew Gerlach (associated with Gerlach Asset Development).
Waste and soil management industries
Waste management industry
The waste management industry in greater Adelaide involves the collection, transport, sorting, processing and recycling or disposal of waste. The waste is generated by household activities (Municipal Solid Waste), commercial and industrial activities (Commercial and Industrial Waste) and construction and demolition activities (Construction and Demolition Waste). The vast majority of Construction and Demolition Waste is generated and collected in bulk but a small minority is deposited into and collected in skip bins.
There are three main operators in the waste management industry in greater Adelaide:
·ResourceCo Pty Ltd (ResourceCo);
·IWS and Veolia (the IWS group); and
·Adelaide Resource Recovery (ARR).
Each of the three main operators operates its own waste processing facility at Wingfield. Waste is delivered to the facility at Wingfield, where it is sorted and processed. The waste is then delivered elsewhere for recycling or disposal, except in the case of ARR where recovered soil is disposed of on site.

There are six major sites in South Australia used for the ultimate disposal of waste (waste depots). These waste depots are all outside the Adelaide metropolitan area and substantial transport costs are incurred to transport waste to them from the Adelaide metropolitan area. Those transport costs are higher than if the materials were transported to a location well within the Adelaide metropolitan area (such as Wingfield or Gillman). Third parties have waste depots at Inkerman (capacity about 25 million tonnes), Uleybury and McLaren Vale (each having a capacity of about 5 million tonnes).
ResourceCo has waste depots at McLaren Vale and Hartley, each with a capacity of about 10 million tonnes of waste.
IWS has a waste depot at Dublin, which has a capacity of about 80 million tonnes of waste. IWS disposes of waste at the Dublin waste depot. This involves IWS first excavating existing calcrete and overburden in cells, lining the cells and then depositing the waste. IWS currently deals with the excavated calcrete and clean soil by selling or stockpiling them.
ARR does not have a waste depot of its own for the ultimate disposal of waste, but uses depots operated by others and in particular IWS’ Dublin site.
Soil management industry
The soil management industry in greater Adelaide involves the collection, transport, processing and re-use as filling material or disposal of soil material (soil). One source of soil is excavation for the purposes of development and construction. Another source is the separation of soil from conglomerated Construction and Demolition Waste, which might contain a majority or minority of soil mixed with building materials.
Since late 2009, soil has been classified into four categories:
·high level contaminated soil;
·low level contaminated soil;
·waste fill; and
·clean fill.
Regardless of its source, contaminated soil (high and low level) is required under the Environment Protection Act 1993 (SA) and the Environment Protection Regulations 2009 (SA) to be treated where necessary and disposed of at a licensed waste depot. A levy of $52 per tonne is payable to the Environment Protection Agency (the EPA) on disposal of high and low level contaminated soil.
Waste fill is permitted to be disposed of as soil filling at sites requiring additional soil to increase the surface level of the site. No levy is payable to the EPA on such soil. Waste fill is defined in terms of mineralogical composition, particle size and thresholds for contamination by defined chemicals.[17] Soil material is usually required to be separated and/or processed to meet the criteria for waste fill. Waste fill might be derived from excavated soil or soil that has been separated from conglomerated Construction and Demolition Waste. Clean fill is uncontaminated soil that is excavated and meets the criteria for waste fill without separation or processing.
[17] Environment Protection Regulations 2009 (SA) reg 3(1).
Approximately 30 percent of soil material excavated or extracted is contaminated and required to be disposed of at a licensed waste depot. Approximately 70 percent of soil material excavated or extracted can, after processing, meet the criteria for waste fill and can be used for land filling purposes. For example, some of the soil material excavated for the recent re-development of Adelaide Oval and the development of the new Royal Adelaide Hospital has been classified as waste fill. Only a small proportion of total soil is clean fill.
There are a limited number of residential, commercial or industrial developments in greater Adelaide seeking fill to build up land at any one time. Such developments generally charge between $8 and $12 per tonne to receive fill. Supply of fill greatly exceeds demand.
There are three main operators in the soil management industry in greater Adelaide. They are also the three main operators in the waste management industry, namely ResourceCo, the IWS group and ARR. This is not coincidental because Construction and Demolition Waste is a major source of soil.
The concept of waste fill being exempt from the EPA levy and the use of waste fill as filling on development sites or potential development sites is relatively recent, originating in late 2009. ResourceCo was the first to enter that market. ARR entered the market by 2012 and IWS in 2012.
Adelaide City Council (the Council) formerly licensed a site at Gillman comprising 16 hectares (Lot 201) that it had been filling with waste fill.
Mr Borrelli gave evidence that ResourceCo has approximately 50 to 60 percent of the soil management market, ARR has approximately 20 to 30 percent and IWS has approximately 20 percent.[18]
[18] This evidence was not challenged in cross-examination or contradicted by evidence from the defendants.
IWS business
The soil component of IWS’ total waste and soil management business represents about 40 to 50 percent of its business. Of that soil component, clean fill and waste fill represent about 30 percent and contaminated fill represents about 70 percent.
IWS operates a 12 hectare transfer station and recycling centre at Wingfield. IWS does not collect waste but receives it from customers, the largest of which is Veolia. Waste is received at IWS’ site at Wingfield, where it is sorted into components, processed where necessary, recyclable components are sold off-site or transported to Dublin and the residual waste is then transported to Dublin. IWS also receives soil that is transported directly to its Dublin site. The Wingfield site has the capacity to process approximately ½ million tonnes of waste per annum.
IWS’ site at Dublin covers about 1,000 hectares and is located 55 kilometres from Wingfield. To date, 10 percent of the site has been excavated to create cells, giving rise to 3 million tonnes of excavated material. Much of the material remains stockpiled at Dublin in verge mounds and IWS has an interest in disposing of it to make room for the landfill operations. The site has a capacity to receive approximately 80 million tonnes of waste.
IWS receives construction and demolition waste in skips at Wingfield which is sorted into waste and soil material. If the soil material meets the specification for waste fill, IWS disposes of it at Dublin without having to pay the EPA levy of $52 per tonne.
IWS owns a fleet of five B-Double trucks, each with a 35 tonne pay load. These trucks, together with trucks operated by subcontractors, transport residual waste and recovered soil from Wingfield to Dublin and clean fill and waste fill from source to Dublin. On occasions, they transport calcrete and overburden from Dublin to purchasers or disposal points, but generally they return from Dublin to Adelaide empty.
IWS charges a fee to customers to receive and dispose of waste and soil at its sites at Wingfield and Dublin. It also charges a fee for transport to the extent that it undertakes transport rather than its customer. The fee charged for receival and disposal of clean or waste fill is about $20 to $40 per tonne. The fee charged for transport of clean or waste fill from the central business district is about $8 per tonne to Wingfield and about $18 per tonne to Dublin.
The cost to IWS of transport of clean and waste fill from Wingfield to Dublin is about $12 per tonne; whereas the cost of transport from Wingfield to Gillman would be about $2 per tonne, giving rise to a $10 differential transport cost.
IWS has a strong commercial interest in gaining access to the Land to deposit clean and waste fill received from its customers and recovered as a result of its operations as well as excavated material from its Dublin site.
The Land
Description of the Land
The Land comprises 407 hectares contained in seven allotments, namely:
·lot 3 in Deposited Plan 80215 comprising 39 hectares in the south western corner (DRR lot 3);
·lot 203 in Deposited Plan 75338 comprising 234 hectares in the south central and south eastern components (Lot 203);
·the balance of lot 3 in Deposited Plan 64288 comprising 27 hectares in the north western corner after subtraction of the EGT land[19] and the Incitec land[20] (GT lot 3);
·lot 5 in Deposited Plan 64288 comprising 98 hectares lying east of GT Lot 3 and north of Lot 203 (Lot 5);
·lot 101 in Deposited Plan 41796 (Lot 101), lot 107 in Deposited Plan 45483 (Lot 107) and lot 204 in Deposited Plan 48102 (Lot 204) comprising in total 9 hectares (the Levee land).
Appendix 1 is a map showing the location of the Land and its constituent allotments.[21]
[19] See [91] below.
[20] See [99] below.
[21] From exhibit P2.
The Land is situated in the suburbs of Gillman and Dry Creek and is 12 kilometres by road from the Adelaide GPO.[22] The Land lies generally north of the Port River Expressway; east of Wicker Road; south of the North Arm Creek; and west of the North Arm Creek and the freshwater Barker Wetlands (the Barker Wetlands).
[22] Annexure C to ACP’s August proposal being an attachment to the September Cabinet submission, page 605.
The Land is approximately triangular in shape. On its southern side, it is bounded by the Port River Expressway to the west, the freshwater Range Wetlands (the Range Wetlands) in the middle and the resource recovery operations at Wingfield to the east. On its western side, it is bounded by the freshwater Magazine Creek Wetlands (the Magazine Creek Wetlands) to the south, the Authority’s Incitec land[23] and EGT land[24] in the middle and Wicker Road/Grand Trunkway to the north. On its northern, north-eastern and eastern sides, it is bounded by the North Arm Creek and the Barker Wetlands.
[23] See [99] below.
[24] See [91] below.
An earthen sea wall (the Seawall) has been constructed along the northern and north-eastern boundary of the Land to protect the Land from tidal inundation from the North Arm Creek. The Seawall is constructed on the Levee land.
DRR lot 3 is broadly rectangular in shape, with its southern (long) side bounded by the Port River Expressway. Lot 203 is broadly rectangular in shape. It includes a significant bulge on its northerly (long) side towards Lot 5. Lots 201 and 202 intrude into the rectangle on its southerly (long) side towards its eastern end. Lot 5 is broadly triangular in shape. GT lot 3 is an irregular shape comprising land north of the EGT land and Incitec land together with a smaller area east of the Incitec land.
A substantial portion of the Land (the Basins) is used by the Torrens Road Drainage Authority (TRDA) for the management of stormwater originating from the north-western suburbs over an area of 2,300 hectares that flows into the Basins and then discharges into the sea via the Dolphin Sanctuary.[25]
[25] Recital H of the draft Deed version 7.1 attached to the December Cabinet submission, page 1008.
The Land is low lying. It has acid sulphate soils containing 90,000 tonnes of sulphuric acid.[26] Parts contain remnant vegetation and habitat of high environmental significance.[27] To facilitate development of the Land for industrial purposes, it would need to be filled with millions of cubic metres of fill.[28] The Department of Environment, Water and Natural Resources is and for some years has been concerned that such development would have a negative environmental impact through the placement of millions of cubic metres of fill materials, acid sulphate soil conditions, the presence of remnant vegetation and habitat of high environmental significance and the present use of the land by the TRDA for the retention of stormwater. [29]
[26] September Cabinet submission, page 587; December Cabinet submission, page 991.
[27] September Cabinet submission, page 587; December Cabinet submission, page 991.
[28] ACP’s August proposal attached to the September Cabinet submission, page 598.
[29] September Cabinet submission, page 587; December Cabinet submission, page 991.
The Land is located within the City of Port Adelaide Enfield Local Government Area.[30] Most of the Land is within the Multi Function Polis (MFP) zone.[31] Smaller parts are within the General Industry Zone, the Industry (Resource Recovery) and Coastal Management Zone and the MOSS [Metropolitan Open Space System] (Conservation) Zone. Appendix 2 is a map showing the zoning of the Land.[32]
[30] Except a section on the western edge of Lot 5 that is not within a Council area.
[31] September Cabinet submission, page 578.
[32] From exhibit P1, page 775.
History of the Land
In the past, it was proposed that a Multi Function Polis be built in the vicinity of Gillman and Dry Creek including much of the Land. In the 1990s, land was zoned MFP accordingly.[33]
[33] September Cabinet submission, pages 575, 578.
At some point, the Council acquired a 50 percent beneficial interest in the southern portion, representing about two thirds, of the Land (Lot 500 and Lot 31 (collectively the Dean Rifle Range) and Lot 107).[34]
[34] See [81] below.
At some point, the Land Management Corporation was formed[35] and land which included the Land was vested in the Land Management Corporation.
[35] Public Corporations (Land Management Corporation) Regulations 1997 (SA) reg 13(1)(a).
Over the years, assessments undertaken as part of the Multi Function Polis proposal, the Commonwealth Natural Disasters and Risk Mitigation Program and in connection with the acquisition of the Council’s interest in part of the Land estimated that up to 200 hectares of the Land is required for stormwater management purposes.[36]
[36] September Cabinet submission, page 575.
In 2009, a Structure Plan was prepared for the Land Management Corporation (the Structure Plan).[37] The Structure Plan said that up to 200 hectares of the Land was required for stormwater management purposes.[38]
[37] September Cabinet submission, page 572.
[38] September Cabinet submission, page 575.
As at February 2010, the Land formed part of a larger area of 471 hectares contained in seven allotments, namely:
·lot 500 in Deposited Plan 59781 comprising 43 hectares in the south west (Lot 500) beneficially owned by the Land Management Corporation and the Council in equal shares;
·lot 31 in Deposited Plan 73690 comprising 268 hectares in the south central and south east (Lot 31) beneficially owned by the Land Management Corporation and the Council in equal shares;
·lot 3 in Deposited Plan 64288 comprising 53 hectares in the north west;
·lot 5;
·lot 101, lot 107 and lot 204.
On 11 February 2010, the State compulsorily acquired Lot 500, Lot 31 and Lot 107 and thereafter they were vested in the Land Management Corporation free of the Council’s 50 percent interest.[39] The parties could not agree on its value and ultimately the Council instituted proceedings in the Land and Valuation Court to determine its value.[40]
[39] Recital E to the draft deed version 7.1 attached to the December Cabinet submission, page 1007.
[40] September Cabinet submission, page 575.
At some point, the 30-Year Plan for Greater Adelaide (the 30 Year Plan) was prepared. It identified that the Land is well located with respect to transport infrastructure (roads, rail and sea). It considered that the majority of the Land should be regarded as a “Key Industry Area” and the balance as “Metropolitan Open Space System” or “High Environmental Significance.” It identified the following action in relation to Gillman: “provide infrastructure, improve zoning and fill land to bring employment lands to market”.[41]
[41] September Cabinet submission, page 578.
In May 2010, Lot 31 was divided into Lot 201 (16 hectares), Lot 202 (16 hectares) and lot 203 (234 hectares) (Lot 203) in Deposited Plan 75338.
In June 2010, Lot 500 was divided into lot 1 (5 hectares) lot 2 (3 hectares) and lot 3 (39 hectares) (DRR Lot 3).
At some point, the Land Management Corporation agreed to sell 16 hectares (Lot 202) to the north of Lot 201 to a company associated with ResourceCo. Settlement of that sale took place in 2010.[42]
[42] ACP’s August proposal, page 540.
In February 2012, Peter Southwick of Southwick Goodyear prepared a report for the Council valuing Lots 500, 31 and 107 as at February 2010 at $42 million, giving a compensation figure for the Council of $21 million plus $7.54 million for business value and $100,000 for disturbance and giving a total compensable value of the Council’s interest in that land of $28.64 million.
On 1 March 2012, upon the creation of the Authority, the land identified at [81] above with the exception of Lot 202, comprising approximately 450 hectares, (the Gillman land) was vested in the Authority in lieu of the Land Management Corporation.
At some point before ACP’s first proposal in June 2013, the Authority expected ultimately to develop 230 hectares of the Gillman land with a view to selling allotments of land that could be developed for industrial use.[43] This comprised 195 hectares within the Dean Rifle Range and 35 hectares within lot 3 in Deposited Plan 64288 developable in the longer term.[44] The Authority commenced preparation of a master plan (ultimately completed in November 2013) intended to form the basis of a subsequent Development Plan Amendment rezoning 230 hectares of the Gillman land for industrial use.[45]
[43] Recital K of draft deed version 7.1 attached to the December Cabinet submission, page 1008.
[44] eptember Cabinet submission, pages 575, 582; December Cabinet submission, pages 981, 986.
[45] Recital K of draft deed version 7.1 attached to the December Cabinet submission page 1008.
At some point, the Authority prepared projections of revenue and cost of sales in acting as master developer over 15 or 20 years.[46] These projections were based on the assumption that 195 hectares of the Dean Rifle Range would be developed for industrial purposes.[47] Projections of gross profit of tens of millions of dollars were incorporated in the Authority’s approved budget and ultimately summarised in the September and December Cabinet submissions.[48] These projections did not include holding costs or land tax payable by the Authority to the State.[49]
[46] September Cabinet submission, page 582; December Cabinet submission, pages 981, 986.
[47] December Cabinet submission, pages 981, 986.
[48] September Cabinet submission, pages 583–584; December Cabinet Submissions, pages 985-988.
[49] December Cabinet submission, pages 985-988.
At some point before ACP’s proposal in August 2013, the Authority decided to develop as an early stage of development of the Gillman land 15 hectares known as East Grand Trunkway (the EGT land) in the south-western corner of lot 3 in Deposited Plan 64288 for sale as industrial allotments.[50]
[50] September Cabinet submission, page 574, 579; Recital I and clause 2.3 of draft deed version 7.1 attached to the December Cabinet submission, pages 1008, 1010.
At some point before ACP’s proposal in August 2013, the Authority decided to develop as an early stage of the development of the Gillman land 17 hectares known as the Hansen Road Extension (the HRE land) on the southern boundary of Lot 203 immediately west of Lots 201 and 202 for sale as industrial allotments.[51]
[51] Recital I and clause 2.4 of draft deed version 7.1 attached to the December Cabinet submission, pages 1008, 1010.
In August 2013, Robert Taylor of Savills prepared a report for the Authority valuing Lots 500, 31 and 107 as at February 2010 at $13.3 million, giving a compensation figure for the Council of $6.65 million plus $50,000 for disturbance and giving a total compensable value of the Council’s interest in that land of $6.7 million.
At some point before the September Cabinet submission, the Authority agreed a heads of agreement to transfer an allotment to an intending purchaser (Lot 201 to ARR).[52]
[52] September Cabinet submission, pages 581, 582.
At some point before the September Cabinet submission, the Department of Environment, Water and Natural Resources indicated that it would only support development of the Gillman land if 200 hectares were retained for stormwater and environmental purposes in accordance with the Structure Plan.

On 18 November 2013, the draft Gillman Masterplan Report in relation to the Gillman land was released by the Authority for public consultation (the Masterplan Report).[53]
[53] December Cabinet submission, page 978.
The Masterplan Report included a proposal for the development of the Gillman land. The proposed development involved 207 hectares being developed in four stages for industrial purposes, which comprised the Dean Rifle Range (168 hectares) and Lot 3 in Deposited Plan 64288 (39 hectares including the Incitec land). It also proposed the development of 29 hectares of the Dean Rifle Range for expansion of the Resource Recovery Precinct. In total it showed development of 226 hectares of the Land (excluding the 10 hectares of Incitec land). This assumed that the land would be rezoned from MFP zone to General Industry zone. The balance of the Land, being approximately 181 hectares, would be used for stormwater management and the seawall.
It is apparent that any development of the Land for industrial purposes would be subject to constraints. Those constraints include the need to address and accommodate the use of part of the Land for stormwater purposes; environmental issues including managing the acid sulphate soils and the present environmental significance of the Land; the need to fill the Land extensively; the need to rezone those portions of the Land to be used for industrial purposes; and the need to obtain development approval to fill the Land and develop it for industrial purposes.
At some point before the December Cabinet submission, the Authority projected that it would transfer to Incitec Pivot Limited (Incitec) 11 hectares (the Incitec land) in the south-western corner of lot 3 in Deposited Plan 64288, being land immediately to the east of the EGT land.[54]
Expressions of interest by soil management operators
[54] December Cabinet submissions, pages 976, 986.
Approach by IWS
On 6 March 2013, Mr Borrelli together with IWS’ General Manager Paul Bowden met with Ian Hodgen, Jason Rollison and Michael Terlet of the Authority. There was discussion about soil from IWS being used as fill material on the Gillman land. There was discussion about the Authority seeking rezoning of the land to industry and seeking development approval for development of the land. There was discussion about some form of arrangement between IWS and the Authority. Mr Borrelli gave to Mr Rollison a document entitled Gillman/New Port Keys Remediation & Development Action Plan Joint Venture Proposal (the IWS March Proposal), which Mr Rollison skimmed and handed back to Mr Borrelli at the end of the meeting.
Mr Borrelli and Mr Rollison gave evidence about the discussion. There were divergences between their evidence that I address below.
Approach by ARR
On 2 April 2013, ARR wrote to the Authority expressing interest in acquiring the whole of the 311 hectares comprising the Dean Rifle Range.
Approach by ACP
On 18 June 2013, ACP wrote to the Premier, the Honourable Jay Weatherill MP. The letter proposed the acquisition of the Gillman land (450 hectares) for up to $135 million to be paid in three instalments of $45 million in each of the 2014, 2018 and 2022 financial years, equating to $30 per square metre. The letter sought an exclusive development option over the land for six months to enable international investors to decide whether they wished to purchase the land. It was proposed that land suitable for industrial development be filled, with ACP providing 2 million tonnes per year of fill material. The site would be developed as an industrial estate known as the Lipson Industrial Estate.[55]
[55] ACP’s August proposal attached to the September Cabinet submission, pages 598-600.
Between 6 and 26 August 2013, several meetings took place between representatives of ACP and staff of the Authority to discuss the proposal.
ACP’s August proposal
The proposal
On 29 August 2013, the solicitors for ACP wrote to the Honourable Jay Weatherill MP making a more formal proposal (ACP’s August Proposal).[56] The proposal was for the grant to ACP of an option to purchase 418 hectares of the Gillman land for $30 per square metre of usable land. The proposal included as attachments:
·ACP’s letter to the Premier dated 18 June 2013;
·explanations of the site, the proposed corporate structure for the project, ACP and its directors and ACP’s project partners;
·a draft deed between the Authority, the Minister for State Development and ACP (the August draft deed);
·an explanatory memorandum summarising the proposal by reference to clauses of the August draft deed.
[56] ACP’s August proposal attached to the September Cabinet submission.
The explanation of the site described it as having been:
identified as arguably the most strategically positioned industrial land development opportunity in the Australian market.
The explanation of corporate structure and explanatory memorandum made it clear that under the proposal ACP would not be the purchaser or developer, but that this would be a development company yet to be incorporated in which equity was to be held principally by external investors and to a small extent by ACP. The explanatory memorandum included:
If the option is exercised, ACP may nominate another purchaser. This is consistent with the corporate structure proposed by ACP to potential investors, namely a separately incorporated land development company for which ACP will act as project manager.
The explanation of corporate structure included:
It is proposed that the Lipson Estate industrial development will be undertaken by an Australian domiciled development company and ACP shall act as Project Managers via an existing management company.
It is proposed that the investor will fund the capital costs of the project on a stage by stage basis.
It is also proposed that ACP will invest directly into the development company via funding an agreed percentage of the peak equity value required. ACP will be paid an annual management fee to deliver the project on behalf of the investor and development company.
The development company will establish a separate Board of Directors (“Lipson Development Board or LBD”) comprising representatives from both the investor group and ACP. The LBD shall have responsibility for all strategic and investment decision for the project.
…
ACP shall work with the LBD in providing traditional project management services including funding advice and execution and key relationship coordination with the South Australian State Government.
…
The development functions, including filling and a remediation, placement and delivery will be undertaken via formal contracts between the development company and project partner ResourceCo.
The explanation of ACP stated that it was a joint venture between Gerlach Asset Development and ResourceCo. It described ACP as an independent Australian property development and land remediation company but did not suggest that ACP had previously engaged in any projects.
The explanation of project partners said that ResourceCo was currently processing in excess of 2 million tonnes per annum of discarded materials with access to the required fill volumes to ensure the successful infill of the Lipson Industrial Estate. It included the following reference to Lot 202:
In 2010, ResourceCo purchased a 16 ha site immediately to the north of the Lipson Industrial Estate development. This undeveloped parcel of land had the same topography and development requirements as to the proposed Lipson Industrial Estate project. This land was reclaimed and developed with fill materials sourced and supplied by ResourceCo.
ResourceCo sourced and placed nearly one million tonnes of fill material onto the site and developed the land into a completed industrial facility for use as a multipurpose recycling precinct.
The August draft deed granted an option to ACP for six months to purchase the 418 hectares. It was a condition precedent to exercise of the option that ACP develop a Project Plan identifying inter alia all regulatory approvals required to be satisfied to implement the project and how and when they were expected to be obtained. ACP also had to demonstrate it was likely to secure the financial capacity to commence the project and it had the capacity to execute it in accordance with the Project Plan. Upon execution of the option, the Authority and ACP were deemed to have entered into a land sale contract on defined terms. Those defined terms included a purchase price of $30 per square metre of “usable land” and settlement being subject to at least 230 hectares being rezoned “General Industry” and the purchaser being satisfied that all regulatory approvals had been obtained.
The September Cabinet submission
On 13 September 2013, the Chief Executive, Mr Hansen, sent a Minute to the Minister for Urban Development attaching a draft Cabinet submission prepared by Mr Rollison (in consultation with Mr Hodgen and Mr Buchan) and approved by Mr Hansen. These documents were not tendered. The Board had no involvement at that stage.
On 23 September, the Premier and the Minister for Urban Development presented a submission to Cabinet (the September Cabinet submission). The submission attached ACP’s August Proposal and most of its attachments. The Synopsis stated that a number of the key elements and implications of the ACP proposal required further consideration and clarification before it could be fully assessed. The first was:
The proposal does not provide an opportunity for market testing demand or pricing for the land, either in a single holding (as ACP proposes) or developed into individual allotments or superlots.
The September Cabinet submission said that up to 200 hectares of the land the subject of the ACP proposal had previously been identified as being required for stormwater management purposes and not supporting industrial development. It said that the Authority’s proposal to develop the Land itself was confined to an undefined portion of the land still retained by the Authority in which the Council formerly had a 50 percent interest (267 hectares).[57] It identified that the ACP proposal provided that ACP would pay $30 per square metre for “usable land” being “land capable of being developed for industrial purposes” and that this might result in ACP not paying for 200 hectares of the land.[58] The submission included two tables comparing the financial impacts of accepting the ACP proposal compared to the Authority itself acting as master developer of part of the Dean Rifle Range. Table 3 was premised on ACP paying $30 per square metre for all 418 hectares and showed a net positive financial impact to the Authority.[59] Table 4 was premised on ACP paying for 217 hectares and the third instalment of $22 million not being paid and showed a net negative financial impact to the Authority.[60]
[57] September Cabinet submission, page 575.
[58] September Cabinet submission, page 581.
[59] September Cabinet submission, pages 582-583.
[60] eptember Cabinet submission, page 584.
The September Cabinet submission recommended that the ACP proposal in its current form be rejected but that the Authority enter into negotiations with ACP to seek in principle agreement incorporating 10 variations to ACP’s August Proposal. It recommended that Cabinet approve, subject to the Authority’s assessment confirming the suitability of a revised proposal against the 10 variations, the Authority entering into a binding agreement to sell up to 418 hectares of the Authority’s land at Gillman/Dry Creek to ACP or its nominee.[61]
[61] September Cabinet submission, page 588.
Cabinet resolved in terms of the recommendation, except that the approval was subject to the Authority’s assessment confirming the suitability of a revised proposal against the 10 variations and a further submission being brought to Cabinet to authorise the Authority to enter into a binding agreement to sell up to 418 hectares of the Authority’s land at Gillman/Dry Creek to ACP or its nominee.
On 2 October 2013, representatives of the Authority met with representatives of ACP and informed them of the 10 variations the subject of the Cabinet resolution.[62]
[62] December Cabinet submission, page 976.
The Draft Contract
The Authority engaged Kyffin Thompson of BDO to advise on probity issues in connection with forthcoming negotiations between the Authority and ACP. A negotiation and evaluation plan was prepared by Ms Thompson to evaluate the outcome of negotiations with ACP against criteria defined by reference to the 10 variations the subject of the Cabinet resolution.[63]
[63] December Cabinet submission, page 979.
Between 29 October and 13 November, meetings were held between representatives of the Authority and representatives of ACP to negotiate variations to the terms of the August draft deed. On 13 November, version 7.1 of the draft deed was produced (the Draft Contract).
The Draft Contract granted three successive options to ACP to purchase defined components of the Land.[64] It was a condition precedent that by 30 June 2014 ACP develop a Project Plan identifying the land the subject of each stage of the project in a manner substantially consistent with the indicative stages described in the Concept Plan.[65] The Project Plan was to identify all regulatory approvals required to be satisfied to implement the project and how and when they were expected to be obtained.[66] It was a condition precedent that ACP demonstrate that it was likely to secure the financial capacity to commence the project and had the capacity to execute it in accordance with the Project Plan and the Draft Contract.[67]
[64] Clause 7 and definitions in clause 32.
[65] Clauses 1.3 and 6 and definitions in clause 32.
[66] Clause 6 and definitions in clause 32.
[67] Clause 1.3.
The Draft Contract contained as Annexure F a Concept Plan, which said that the development process was to be implemented in three distinct four year stages, with 20 to 40 hectares per annum being filled and developed progressively. It was envisaged that stage 1 would commence in the south-eastern portion of the site and the staging would be rolled out in a logical manner to the north. The Concept Plan attached to the December Cabinet submission (the Draft Concept Plan) contained a drawing showing the location of each of stages 1, 2 and 3. Stage 1 was the largest area encompassing over 40 percent of the total (subtracting Lots 201 and 202 out of the area shown as stage 1). Stage 2 was shown as being to the north west of Stage 1 and substantially smaller than stage 1. Stage 3 was shown as being to the north west of Stage 2 and slightly smaller again.
The Draft Contract provided that the Stage 1 Option was required to be exercised by 31 December 2014, unless extended by agreement or by a force majeure or other Suspending Event, and otherwise the Draft Contract would be deemed to come to an end.[68] It was required to be exercised in respect of land not less than 150 hectares separately identified in the Project Plan as the land the subject of Stage 1 (the Stage 1 Option Land).[69] In turn, the Project Plan was required to identify the land the subject of Stage 1 in a manner substantially consistent with the indicative stage 1 described in the Concept Plan.[70] Exercise of the Stage 1 Option was subject to satisfaction of the conditions precedent.[71] Upon exercise, the Authority and ACP were deemed to have entered into and duly executed a Land Sale Contract on terms defined in the Draft Contract.[72] Those terms included that the purchase price was calculated at $30 per square metre (not including GST). They also included that settlement of the sale was subject to at least 230 hectares of the total land being rezoned “General Industry”, the purchaser being satisfied that all regulatory approvals required for Stage 1 had been obtained and deposit of a Plan of Division dividing the Stage 1 land from the balance of the land (the Settlement Conditions).[73]
[68] Clauses 7.2.1(b),7.2 and 15.
[69] Clauses 7.2.1 and 6 and definitions in clause 32.
[70] Clauses 1.3 and 6 and definitions in clause 32.
[71] Clause 7.2.1 (a)(i) and definitions in clause 32.
[72] Clause 7.6 and Annexure C.
[73] Clauses 7.5 and 7.6 and Annexures C and D. There was a limit of 6 months to satisfy the land division condition but no limit for the other conditions.
The exercise of the Stage 1 Option was subject to the potential exclusion of up to an aggregate total of 15 hectares if they satisfied defined criteria for a Project of State Significance (PoSS), could operate within the parameters of the Project Plan and ACP did not reasonably refuse to accommodate it within the project in a manner consistent with the Project Plan and on commercial terms to be negotiated.[74] The PoSS Criteria included that the land had been classified by Cabinet as a Project of State Significance or assessed by the Department for Manufacturing, Innovation, Trade, Resources and Energy (DMITRE) as a major project having regard to eight defined criteria.[75]
[74] Clause 2.6 and definitions in clause 32 and Annexure E.
[75] Annexure E.
Upon settlement of the purchase of the Stage 1 Option Land, the Authority granted to ACP a licence on the terms set out in Annexure G (the Long Term Licence).[76] There was no Annexure G attached to the Draft Contract.
[76] Clause 4.2.2.
The Stage 2 Option was required to be exercised within five years after the Stage 1 settlement date, unless extended by agreement or a force majeure or other Suspending Event.[77] The Stage 2 Option was required to be exercised in respect of the land, or part of the land, separately identifiable in the Project Plan as the land the subject of Stage 2 (the Stage 2 Option Land).[78] In turn, the Project Plan was required to identify the land the subject of Stage 2 in a manner substantially consistent with the indicative stage 2 described in the Concept Plan.[79] ACP could partially exercise on multiple occasions the Stage 2 Option in respect of separate parts of the Stage 2 Option Land, provided it identified the end user and timeframe for use of that part on each occasion.[80] Settlement was subject to the Settlement Conditions.
[77] Clauses 7.2.1(b).
[78] Clause 7.2.2 and 6 and definitions in clause 32.
[79] Clauses 1.3 and 6 and definitions in clause 32.
[80] Clause 7.4.
The Stage 3 Option was required to be exercised within nine years after the Stage 1 settlement date, unless extended by agreement or a force majeure or other Suspending Event. [81] The Stage 3 Option could be exercised even if the Stage 2 Option was not or was only partially exercised. The Stage 3 Option was required to be exercised in respect of the land, or part of the land, separately identifiable in the Project Plan as the land the subject of Stage 3 (the Stage 3 Option Land).[82] In turn, the Project Plan was required to identify the land the subject of Stage 3 in a manner substantially consistent with the indicative stage 3 described in the Concept Plan.[83] ACP could also partially exercise on multiple occasions the Stage 3 Option in respect of separate parts of the Stage 3 Option Land, provided it identified the end user and timeframe for use of that part on each occasion.[84] Settlement was subject to the Settlement Conditions.
[81] Clauses 7.2.3(c),7.2 and 15.
[82] Clauses 7.2.3 and 6 and definitions in clause 32.
[83] Clauses 1.3 and 6 and definitions in clause 32.
[84] Clause 7.4.
The exercise of the Second and Third Options was subject to the potential exclusion of up to an aggregate total of 15 hectares in each case for Projects of State Significance on terms similar to those in respect of the First Option.
ACP agreed to develop land acquired in a manner likely to substantially achieve the Project Objectives and consistently with the Project Plan at its own cost.[85]
[85] Clause 3.
The parties to the Draft Contract were the Authority, ACP and the Minister for State Development. The Draft Contract created rights and obligations as between the Authority and ACP. It was the Authority which granted the Options and the Authority which agreed to sell portions of the Land upon exercise of the Options.

The doctrine of ratification is fundamentally inconsistent with the third defendants’ contention. The doctrine of ratification was succinctly described by Tindall CJ in Wilson v Tumman and Fretson[310] as follows:
That an act done, for another, by a person, not assuming to act for himself, but for such other person, though without any precedent authority whatever, becomes the act of the principal, if subsequently ratified by him, is the known and well established rule of law. In that case the principal is bound by the act … to the same extent as by, and with all the consequences which follow from, the same act done by his previous authority.[311]
[310] (1843) 6 M&G ER 235.
[311] Ibid at 242.
It is clear from the reference to “becomes” in the formulation of the rule that, although it operates retrospectively, the purported principal only becomes bound if and when the principal ratifies.[312] In Davison v Vickery’s Motors Ltd (in liq),[313] Issaacs J said:
On ratification, and not before, the agreement is as a general rule deemed by a fiction to have been made by his antecedent authority to the person actually making it.[314]
(Emphasis added)
[312] See also the formulation of the rule in Jones v Peters [1948] VLR 331 at 335 per Herring CJ.
[313] (1925) 37 CLR 1.
[314] Ibid at 19.
The doctrine of ratification requires a positive act by which the principal unequivocally adopts the contract.[315] The act must be done with full knowledge of the facts and circumstances relating to the agent’s authorised act.[316] Ratification must be effected within a reasonable time of the unauthorised act.[317] The onus of proof of ratification lies on the person asserting ratification.[318] Each of these requirements is inconsistent with the contract being binding unless repudiated by the principal and demonstrates that there is no contract with the principal unless and until there is an affirmative act of ratification.
[315] Harrisons & Crossfield Ltd v London & North-Western Railway Co [1917] 2 KB 755 and 758 per Rowlatt J; Petersen v Moloney (1951) 84 CLR 91 at 101 per Dixon, Fullagar and Kitto JJ.
[316] Savery v King (1856) 5 HL Cas 627; 10 ER 1046; Taylor v Smith (1926) 38 CLR 48 at 54-55 per Knox CJ, 59 per Higgins J, 60 per Rich J and 61–62 per Starke J; Victorian Professional Group Management Pty Ltd v The Proprietors “Surfers Aquarius” Building Units Plan No 3881 [1991] 1 Qd R 487 at 496–497 per Connolly J and 499–500 per Thomas J.
[317] In Re Portuguese Consolidated Copper Mines Ltd (1890) LR 45 Ch D 16 at 31 per Lindley LJ and 34 per Bowen LJ; Lifesavers (Australasia) Ltd v Frigmobile Pty Ltd [1983] 1 NSWLR 431 at 438 per Hutley JA.
[318] Taylor v Smith (1926) 38 CLR 48 at 55 per Knox CJ, 60 per Rich J and 61–62 per Starke J.
The third defendant refers to the decision of the English Court of Appeal in Bolton Partners v Lambert[319] as authority for the proposition that an act of ratification is effective as having retrospective effect notwithstanding that before the act of ratification the other party has repudiated the contract. The third defendant contends that this principle is consistent only with the contract being valid unless and until the principal elects to avoid it for want of authority.
[319] (1889) LR 41 Ch D 295.
In Bolton Partners v Lambert,[320] on 8 December 1886 Lambert wrote to Scratchley, the managing director of Bolton Partners, offering to purchase its factory. On 13 December 1886, Scratchley replied accepting the offer on behalf of the company. On 13 January 1887, Lambert wrote to the company repudiating the agreement on the ground that he had been misled by misrepresentations as to the value of the factory. On 28 January 1887, the board of directors of the company ratified the agreement made by Scratchley. It was held that Scratchley had not had authority in December 1886 to enter into the agreement but, on ratification by the board, the contract came into existence retrospectively notwithstanding the intervening repudiation by Lambert. Cotton LJ said:
[320] Ibid.
The rule as to ratification by the principal of acts done by an assumed agent is that the ratification is thrown back to the date of the act done, and that the agent is put in same position as if he had had authority to do the act at the time the act was done by him.… The case of Hagedorn v Oliverson is a strong case of the application of the principle. It was there pointed out how favourable the rule was to the principal, because till ratification he was not bound, and he had an option to adopt or not to adopt what had been done. …
I think the proper view is that the acceptance by Scratchley did constitute a contract, subject to its being shewn that Scratchley had authority to bind the company. If that were not shewn there would be no contract on the part of the company, but when and as soon as authority was given to Scratchley to bind the company the authority was thrown back to the time when the act was done by Scratchley, and prevented the Defendant withdrawing his offer, because it was then no longer an offer, but a binding contract.[321]
[321] Ibid at 306 and 307-308.
(Footnotes omitted)
Lindley LJ agreed with Cotton LJ and said:
I can find no authority in the books to warrant their contention that an offer made, and in fact accepted by a principal through an agent or otherwise, can be withdrawn. The true view on the contrary appears to be that the doctrine as to the retrospective action of ratification is applicable.
If we look at Mr Brice’s argument closely it will be found to turn on this – that the acceptance was a nullity, and unless we are prepared to say that the acceptance of the agent was absolutely a nullity, Mr Brice’s contention cannot be accepted. That the acceptance by the assumed agent cannot be treated as going for nothing is apparent from the case of Walter v James. I see no reason to take this case out of the application of the general principle as to ratification. ...[322]
(Footnotes omitted)
and Lopes LJ said:
Directly Scratchley on behalf and in the name of the Plaintiffs accepted the Defendant’s offer I think there was a contract made by Scratchley assuming to act for the plaintiffs, subject to proof by the Plaintiffs that Scratchley had that authority.
The Plaintiffs subsequently did adopt the contract, and thereby recognised the authority of their agent Scratchley. Directly they did so the doctrine of ratification applied and gave the same effect to the contract made by Scratchley as it would have had if Scratchley had been clothed with a precedent authority to make it.[323]
[322] Ibid at 309.
[323] Ibid at 309-310.
The judgments of Cotton LJ and Lopes LJ proceed on the basis that a positive act of ratification by the company was required before a contract came into existence, albeit once that occurred the contract was treated as coming into existence retrospectively on 13 December 1886. Those judgments do not establish the third defendant’s proposition of law. One passage from the judgment of the Lindley LJ, namely the reference to the acceptance not being an absolute nullity, might at first glance be thought to support the third defendant’s proposition. However, Lindley LJ agreed with Cotton LJ, who said that till ratification the principal is not bound. Further, Lindley LJ said that he was applying orthodox principles of ratification which, as identified above, are fundamentally inconsistent with the third defendant’s proposition.
Bolton Partners v Lambert[324] has been treated subsequently by the English Court of Appeal as good authority.[325] However, as pointed out by Issaacs J in Davison v Vickery’s Motors Ltd (in liq),[326] the point had already been decided the other way in Mayor of Kidderminster v Hardwicke.[327] It was doubted in Fleming v Bank of New Zealand[328] where Lord Lindley, delivering the judgment of the Privy Council, said that it caused difficulties and the Privy Council reserved the right to reconsider its correctness in future. The principle identified in Bolton Partners v Lambert[329] has not been affirmed at final appellate level in the United Kingdom.
[324] (1889) LR 41 Ch D 295.
[325] See Presentaciones Musicales SA v Secunda [1994] Ch 271.
[326] (1925) 37 CLR 1 at 14.
[327] (1873) LR 9 Ex 13.
[328] (1900) AC 577 at 587.
[329] (1889) LR 41 Ch D 295.
In Australia, in Davison v Vickery’s Motors Ltd (in liq),[330] Issaacs J, who was the only Justice to consider the matter, after an extensive and persuasive analysis of principle and authority, held that Bolton Partners v Lambert[331] was wrongly decided and should not be followed in Australia.[332] If necessary, I would follow the judgment of Issaacs J and not follow Bolton Partners v Lambert.[333] However, even assuming that it was rightly decided, it does not establish the broader proposition advanced by the third defendant that a contract purportedly entered into by an agent without authority binds the principal unless and until the principal repudiates it.
[330] (1925) 37 CLR 1.
[331] (1889) LR 41 Ch D 295.
[332] Ibid at 14-22.
[333] (1889) LR 41 Ch D 295.
The third defendant cites the dissenting judgment of Davies JA in the Queensland Court of Appeal decision in White v Tomasel[334] as authority for this proposition. In that case, Williams JA and McMurdo J held that a vendor of land could seek to set aside a transfer of land executed by the Registrar of the Court pursuant to a court order on the basis that the vendor’s auctioneer had not had actual or ostensible authority to enter into a contract of sale pursuant to which the transfer was prepared notwithstanding the infeasibility of title provisions contained in the Land Title Act 1994 (Qld). Davies JA dissented and held that the transfer could not be set aside regardless of whether the contract entered into by the auctioneer was void or voidable. In the course of his reasons, Davies JA characterised the contract as being voidable at the option of the vendor, but this was obiter dicta and no principle or authority was cited for that proposition.[335]
[334] [2004] QCA 89, [2004] 2 Qd R 438.
[335] Ibid at [8], [36].
In the present case, I have concluded that the Authority did not ratify the Contract executed by the Chief Executive purportedly on its behalf. If, contrary to my conclusion, the Chief Executive had not had authority to execute the Contract and if the question were to be determined by applying private law principles, I would have held that the Contract was void.
Statutory construction
The first and second defendants contend that the question whether a contract purportedly entered into on behalf of the Authority by a person without power is to be determined as a matter of statutory construction. I accept this contention.
The first and second defendants contend that, on its proper construction, section 19 of the Act does not render void the exercise of a power by a person purporting to act as delegate but to whom no delegation has been made or by a person whose power under a delegation does not extend to the purported exercise of power. I reject this contention.
Section 19 of the Act provides:
19—Delegations
(1)A board may delegate a function or power conferred on or vested in the board (or its statutory corporation) under this Act—
(a)     to a specified person or body; or
(b)     to a person occupying a specified office or position.
(2)     A delegation—
(a)     may be made subject to conditions and limitations specified in the instrument of delegation; and
(b)     if the instrument of delegation so provides, may be further delegated by the delegate; and
(c)     is revocable at will and does not prevent the board from acting itself in a matter.
Section 8(2)(b) of the Act provides that regulations establishing a statutory corporation must provide for the constitution of a board of management as the body’s governing body. Section 16 imposes various strategic and general management duties on a board of management but it does not define or limit the functions of the board and does not detract from section 8 which provides for the board to be the governing body of the corporation.
The purpose of section 19 is to enable a board to delegate its functions and powers as the governing body of the corporation. The natural reading of section 19 is that a delegate or purported delegate can only validly exercise power pursuant to a delegation by a board if the board has delegated power to that person to perform that function, the power exercised by that person is within the scope of the delegation (including any conditions or limitations) and the board has not revoked the delegation.
In Project Blue Sky Inc,[336] McHugh, Gummow, Kirby and Hayne JJ said:
Section 160 proceeds on the hypothesis that the ABA has power to perform certain functions and directs that it "is to perform" those functions "in a manner consistent with" the four matters set out in the section.… The fact that s 160 regulates the exercise of functions already conferred on the ABA rather than imposes essential preliminaries to the exercise of its functions strongly indicates that it was not a purpose of the Act that a breach of s 160 was intended to invalidate any act done in breach of that section.
That indication is reinforced by the nature of the obligations imposed by the s 160. Not every obligation imposed by the section has a rule-like quality which can be easily identified and applied….
…It is hardly to be supposed that it was a purpose of the legislature that the validity of a licence allocated by the ABA should depend on whether or not a court ultimately ruled that the allocation of the licence was consistent with a general direction, policy or treaty obligation falling within the terms of s 160.[337]
[336] (1998) 194 CLR 355.
[337] (1998) 194 CLR 355 at [94]-[95], [98].
Section 19 of the Act stands in stark contrast to section 160 of the Broadcasting Act. Section 19 does define the power of a delegate and does impose essential preliminaries to the exercise of a delegate’s powers. Section 19 does have a rule-like quality. Section 19 has an operation that is analogous to the general law under which the validity of the act by a purported agent is ultimately determined by a court of law.
There is no reason to construe section 19 as providing that a person to whom a power is not delegated, or a person who acts beyond the scope of a power delegated to him or her, can nevertheless bind the statutory corporation. Such a construction would be contrary to the public interest and there is no reason to attribute to the legislature such an intention.
Section 39 of the Public Corporations Act provides:
39—Validity of transactions of corporation
(1)Subject to subsection (2), a transaction to which a public corporation is a party or apparently a party (whether made or apparently made under the corporation's common seal or by a person with authority to bind the corporation) is not invalid because of—
(a)     any deficiency of power on the part of the corporation; or
(b)     any procedural irregularity on the part of the board or any director, employee or agent of the corporation; or
(c)     any procedural irregularity affecting the appointment of a director, employee or agent of the corporation.
(2)     This section does not validate a transaction in favour of a party—
(a)     who enters into the transaction with actual knowledge of the deficiency or irregularity; or
(b)     who has a connection or relationship with the corporation such that the person ought to know of the deficiency or irregularity.
Section 39 of the Public Corporations Act does not apply to the Authority.[338] The fact that the legislature considered it necessary to enact section 39 indicates that, in its absence, a procedural irregularity would render a purported exercise of a power void. While the term “procedural irregularity” is not defined, it would not extend to an act by an officer or agent of the corporation performed without power or authority.
[338] Housing and Urban Development (Administrative Arrangements) (Urban Renewal Authority) Regulations 2012 (SA) reg 8.
The defendants contend that, if section 19 is construed as rendering void an act by a purported delegate without power or authority, it would be difficult if not impossible for parties dealing with a delegate to know whether the delegate was empowered to act on behalf of the Authority. However, there is no reason why such parties could not ask the purported delegate to produce a copy of the relevant instrument of delegation.
If the Chief Executive had executed the Contract without power to do so on behalf of the Authority, no contract would have come into existence. I would have declared the Contract void and granted appropriate relief in favour of the plaintiffs.
Decision made in breach of section 11
The plaintiffs’ second contention is that the Contract Decision was made in breach of section 11 of the Public Corporations Act and the Contract was thereby rendered void or alternatively entry into the Contract by the Authority was unlawful and performance of it should be restrained by injunction.
I have concluded that the decision to enter into the Contract was made in breach of section 11 of the Public Corporations Act. However, I have held that, as a matter of construction, section 11 of the Public Corporations Act does not render a decision or act (including entry into a contract) in contravention of its provisions void. If I had held otherwise, I would have declared the Contract void.
I have concluded that the decision to enter into the Contract was unlawful in the sense used by McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc.[339] I have concluded that the Contract was not rendered void as a result. The plaintiffs contend that, even if section 11 of the Public Corporations Act does not render the decision to enter into a contract or the contract itself void, nevertheless the Court can and should grant an injunction restraining performance of the contract. If the Contract is valid, there is no basis to grant an injunction restraining its performance.
Decision made unreasonably in the Wednesbury sense
[339] (1998) 194 CLR 355 at [100].
The plaintiffs’ third contention is that the Contract Decision was unreasonable in the Wednesbury sense and the Contract was thereby rendered void. I have concluded that the Contract Decision was unreasonable in the Wednesbury sense.
The plaintiffs contend that the Contract Decision was a nullity[340] and it follows that the Contract itself is void. The defendants contend that the question whether the Contract Decision and the Contract itself are rendered void turns on the question whether the statutory intention was to render Wednesbury- unreasonable decisions and acts void or merely unlawful in accordance with the principles identified by the High Court in Project Blue Sky Inc.[341] The defendants contend that the statutory intention was not to render them void.
[340] Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476 at [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ.
[341] (1998) 194 CLR 355.
I accept the defendants’ contention. I have concluded that the Contract Decision was unreasonable in the Wednesbury sense on the basis that it is an implied condition of the power of the Authority conferred by the Act in the context of the Public Corporations Act that it not make a decision, inter alia, to enter into a contract that is unreasonable in the Wednesbury sense. As it is the statute that is the source of that implied condition, it is necessary to turn to the statutory provisions to determine whether non-compliance with the implied condition renders the act void or merely (at worst) unlawful. This raises the question of statutory construction articulated by the High Court in Project Blue Sky Inc.[342]
[342] Ibid.
The defendants contend that it would be anomalous to apply statutory construction principles to determine whether an act in breach of the express obligation imposed by section 11 of the Public Corporations Act is invalid but not to apply them to determine whether an act in breach of an implied obligation imposed by the Act not to act unreasonably in the Wednesbury sense is invalid. The defendants contend that it would be anomalous if, in the latter case only, the question of invalidity is to be determined by a general law principle. I accept this contention.

Turning to the question of statutory construction, the question whether the Authority has acted unreasonably in the Wednesbury sense will often involve matters of judgment and degree and it may be difficult to determine this unless and until the question is decided by a court. The observation of the High Court in Project Blue Sky Inc that “[i]t is hardly to be supposed that it was a purpose of the legislature that the validity of a licence allocated by the ABA should depend on whether or not a court ultimately ruled that the allocation of the licence was consistent with a general direction, policy or treaty obligation falling within the terms of s 160”[343]is apposite to the validity of a contract entered into by the Authority. It is hardly to be supposed that it was a purpose of the legislature that the validity of a contract entered into by the Authority should depend on whether or not a court ultimately rules that the decision to enter into the contract was unreasonable in the Wednesbury sense.
[343] Ibid at [98] per McHugh, Gummow, Kirby and Hayne JJ.
The observation of the High Court in Project Blue Sky Inc that “[s]ection 160 proceeds on the hypothesis that the ABA has power to perform certain functions and directs that it “is to perform” those functions “in a manner consistent with” the four matters set out in the section”[344] is apposite to section 21 of the Act. Section 21 proceeds on the hypothesis that the Authority has power to enter into contracts and implicitly directs that in the exercise of that power the Authority is not to act unreasonably in the Wednesbury sense.
[344] Ibid at [94] per McHugh, Gummow, Kirby and Hayne JJ.
On its proper construction, the Act does not render void a decision by the Authority to enter into a contract or the contract itself if the decision is unreasonable in the Wednesbury sense.
Decision without regard to mandatory relevant factor
The plaintiffs’ fourth contention is that the Contract Decision was made without regard to a factor to which the decision-maker was required to have regard pursuant to section 11 of the Public Corporations Act and the Contract was thereby rendered void.
I have concluded that the Contract Decision was made without regard to a mandatory relevant factor, namely prudent commercial principles consistent with the Authority’s functions.
The plaintiffs contend that the Contract Decision is a nullity[345] and it follows that the Contract itself is void. The defendants rely on the fact that the source of the Authority’s obligation to have regard to prudent commercial principles is consistent with its functions in section 11 of the Public Corporations Act. They contend that the question whether the Contract Decision and the Contract itself are rendered void for failure to have regard to those principles must turn on the question whether it was the statutory intention to render decisions and acts made without regard to that factor void or merely unlawful in accordance with the principles identified in Project Blue Sky Inc.[346] The defendants contend that the statutory intention was not to render them void.
[345] Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476 at [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ.
[346] (1998) 194 CLR 355.
I have concluded that the Contract Decision was made without regard to a mandatory relevant factor on the basis that it is an implied condition that, in deciding to enter into a contract, the Authority must have regard to prudent commercial principles consistent with its functions in accordance with section 11 of the Public Corporations Act. As it is the statute that is the source of that implied condition, namely section 21 of the Act and section 11 of the Public Corporations Act, it is necessary to turn to the statutory provisions to determine whether non-compliance with that condition renders the act void or merely (at worst) unlawful. This raises the question of statutory construction articulated by the High Court in Project Blue Sky Inc.[347]
[347] Ibid.
The defendants contend that it would be anomalous to apply statutory construction principles to determine whether a decision not made in accordance with prudent commercial principles consistent with its functions in breach of the express obligation under section 11 of the Public Corporations Act is invalid but not to apply them to determine whether a decision made without regard to prudent commercial principles consistent with its functions in breach of an implied obligation imposed by the Act and the Public Corporations Act is invalid. The defendants contend that it would be anomalous if, in the latter case only, the question of invalidity is to be determined by a general law principle. I accept this contention.
Turning to the question of statutory construction, the question is answered by the considerations I have already addressed at [473] to [475] above in the context of a breach of section 11 of the Public Corporations Act.
On their proper construction, the Act and the Public Corporations Act do not render void a decision by the Authority to enter into a contract or the contract itself when the decision is made without regard to prudent commercial principles consistent with its functions.
PART K: THE MINISTER FOR STATE DEVELOPMENT
The defendants contend that, regardless of whether the Contract would be void or amenable to injunctive or other relief at the instance of the plaintiffs if it had only been between the Authority and ACP, the Contract will continue to bind the State. This is because it was entered into by the Premier in the exercise of State executive power to contract for the sale of, or grant of options to buy, property held on behalf of the Crown. The defendants contend that, as head of the government, the Premier is empowered to bind the executive in contract provided the contract is incidental to the ordinary and well recognised functions of government.[348] The defendants contend that entry into commercial transactions exploiting the strategic assets of the State for the benefit of the people of the State falls within the ordinary functions of government. The defendants contend that there is nothing in the Act or the Public Corporations Act which precludes the Premier entering into a contract to sell land vested in the Authority.
[348] The State ofNew South Wales v Bardolph (1934) 52 CLR 455 at 496 per Rich J, 507 per Dixon J (Gavan Duffy CJ agreeing) and 517 per McTiernan J; Tipperary Developments Pty Ltd v Western Australia [2009] WASCA 126, (2009) 38 WAR 488 at [3] per Wheeler JA, [88]-[94] per McLure JA (Newnes JA agreeing).
The defendants contend that the decision of the Premier to enter into a contract, being an exercise of pure executive power, is not subject to the provisions of the Act or the Public Corporations Act. It is therefore incapable of having been made in breach of section 11 of the Public Corporations Act or being conditional upon the Premier taking into account prudent commercial principles consistent with the Authority’s functions under section 11 or being conditional upon the Premier not making an unreasonable decision in the Wednesbury sense. The defendants contend that there are no substantive grounds available to review the Premier’s decision to enter into the Contract. The defendants contend that, as the Contract will continue to bind the State in any event, relief should be refused on the ground that it would be futile.
The plaintiffs contend that the role of the Minister for State Development under the Contract is extremely circumscribed and, by executing the Contract, the Minister for State Development did not purport to sell or grant options to buy the Land, legal title to which was vested in the Authority, and did not purport to act in his coincidental role as Premier. The plaintiffs contend that, in any event, any purported exercise of executive power by the State to sell or grant options to buy the Land would have been contrary to the Act and beyond power.
Effect of Minister being party to contract
The implicit premise of the defendants’ contention is that, by executing the Contract, the Honourable Jay Weatherill MP was acting on behalf of and binding the State to agree to sell the Land, or more particularly those portions of the land comprising the Stage 1 Option Land, Stage 2 Option Land and/or Stage 3 Option Land if and when ACP exercised the relevant Option to purchase that land.
I reject that premise. The Options granted by clause 9 of the Contract are granted by the Authority and not by the Minister for State Development or the State. Clause 9.6 of the Contract provides that, upon exercise of an option, the Authority and ACP will be deemed to have entered into and duly executed the Land Sale Contract which is a contract between the Authority and ACP and/or Nominee. Neither the State nor the Minister for State Development are parties to the Land Sale Contract. Nearly all of the rights and obligations conferred and imposed by the Contract are conferred and imposed upon the Authority and ACP.
The role of the Minister for State Development under the Contract is very circumscribed. The only obligation undertaken by the Minister for State Development is under subclauses 5.4.2 and 5.4.3 that, upon request by ACP for assistance to promote the project to potential investors or users, the Minister is to form an opinion whether such promotion is appropriate to the activities of government and, if so, provide that assistance. The only other substantive provision involving the Minister is an entitlement of the Minister under subclause 2.7.2 to give to ACP a PoSS Notice, which deems the project named in the notice to be a Project of State Significance on a prima facie basis. The obligation under subclauses 5.4.2 and 5.4.3 and the entitlement under subclause 2.7.2 vest in the Minister for State Development being the person who from time to time occupies that office.
The Premier is not a party to the Contract. While in December 2013 the Honourable Jay Weatherill MP did occupy the office of Premier as well as the office of Minister for State Development, by executing the Contract in his capacity as Minister for State Development he did not purport to act as Premier or to exercise any authority he might have had as Premier. Nor did he purport to contract on behalf of the State to sell, or grant options to sell, the Land.
The role of the Minister for State Development under the Contract is entirely subsidiary and incidental to the substantive rights and obligations conferred and imposed by the Contract upon the Authority and ACP. Subclauses 2.7.2, 5.4.2 and 5.4.3 are otherwise meaningless and incapable of having any operation in the absence of those substantive rights and obligations of the principal parties to the Contract.
Accordingly, assuming without deciding that, subject only to statutory abrogation or regulation, the Premier could have entered into a contract on behalf of the State to sell the Land or grant options to ACP to buy it, the Premier is not a party to the Contract, the Minister for State Development did not purport to contract on behalf of the State to sell the Land or grant options to ACP to buy it, and the defendants’ contention fails in limine. If the Contract were void as between the Authority and ACP, the very limited rights and obligations of the Minister for State Development under the Contract would fall consequentially. The fact that the Minister for State Development is a party to the Contract would not render relief in favour of the plaintiffs futile.
Power of Premier to contract to sell the Land
The defendants accept that the power vested in the executive and exercisable by the head of government may be abrogated or regulated by statute.[349] They contend, however, that this power has not been abrogated by the Act or the Regulations. The defendants accept that the abrogation can be effected expressly or by implication, but contend that to be implied abrogation must be a necessary implication.[350]
[349] The State of New South Wales v Bardolph (1934) 52 CLR 455 at 496 per Rich J.
[350] Barton v Commonwealth of Australia (1974) 131 CLR 447 at 488 per Barwick CJ, 491 per McTiernan and Menzies JJ, 51 per Mason J and 508 per Jacobs J; Ling v Commonwealth of Australia (1994) 51 FCR 88 at 92 per Gummow, Lee and Hill JJ.
Assuming without deciding that, subject only to statutory abrogation or regulation, the Premier could have entered into a contract on behalf of the State to sell the Land or grant options to ACP to buy it, such authority has been unequivocally abrogated by the Act and Regulations.
Section 8 of the Act empowers the Governor to make regulations establishing a statutory corporation under the Act, which is a body corporate with the general powers of a natural person and to specify functions and powers of the body corporate. Section 8 empowers the Governor to make regulations providing for the constitution of a board of management as the body corporate’s governing body. Section 10 empowers the Governor to appoint members of a board of management of a statutory corporation. Section 21(1)(b) empowers a statutory corporation established by regulations to, inter alia, acquire and dispose of real property.
Regulation 6(1)(c) of the Regulations provides that it is a function of the Authority, inter alia, to acquire and dispose of land. Regulation 5 provides that the board of management of the Authority will consist of seven persons. Regulation 8 applies, inter alia, sections 11 to 13 of the Public Corporations Act to the Authority, which in turn require the Authority to perform commercial operations in accordance with prudent commercial principles and use its best endeavours to achieve a level of profit consistent with its functions and perform its non-commercial operations in an efficient and effective manner consistent with its charter.
The legislative scheme imposing functions and responsibilities on body corporates formed under the Act, and in particular the Authority, is completely inconsistent with the Premier exercising executive power to dispose of land vested in and under the control of the Authority. The Act contains specific provisions for control of statutory corporations established under the Act by the Minister and it is by these provisions that the legislature defines the relationship between the executive and such a statutory corporation.[351] Those specific provisions are inconsistent with the Premier exercising executive power to dispose of land vested in and under the control of the Authority.
[351] Sections 9 and 21.
Section 22 provides that a statutory corporation holds its property on behalf of the Crown. This section does not evince a legislative intention that the executive is to have or retain power outside the Act to dispose of real property vested in a statutory corporation established under the Act. On the contrary, this section recognises the distinction between title to and control over property vested in the statutory corporation and the ultimate beneficial ownership of that property.
PART L: CONCLUSION
The plaintiffs have standing to seek judicial review. The Contract Decision is amenable to judicial review but the Advice Decision is not.
The standing delegation contained in the Instrument of Delegation did not delegate to Cabinet power to decide to enter into the Contract, nor did the Board make an ad hoc delegation in favour of Cabinet. The standing delegation contained in the Instrument of Delegation delegated to the Chief Executive power to decide to enter into the Contract, provided that he obtained the approval of the Minister for Urban Development before entering into the Contract. The Minister for Urban Development granted his approval and the Chief Executive made the substantive decision to enter into the Contract. The Chief Executive’s execution of the Contract was therefore empowered by the Authority. Otherwise, the Contract would have been void and the plaintiffs would have been entitled to relief.
The decision by the Chief Executive to enter into the Contract was unreasonable in the Wednesbury sense, was not made in accordance with prudent commercial principles consistent with the Authority’s functions under section 11 of the Public Corporations Act and was made without having regard to a factor required to be taken into account, namely prudent commercial principles consistent with the Authority’s functions.
The decision by the Chief Executive to enter into the Contract was unlawful but it was not void and did not render the Contract void.
The role of the Minister for State Development under the Contract is extremely circumscribed and the fact that the Minister for State Development is a party to the Contract would not have resulted in the Contract being effective if it otherwise had been void.
I will hear the parties as to orders to be made in light of my reasons.
Appendix 1

Appendix 2

Purchase or Contract consideration	To be approved by
< $1,100,000	· Cabinet, or · The Minister; or · The Chief Executive or governing authority, or · An employee nominated by a Chief Executive or governing authority; or · An employee nominated by an authorised employee pursuant to clause 8.11.2.
$1,100,000 to < $11,000,000	· Cabinet, or · the Minister; or · an employee nominated by the Minister in writing by specific Ministerial delegation that specifies the employee, the amount and the nature of the contract including the parties.
$11,000,000 and over	Cabinet.