K C Park Safe v Cairns City Council
[1996] QSC 136
•1 August 1996
IN THE SUPREME COURT
OF QUEENSLAND
Brisbane No. 4244 of 1996
[K C Park Safe v. Cairns City Council]
BETWEEN:
K.C. PARK SAFE (BRISBANE) PTY LTD
Applicant
AND:
CAIRNS CITY COUNCIL
Respondent
JUDGMENT - THOMAS J.
Delivered:23 July and 1 August 1996
CATCHWORDS: ADMINISTRATIVE LAW - Judicial review - Whether decisions by local authorities concerning tenders are reviewable - Local Government Act ss.395, 398, 404 - General Newspapers Pty Ltd v. Telstra (1993) 45 FCR 164, 172 distinguished.
Natural Justice - Whether a tenderer is entitled to expect or require procedural fairness in the making of a decision by a government agency - White Industries Ltd v. The Electricity Commission of New South Wales (No. 25212 of 1987, unreported Yeldham J, 20 May 1987) and Cord Holdings Ltd v. Burke & Ors (WA No. 2653 of 1984, Smith J, 22 January 1985, unreported) discussed - "Legitimate expectations" - In general, Council entitled to summarily reject, and tenderer's expense irrelevant - Special promise during negotiations capable of raising expectation that Council would take that factor into account before ceasing negotiations - Whether applicant entitled to request the decision-maker to give reasons for the decision - Schedule 2, Judicial Review Act.
Whether the proceedings can be stayed and in effect converted into a claim for damages pursuant to an undertaking by the Council to pay damages - s.48 Judicial Review Act - Faingold v. Zammit (1984) 1 FCR 87, applied.
Counsel:Mr Keane QC with him Mr Lilley for the Applicant
Mr Dutney QC with him Mr Bickford for the Respondent
Solicitors:Deacons Graham & James for the Applicant
MacDonnells for the Respondent
Hearing dates: 2 July and 1 August 1996
IN THE SUPREME COURT
OF QUEENSLAND
No. 4244 of 1996
[K C Park Safe v. Cairns City Council]
BETWEEN:
K.C. PARK SAFE (BRISBANE) PTY LTD
Applicant
AND:
CAIRNS CITY COUNCIL
Respondent
JUDGMENT - THOMAS J.
Delivered 1 August 1996
These are claims for interlocutory relief by K C Park Safe (Brisbane) Pty Ltd ("the Applicant") and the Cairns City Council ("the Council"). The Applicant seeks
(a) directions for the further conduct of its application for judicial review;
(b) a stay of further action by the Council in furtherance of the decision; and
(c) provision by the Council of a statement of reasons for the decision.
There is a cross-claim by the Council to stay or dismiss the application under s.48 of the Judicial Review Act;
The decisions that are challenged are two resolutions carried at a meeting of the Council on 7 May 1996 as follows -
"That no tenders be accepted in respect of contract no. 33/95 - design construction and operation of a multi-storey carpark at Grafton and Hartley Streets, Cairns, and that all tenderers be advised of this decision"
("the first resolution")
and
"That tenders be called on a design and construct (including partial funding option) for the carpark on the following basis:
- full funding from Council option; and/or
- part financing from builder with market based repayments; and/or
- part funding from builder with the accelerated payment option.
with tenderers having the opportunity to submit all or any of the funding options for consideration with a lodged tender."
("the second resolution")
The first resolution put an end to negotiations under an earlier tender process, and the second authorised the calling of fresh tenders for an altered type of project. In order to understand these decisions, and their effect upon the Applicant, it is necessary to know something of the history. As this is an interlocutory matter the following observations should be taken as my views of what the evidence is capable of showing.
On 24 June 1995 the Council advertised seeking tenders for the design construction and operation for a lengthy period of a multi-storey carpark on a site owned by the Council at Grafton Street. Tender documents were made available to interested parties, and the Council proceeded under s.398 of the Local Government Act 1993 to advertise. That section is a part of the system applicable to local governments when they intend to make contracts for the carrying out of work exceeding $100,000.
A number of tenders were received. Between 20 and 22 September the Council rejected other tenders and informed the Applicant that subject to certain matters being satisfactorily resolved the Council would be prepared to enter into a contract with the Applicant.
There followed fairly lengthy negotiations during which the matters raised by the Council were never satisfactorily resolved. No final concluded bargain was reached. On 16 February 1996 the Applicant's financier, Macquarie Bank, wrote to the Applicant expressing concerns on a number of matters that had arisen during the negotiations. This was brought to the attention of the Council. The parties continued negotiating, but much time passed without any final result. On 29 March the Council's solicitors indicated the Council's wish to be satisfied on financial arrangements, including the Applicant's ability to complete the desired project and requested evidence thereof. On 2 April 1995 they repeated this request. On 17 April the Applicant's solicitors requested amended documents, upon which the Council's solicitors indicated that the Council had assumed the matter was at an end. The Applicant's solicitors then requested time in which to obtain the necessary finance approval. The Council's solicitors responded, setting a deadline of 30 April for evidence of the necessary finance. No such notification was received by the Council or its solicitors during business hours up to 30 April, but a faxed note enclosing a letter of approval of finance by QIDC was sent to the Council at 6.26 p.m. on that day. This is probably sufficient to show that the applicant met this particular requirement, but of course that did not oblige the Council to accept the Applicant's offers or even to continue negotiating with the Applicant. A question arises however whether the Council, having given the Applicant a date by which to provide evidence of finance, could then withdraw from negotiations without giving some further opportunity to the Applicant to continue negotiations. This will later be discussed under 'natural justice'.
The applicant also claims that the decision was an improper exercise of power because it failed to take into account that the Applicant had satisfied concerns in relation to its financial capacity, and various other considerations that the Applicant claims would be necessary before the Council could in effect change course and call fresh tenders for a project somewhat different to the original one.
On the day following the faxed note (1 May), the Applicant's manager spoke to the Council's project manager (Mr Smyth) and was advised that the matter had been "referred to Council". On 7 May 1996 Council resolved in the terms set out above.
The Council minutes do not disclose the considerations that were taken into account in making those decisions. It cannot be assumed from this that the decision was taken without debate or relevant reasoning. A press report on the day following the decision attributes certain statements to Mr Smyth and to the mayor respectively. Mr Smyth stated that the Applicant "could not meet guarantees sought by the Council, which was not satisfied with the company's ability to achieve what was required". The mayor stated that the Council had rejected the Applicant's tender "after protracted negotiations to finalise a workable contract broke down".
Quite plainly the Council has decided not to accept any tender with respect to the original project for which tenders were called in June 1995. The resolution to call for fresh tenders is based upon a desire for a different type of project. One significant distinction is the circumstance that the 1995 tender was for the design construction and operation of the carpark whereas the present tender is merely for design and construction. Further, whilst discretion is left to the tenderer to offer "part financing" or "part funding", the emphasis on the new proposal seems to be that it will primarily be a Council-funded project. There is adequate evidence in the correspondence to support an inference that the Council's advisers tired through lack of progress in the negotiations. It is also open to think that the prospect of a long-term future relationship with another party running its carpark became less attractive than it may have initially seemed.
Although s.404 of the Local Government Act obliges a local government, if it accepts a tender, to accept the tender most advantageous to it, the section expressly provides that "local government may decide not to accept any tender or quotation available to it".
Discussion
The Applicant's request for a stay under s.29 and the Council's cross-application to dismiss under s.48 involve some common issues. It is unfortunate that the matter comes before me on an interlocutory basis, as the chamber judge, requiring a virtually total grasp of the ultimate issues before a decision can be given. The points I have to determine are in a number of respects more difficult to decide than the final issue. Very extensive material was read and extensive argument has been heard. It is difficult to think that any different factual picture will emerge at the eventual hearing, but of course anything is possible.
I am required on the stay application to consider whether the applicant shows a serious issue to be tried and whether the balance of convenience favours a stay. On the cross-application to stay or dismiss, I have a discretion to cut short the proceedings if I think it would be "inappropriate" for them to continue or if I consider that no reasonable basis for the application is disclosed.
Reviewable decision
The first question I shall consider is whether there is a serious question to be tried as to whether any reviewable decision has been made that could properly be set aside on judicial review. The Applicant's submission is that the decisions are ones to which the Judicial Review Act applies (s.4) because they were made "under an enactment", namely under the Local Government Act. The sections of the Local Government Act upon which reliance is based are ss.3(b), 20, 25, 395, 398 and 404. The first three mentioned sections are of a general kind, recognising that any local government has jurisdiction to allow it to take autonomous responsibility for the good rule and government of its area, and which recognise that it has an executive role for the administration of local government.
The obligations cast upon local authorities in entering into contracts for the carrying out of work or for the supply of services are rather limited. Section 395 provides -
In entering into contracts for the carrying out of work, or the supply of goods or services, a local government must have regard to the following principles -
(a) open and effective competition;
(b) value for money;
(c) enhancement of the capabilities of local business and industry;
(d) environmental protection;
(e) ethical behaviour and fair dealing."
That is a very general provision. It sets out relevant considerations, but they are so broad that it is difficult to prove breach, especially when all five factors are required to be taken into account at the same time, involving a balancing exercise that may make it difficult for an applicant to show that there must have been an error. (cf. Minister for Aboriginal Affairs v. Peko-Wallsend Ltd (1986) 162 CLR 24, 40-42.) The relevant factors on which the Council could properly decide to cease negotiations are practically endless. I say this with the factors of s.20(2) in mind, conscious of the fact that this is not a merit review jurisdiction. Section 398 provides as follows -
(1) A local government must invite tenders before making a contract for the carrying out of work, or the supply of goods or services, involving a cost of more than $100,000 or, if a greater amount is prescribed by regulation, the greater amount.
(2)The invitation must -
(a)be by an advertisement in a newspaper circulating generally in the local government's area; and
(b)allow at least 21 days from the day of the advertisement for the submission of tenders.
(3)This section applies subject to the following sections -
•section 400 (Exceptions to the requirement to seek tenders or quotations)
•section 403 (Short listing after calling for expressions of interest)."
(None of the exceptions is here relevant)
Section 404 provides as follows -
"404. (1) If a local government decides to accept a tender or quotation, it must accept the tender or quotation most advantageous to it.
(2)In deciding the tender or quotation most advantageous to it, the local government must have regard to the principles mentioned in section 395 (Principles governing the making of contracts).
(3)However a local government may decide not to accept any tender or quotation available to it."
It is well established that when the government (or the Crown) contracts it exercises its own prerogative power. Unless some particular statutory system is being applied, the making and breaking of governmental contracts are not matters for judicial review. They are matters for application of the ordinary commercial law (Australian National University v. Burns (1982) 64 FLR 166; Blizzard v. O'Sullivan [1994] 1 Qd.R. 112; General Newspapers Pty Ltd v. Telstra Corporation (1993) 45 FCR 164 at 172-173 (FC)).
However statutory corporations and bodies such as local authorities which depend entirely upon statutory sources for their powers may stand in a different position from the Crown (Concord Data Solutions Pty Ltd v. Director-General of Education [1994] 1 Qd.R. 343, 353). Sections 395 and 404 of the Local Government Act lay down requirements which must be observed in the tendering process. Court review of such decisions was available even before the Judicial Review Act if mandatory procedures laid down by legislation for the formation of such contracts were not complied with (Hunter Brothers v. Brisbane City Council [1984] 1 Qd.R. 328; Maxwell Contracting Pty Ltd v. Gold Coast City Council [1983] 2 Qd.R. 533; (1983) 50 LGRA 29). But no breach of that kind can be found in the present matter. Such questions are now reviewable under s.20(2)(b), assuming the preliminary point that such a decision is made under an enactment (s.4). If they are not made under an enactment, they may in an appropriate case be reviewable by prerogative order under Part 5.
In General Newspapers Pty Ltd v. Telstra (above) the full court of the Federal Court considered whether a decision of Telstra in relation to a tender for the printing of telephone directories was subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth). Telstra had negotiated new contracts with its existing printers without notice to other contractors who were on the tender list. Under its statute, Telstra was given the legal capacity of a natural person, including the capacity to enter into contracts. The fact that statutory provisions in that case were limited to a general conferral of power distinguishes them from the provisions that govern tendering by local authorities pursuant to the Local Government Act. In the Telstra case it was held that a statute merely gave Telstra the power to enter into a contract, that is the capacity to act. The validity and effect of the contract fell to be determined by the ordinary laws of contract, and the decision was held not to be reviewable.
In the present matter, although the statutory scheme is fairly simple, it seems to me that the first resolution of the Council was plainly a "(decision) not to accept any tender", and the power to make such a decision is expressly conferred by s.404(3). This power, or reservation of a right in favour of the local authority, is given in the context of requiring the local authority, in accepting tenders, to have regard to the relevant principles stated in s.395. It is sufficient for the purposes of the present application to indicate that there is at least a serious question to be tried that this was a decision made under an enactment. The operative source of the power seems to be the statute (Concord Data Solutions v. Director-General of Education (above) at p.352; Blizzard v. O'Sullivan (above) at p.118).
So far as the second resolution is concerned, it is submitted that it does not affect rights and that it is not a "decision"; it is merely a step in a process leading to a decision to award a contract. There is substance in this argument, but for present purposes it is plainly related to the termination of dealings with the Applicant, and if the Council were permitted to make further decisions such as the awarding of a contract, it would make it impossible for the Applicant to proceed further even if it were successful in setting aside the first resolution. So irrespective of the validity of this particular decision standing alone, if satisfied that the Applicant has a sufficient case to set aside the first resolution, and other matters being equal, I would be inclined to restrain the Council from proceeding to implement the second resolution at this stage. Under s.30(1)(d) of the Act the Court may make an order directing a party to do or refrain from doing anything that the Court considers necessary to do justice between the parties.
The fact that the decision was made under an enactment does not necessarily mean that the Applicant will succeed in having it reviewed or set aside. The Council plainly has power to make the decision and the question is whether there is a serious question to be tried on any ground contained in s.20(2) of the Act. The only grounds raised are s.20(2)(a) (natural justice), 20(2)(e) (improper exercise of power) and the "so unreasonable that no reasonable person could make it" ground (the so-called Wednesbury principle).
Natural Justice
In General Newspapers v. Telstra (above) it was further held that Telstra's decision to award the contract to the original publisher was not a decision which affected rights, interests or legitimate expectations of the applicant, and accordingly that the applicant was not entitled to natural justice in the reaching of the relevant decision. The applicant had been told that it was "on the tender list" but Telstra made new contracts with its existing printers without notice to the applicant and without calling for tender. The essential reasoning was that there was no relationship between Telecom and the applicant such as imposed any duty upon Telecom to give to the applicant a right to be heard in relation of the awarding of the contracts (p.174; cf. p.171).
It was submitted that as the Applicant incurred some expenditure during the extended negotiations, the situation was one where legitimate expectations were raised that the Council would not withdraw from negotiations without giving the Applicant an opportunity of stating its case why the Council should not do so. It is a somewhat slender point.
In Kioa v. West (1985) 159 CLR 550, 584 Mason J said -
"The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention."
The "legitimate expectations" area is often difficult to define and the present case is no exception. In Century Metals v. Yeomans (1989) 100 ALR 383 an applicant successfully challenged a minister's decision adopting recommendations which caused the applicant to fail to obtain a contract. However the legitimate expectations that were upheld in that case arose from the specific promise of the minister that an independent inquiry would be held before any decision was made in connection with the relevant plans and the recommencement of mining.
"This is a case in which, although there was no statutory requirement that the liquidator or the Minster proceed by way of an independent impartial and thorough inquiry, the doctrine of procedural fairness entitles the appellant to hold the Minister to his promise that this procedure would be followed."
(ibid p 412)
It is therefore to be distinguished from the present case.
There are two decisions of justices sitting alone holding that, in the circumstances of those cases, a tenderer was not entitled to expect or require so-called procedural fairness in the making of the relevant decision by the governmental agency. In White Industries Ltd v. The Electricity Commission of New South Wales (No. 25212 of 1987, unreported, Yeldham J, 20 May 1987) a tenderer for the supply of coal was placed on a short-list of four companies and talks ensued to clarify their offers and place them on a common basis for the purposes of comparison. The Electricity Commission accepted the recommendation of one of its officers to accept the offer of Costain, with whom the Commission had formerly had a contract. The plaintiff claimed that the commission had denied it natural justice in that it failed to afford it an opportunity to be heard "in relation to its decision to abandon the basis of the invitation to tender and to increase the amount of coal to be supplied". It was submitted that the plaintiff had a legitimate expectation that the commission would adhere to the conditions of tender or alternatively not depart from them without notice. Yeldham J rejected the submission, observing
"In my opinion the plaintiff, in the position of a tenderer, was not entitled to expect or require that the principles of natural justice . . should be observed in relation to it. I regard the nature of the power to contract by the acceptance of any one of a number of tenders to be inconsistent with an obligation to observe the principles of natural justice. A potential 'right' to gain a beneficial contract is not subject to the rules of natural justice."
A similar approach was made in Cord Holdings Ltd v. Burke & Ors . In that case an attack was made upon the minister's decision to select a particular company as the one with which the minister should negotiate and contract in relation to a proposed casino. The plaintiff and other interested companies had been invited to submit proposals. The plaintiff had done so and had also attended a cabinet sub-committee on invitation to make oral submissions. It was submitted that in the circumstances the cabinet sub-committee and cabinet had a duty to act fairly and to give the plaintiff and other interested parties an adequate opportunity of being heard before making its decision. The point was raised on demurrer whether the circumstances pleaded in the statement of claim required the rules of natural justice to be observed in relation to such decisions. Smith J, appropriately in my respectful view, examined the subject matter of the power being exercised by the government, and also the nature of the interest of the plaintiff "as the complainant of injustice in that subject matter".
The power in issue was the selection of the company which was to construct and establish the casino. The plaintiff had expended some money by being in the contest, but it had no special right to be selected as the developer. It was submitted that the legitimate commercial expectation of the plaintiff was derived from its position as a member of the particular class of tenderers, and from its dealings with the cabinet sub-committee. Reference was made to McInnes v. Onslow Fane [1978] 3 All E.R. 211, where Megarry VC spoke of the "expectation cases".
". . there is an intermediate category, which may be called the expectation cases, which differ from the application cases only in that the applicant has some legitimate expectation from what has already happened that his application will be granted. This head includes cases where an existing licence-holder applies for a renewal of his licence, or a person already elected or appointed to some position seeks confirmation from some confirming authority."
In Cord's case Smith J considered that the decisions amounted merely to a refusal to grant to the plaintiff a privilege, and observed that nothing was taken from the plaintiff. The plaintiff could not legitimately expect that any proposal submitted in response to invitations extended to it would not be rejected out of hand. He accordingly concluded that this was not a situation in which he plaintiff could set aside the decisions on the ground that it had not been given a further hearing.
The term "legitimate expectation" has been considered by the High Court in Heatley v. Tasmanian Racing and Gaming Commission (1977) 137 CLR 487, FAI Insurances Ltd v. Winneke (1981-1982) 151 CLR 342, 370, Salemi v. McKellar No. 2 (1976-1977) 137 CLR 398, and in Kioa above, to mention only a few. The scope of the term is, I think, deliberately left wide so that courts may intervene in appropriate cases, but not so wide as to unnecessarily inhibit ordinary reasonable activities by governments and by statutory authorities. It seems to me that the authority's right to reject is an essential part of the process of tendering, and that every tenderer knows this. Section 404(3) expressly confers such a power. Also virtually every tender involves the tenderer in a degree of expense, and in the usual course such expenses are something that the tenderer must be prepared to forgo. That is not to say that tenderers are not entitled to fair play, but the rules of the game are fairly basic ones. From the tenderer's point of view it is something of a gamble and the tenderer is looking for a valuable benefit. Even conduct raising the tenderer's hopes will not necessarily deprive an authority of the right of summary rejection.
In the present case the Council, although not obliged to do so, kept negotiations alive until 30 April. There was no promise that even if the applicant provided evidence of financial backing by that date the Council would grant a contract to it. It was the grant of an opportunity to overcome one particular stumbling block. Even so, the production of such evidence is not necessarily an easy or cost-free process, and in my view the limits of any arguable case of legitimate expectation are that the Council would take that factor into account before any final cessation of negotiations.
The arguable component of the Applicant's case is in my view as narrow as this.
Relevant considerations
If the decision was taken without awareness of the fact that the Applicant had obtained finance within the extended time granted to it by the Council's solicitors, there would be a serious question to be tried whether the Applicant had been deprived of natural justice in the making of that decision. One suspects that far more obvious and powerful reasons than doubts about the Applicant's financial capacity have in fact led to the decision, but the evidence does not yet show what the operative factors that led to the decision were.
Futility
Counsel for the Council submitted that at most the only effect of an order setting aside the decision would be to force the Council to renegotiate. In the circumstances it may be of minimal practical effect or value, but it is not, and should not be regarded as an empty right. The exercise, if it had to be redone, would have to be done in good faith.
Statement of Reasons
In general a person who is entitled to challenge a decision to which the Act applies is entitled to request the decision-maker to give reasons for the decision provided the request is made within twenty-eight days (ss.30-33). However Schedule 2 sets out various types of decision for which reasons need not be given. Item 13 in that Schedule states -
"Decisions relating to -
(a) the selection of a tenderer following the conduct of a competitive tendering process; and
(b) the awarding of contracts"
In my view this has general application to the scheme for selection of tenderers and the awarding of contracts under the Local Government Act. I consider that both of the decisions which the Applicant desires to challenge "relate to" the selection of a tenderer following the conduct of a competitive tendering process, and also that they relate to the awarding of contracts. I cannot see that either party would be advantaged at this stage by the production of retrospective reasons. However I base my decision upon the exemption contained in Schedule 2.
Balance of Convenience
There will be considerable inconvenience to the Council in staying the decision to proceed with the altered project. Tenders have already been called, and they closed on 1 July. There is a serious deficiency of parking facilities in the city of Cairns, especially since the Casino project deprived the city of 140 on-street bays. The project has already been delayed by the unsuccessful negotiations which dragged on with the Applicant and it may fairly be described as an urgent municipal project. Further, the Council may possibly lose the benefit of the tenders for the current project if it is delayed for a substantial period from appraising them. However if the Council were to accept a tender before determination of the Applicant's right to insist on further opportunity for negotiation of the first tender, this would either defeat whatever right the Applicant has to assert or result in the payment of extensive damages by the Council at the suit of the new tenderer.
What is the right which the applicant asserts, and what will it lose if it is deprived of it? It will simply lose the opportunity of making a submission to an apparently reluctant Council which has already shown a desire to pursue what could well be a more attractive way of handling its car-parking obligations. A right to negotiate may sometimes be a valuable option, but in the present circumstances it is difficult to so regard it. It seems to be more an instrument of delay by a disappointed party. The value of the right to further negotiations must be seen in the context of the Council's wide power under s.404(3), and in the context of a case in which bad faith has not been alleged.
The Applicant has offered an undertaking as to damages. The Council objects that there is no evidence that the Applicant has the ability to pay any damages which may ultimately be awarded against it. There is evidence that the Applicant runs a very substantial business, but no evidence of the actual financial situation of the Applicant. The onus of placing evidence before the Court as to financial sufficiency rests upon the Applicant (Startune Pty Ltd v. Ultratune Systems Australia Pty Ltd [1991] 1 Qd. R. 192, 199); Yalgan Investments Pty Ltd v. Albert Shire Council (Mackenzie J, 13 October 1994, unreported)).
The issue of balance of convenience, I think, strongly favours the Council. That is to say, the Council will be more severely damaged and inconvenienced by a stay that holds back the car parking project pending the determination of the claim than the Applicant would be by refusing a stay. However a difficulty is raised by the fact that refusal of a stay would almost certainly defeat the very right that the Applicant asserts. That is not necessarily fatal to the position of a respondent on this issue provided that it is a right that could fairly be compensated by a money payment (Cf. Castlemaine Tooheys Ltd v. South Australia (1986) 161 CLR 148, 153; Minister for Immigration v. Msilanga (1992) 34 FCR 169, 182-183; Faingold v. Zammit (1984) 1 FCR 87; and Meagher Gummow and Lehane, Equity: Doctrines and Remedies, 3rd edn. para 2174). If it can be converted to a right to damages the balancing exercise is relatively easy. However the applicant does not have a cause of action of which I am aware for breach of which damages could be assessed. The only way in which the loss of the right could be brought to account would be through the court obtaining an undertaking from the Council to pay such damages as a court might assess the applicant to be entitled to by reason of the Applicant's loss of the right to negotiate if it were to be decided in due course that the Applicant was entitled to an order requiring the decisions to be set aside.
Application to dismiss or stay (s.48)
I have endeavoured to balance the countervailing factors and to decide whether it is in the interests of justice that the somewhat insubstantial claim of the Applicant be permitted to delay the parties for an appreciable time in circumstance where the public will be adversely affected by delay, where the Council's damage from staying its present course of action would be substantial, and where the Applicant's undertaking as to damages is not properly established as a substantial one. If the evidence remained as it now is, I would dismiss the application to review. I have reached the view that it would be "inappropriate" (within the meaning of that word in s.48(1)(a)) for the Applicant's proceedings in relation to this application to be continued, but only provided that the respondent Council is prepared to undertake to pay damages in the terms mentioned above.
This will not necessarily reduce the issues that might have to be determined by the court in due course, because the hypothetical right of the Applicant to have succeeded in these proceedings will be a necessary element of any damages claim that the Applicant might elect to pursue. The prospect of further litigation over what on any view seems to be a right of small value may however be less attractive than litigation that embarrasses a respondent by delaying the progress of an important project. There is also the advantage of an offer being able to be made under RSC Order 26.
If the suggested undertaking is forthcoming, I shall stay these proceedings and permit them to be converted into a claim for damages pursuant to the undertaking, upon which the present material may be used. I acknowledge that this exercise of discretion in effect converts something that is in the nature of a personal remedy into a potential right in damages. I am not aware of any precedent for such an order in administrative law, but see no reason in logic why this may not be an available option in an appropriate case. (Castlemaine Tooheys Ltd v. South Australia, above p.153) The tests applicable in motions for interlocutory injunctions have been found appropriate for the determination of proceedings of the present kind and there is no reason why familiar techniques should not be used (Faingold v. Zammit above; Meagher Gummow and Lehane, Equity: Doctrines and Remedies, above, para 2174), though it may be that the occasions when it will be appropriate to withhold a specific remedy in this way will be rare.
The respondent may prefer not to give the above undertaking. In that event I will grant the stay sought by the Applicant and the application will proceed in the usual way.
The formal order will be made after receiving further submissions, including if thought fit submissions on the question whether the respondent should be given the opportunity to offer the undertakings I have suggested.
On 1 August 1996 after hearing further submissions the following orders were made.
On the undertaking of the Respondent Council to pay such damages as the Court might assess that the Applicant is entitled to receive by reason of its alleged right to negotiate with the Council concerning tender no. 33/95 for the design, construction and operation of a multistorey carpark in Hartley and Grafton Streets, Cairns, in the event that it is decided by the Court hearing this matter that the Applicant is entitled to an order setting aside the Council's decisions of 7 May 1996 that are challenged by the Applicant in its application for statutory order of review, order that
the application for statutory order of review is stayed;
the Applicant's application to stay further action by the Council in furtherance of its decisions is dismissed;
the application for provision by the Council of a statement of reasons is dismissed;
the costs of the application to stay further action by the Council in furtherance of its decisions are to be Respondent's costs in the cause, and there will be no order with respect to the Applicant's costs;
the costs of and incidental to all other applications are reserved;
by consent the following directions for the further conduct of proceedings with respect to the enforcement of the Respondent's undertaking as to damages:
(a) The Applicant deliver its points of claim on or before 15 August 1996;
(b) The Respondent deliver its points of defence on or before 29 August 1996;
(c) Disclosure be completed by each party by 13 September 1996;
(d) Inspection be completed by each party by 20 September 1996;
(e) The Applicant file and serve any further affidavits upon which it intends to rely by 4 October 1996;
(f) The Respondent file and serve its further affidavits by 18 October 1996;
(g) The Applicant file and serve any affidavits in reply by 25 October 1996;
(h) Matter be placed on the callover list with priority upon filing certificate of readiness;
There be liberty to apply on two days' notice in writing.
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