Kingscape Holdings Pty Ltd v Shire of Capel
[2003] WASC 200
KINGSCAPE HOLDINGS PTY LTD -v- SHIRE OF CAPEL & ORS [2003] WASC 200
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 200 | |
| Case No: | CIV:1796/2002 | 17 JULY 2003 | |
| Coram: | ROBERTS-SMITH J | 24/10/03 | |
| 26 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | KINGSCAPE HOLDINGS PTY LTD (ACN 077 984 662) SHIRE OF CAPEL SHIRE OF DARDANUP SHIRE OF HARVEY |
Catchwords: | Prerogative writs Order nisi for certiorari Local government Contract Tenders for collection and disposal of rubbish Evaluation of tenders by external consultants Exclusion of applicant's tender on ground it was a nonconforming tender Whether local authority decision to award contract to successful tenderer valid Whether successful tender should have been excluded as nonconforming Delay in making application Discretion |
Legislation: | Nil |
Case References: | Ansell v Wells (1982) 63 FLR 127 Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 3 All ER 25 Highway Hotel Pty Ltd v City of Bunbury [2001] WASCA 385 Inland Revenue Commissioners v National Federation of Self-employed and Small Businesses Ltd [1982] AC 617 Macquarie Generation v CNA Resources Ltd [2001] NSWSC 1040 Re Capobianco; Ex parte Castelli, unreported; SCt of WA; Library No 980567; 25 September 1998 Re Matthews; Ex parte Mackenzie [2000] WASC 147 Re Monger; Ex parte United Construction Pty Ltd [2002] WASCA 253 Re Monger; Ex parte Western Power Corporation [2000] WASC 271 Re Monger; Ex parte WMC Resources Ltd [2002] WASCA 129 Re Smith; Ex parte Rundle (1991) 5 WAR 295 Savage v Teck Exploration Ltd, unreported; FCt SCt of WA; Library No 7285; 16 September 1988 Talbot v Lane (1994) 14 WAR 120 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
SHIRE OF CAPEL
First Respondent
SHIRE OF DARDANUP
Second Respondent
SHIRE OF HARVEY
Third Respondent
Catchwords:
Prerogative writs - Order nisi for certiorari - Local government - Contract - Tenders for collection and disposal of rubbish - Evaluation of tenders by external consultants - Exclusion of applicant's tender on ground it was a nonconforming tender - Whether local authority decision to award contract to successful tenderer valid - Whether successful tender should have been excluded as nonconforming - Delay in making application - Discretion
(Page 2)
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
Applicant : Mr J A Chaney SC & Mr G J Dunne
First Respondent : Mr J C W Skinner
Second Respondent : Mr J C W Skinner
Third Respondent : Mr J C W Skinner
Solicitors:
Applicant : Slee Anderson & Pidgeon
First Respondent : McLeod & Co
Second Respondent : McLeod & Co
Third Respondent : McLeod & Co
Case(s) referred to in judgment(s):
Ansell v Wells (1982) 63 FLR 127
Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 3 All ER 25
Highway Hotel Pty Ltd v City of Bunbury [2001] WASCA 385
Inland Revenue Commissioners v National Federation of Self-employed and Small Businesses Ltd [1982] AC 617
Macquarie Generation v CNA Resources Ltd [2001] NSWSC 1040
Re Capobianco; Ex parte Castelli, unreported; SCt of WA; Library No 980567; 25 September 1998
Re Matthews; Ex parte Mackenzie [2000] WASC 147
Re Monger; Ex parte United Construction Pty Ltd [2002] WASCA 253
Re Monger; Ex parte Western Power Corporation [2000] WASC 271
Re Monger; Ex parte WMC Resources Ltd [2002] WASCA 129
(Page 3)
Re Smith; Ex parte Rundle (1991) 5 WAR 295
Savage v Teck Exploration Ltd, unreported; FCt SCt of WA; Library No 7285; 16 September 1988
Talbot v Lane (1994) 14 WAR 120
Case(s) also cited:
Nil
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1 ROBERTS-SMITH J: The respondents are the Shires of Capel, Dardanup and Harvey ("the Shires").
2 One of their important local government responsibilities is the collection and disposal of domestic and commercial rubbish.
3 In late 1991 the Shires decided to jointly go to tender ("the combined tender") for an exclusive contract to provide them with domestic waste collection services for a period of 10 years from 1 July 2002.
4 During January and February 2002 each of the Shire Councils resolved to accept a tender from Cleanaway, a subsidiary of Brambles Australia Ltd. The contract was accordingly awarded to Cleanaway. The applicant ("Kingscape") had previously provided waste collection and disposal services to the Shires, and had been a tenderer for the combined tender.
5 On 12 June 2002 Kingscape filed an application by notice of originating motion for writs of certiorari and declaration.
6 The application came before Barker J on 17 September 2002 and was adjourned to 18 September. On that date Barker J made consent orders for discovery of documents subject to certain restrictive conditions and otherwise adjourned the application sine die. It eventually came on for hearing before me on 17 July 2003.
7 As amended at the hearing, the notice of motion seeks orders nisi returnable before the Full Court calling upon the respondent to show cause why a writ of certiorari should not be issued removing into the Full Court and quashing resolutions of the first, second and third respondent dated 16 January, 13 February and 23 January respectively, whereby the respondents resolved to award the combined tender to Cleanaway and why the resolutions should not be declared null and void (the resolution by the Harvey Shire Council awarding the tender to Cleanaway appears to have been passed on 15 January, not 23 January 2002, as stated in the notice of motion - see the affidavit of Jimmie Mike Tolmachoff filed 1 August 2002, p 300 - but nothing presently turns on that).
8 The grounds of the application are that:
"1. The Applicant, Kingscape Holdings Pty Ltd, trading as South West Waste, was the Contractor under a previous
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- tender for the subject matter of the Tender and submitted a tender and an alternative to the Tender.
- 2. Cleanaway submitted a tender and an alternative tender (sic: to) the Tender.
3. Sinclair Knight Merz ('SKM'), a firm of consultants, evaluated all tenders on behalf of the Respondents.
4. SKM excluded the alternative tender of the Applicant from evaluation on the basis that it did not conform to the Tender.
5. SKM evaluated the alternative tender of Cleanaway on the basis that it met the 'intent of the specification' and recommended that Cleanaway's alternative tender be awarded to the Tender (sic).
6. The Tender document provided in clause 17.1 that:
The Contractor is the owner of all waste Containers at Tenements from which the Contractor is required to collect waste.
7. The Cleanaway alternative tender provided that waste Containers would be leased by Cleanaway.
8. By the Resolutions, the Respondents accepted the recommendation of SKM and awarded the Tender to Cleanaway for its alternative tender.
9. The Resolutions are ultra vires and void because:
(a) the alternative tender of Cleanaway did not comply with the Tender conditions and could not be awarded the Tender;
(b) the Respondents improperly delegated to SKM the determination of whether to accept or reject the Applicant's tender;
(c) the alternative tender of the Applicant should not have been excluded from evaluation because, by clause 25.2 of the Tender document, it was a conforming tender.
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9 The application was supported by the affidavit of Jimmie Mike Tolmachoff sworn 26 July 2002, but not filed until 1 August that year. He is a director of Kingscape Holdings. There are two directors of that company. The other is his wife. Each of them own one fully paid share.
10 Mr Tolmachoff and his wife emigrated from the United States to Australia with their two children in 1964. He and his brother started a small scrap business in 1967 near Bunbury. In 1982 they started a business called "J & P Waste" which serviced mainly industrial sites. In 1983 they purchased a waste business from Mr Mike Bolderoff, including an assignment of a contract with the Shire of Dardanup ("Dardanup Shire") to pick up domestic waste in bags throughout the Shire.
11 In 1984 they purchased from the Calvary Church a swill collection business for the City of Bunbury. With that purchase came approximately 120 240 litre mobile green bins ("MGB") and a truck. Other waste collection businesses acquired by them over subsequent years expanded the scope of their operations and added significant plant and equipment.
12 These acquisitions were made by the Tolmachoff brothers through their company South West Waste Disposals Pty Ltd ("SWWD") as trustee for the J & P Metals Unit Trust ("the Trust"). SWWD operated under the business name "South West Waste".
13 Kingscape was incorporated on 24 March 1994 to, amongst other things, assume the trusteeship of the Trust.
14 Up to 30 June 2002, Mr Tolmachoff's various family business entities had been long-term and exclusive providers of domestic waste collection and disposal services to the Shires.
15 In November 1999 Dardanup Shire confirmed the award to Kingscape of the tender for kerbside collection of domestic waste for 2-1/2 years commencing on 1 January 2000 and expiring on 31 June 2002.
16 In 1991 Kingscape entered into a contract with the Shire of Capel ("Capel Shire") to provide domestic waste removal from premises within the townsites of Capel, Boyanup and Gelorup on an exclusive basis for 10 years from 1 July 1989. That contract did not require the provision of MGBs. According to Mr Tolmachoff's affidavit, in 1991 Capel Shire wished to introduce the use of MGBs and so
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- notwithstanding the Capel contract still had 8 years to run, put its domestic waste collection requirements out to tender. SWWD was the only and successful tenderer. It purchased approximately 900 MGBs at a cost of approximately $60,000 for that purpose.
17 The Capel contract contained an option to renew for 5 years after the first 5 year term. That option was exercised. It was agreed to by Capel Shire on 2 November 1995.
18 By letter dated 26 May 2000 to Kingscape, Capel Shire advised that it had decided to call for tenders later in the year 2000 for a 12 month period to end 30 June 2002 for the provision of a domestic refuse service using 240 litre MGBs. The letter advised that:
"This … will bring this council in line with the Shires of Dardanup and Harvey whose contract expires in June 2002. The aim is to advertise for a joint tender for the domestic refuse pickup for the three local governments, which would be of financial benefit to both the local governments and the contractor."
19 Mr Tolmachoff deposes to his belief that as far back as May 2000 the Shires had resolved to use Kingscape's services until a common end date of 30 June 2002, which had required Kingscape's cooperation in agreeing to various short term contracts with the several Shires. He observes that if Kingscape had chosen not to be cooperative with the Shires, those requested short term extensions could have been refused and so prevented the creation of a contract opportunity large enough to interest Cleanaway.
20 Kingscape tendered for, and was awarded the 12 month contract with Capel Shire to 30 June 2002.
21 Mr Tolmachoff's family business had provided domestic waste collection services to the Shire of Harvey ("Harvey Shire") since 1987. In 1989 that was extended to dwelling houses, commercial and other premises.
22 The contractual arrangement obliged SWWD to supply and deliver to all premises, approved new 240 litre MGBs as required, and to maintain or replace such bins as necessary. In accordance with this requirement, at the commencement of the Harvey contract, SWWD purchased approximately 4,500 MGBs at a cost of approximately $340,000. Those MGBs also had to be replaced progressively at
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- SWWD's expense as they wore out or were destroyed, lost or stolen and had to be added to as new residences were constructed.
23 There were various extensions of the Harvey contract. The final extension contract for domestic waste removal between Harvey Shire and Kingscape was for a term of 3 years to end 30 June 2002.
24 By letter dated 30 September 1999, Harvey Shire advised Kingscape that at the conclusion of the extended contract, calling of tenders for rubbish removal from residences "may be called on a South West regional basis".
25 Combined tender No 1 was advertised in September 2001.
26 In his affidavit, Mr Tolmachoff states that his estimate of the then present value of plant and equipment used as at 30 June 2002 in the performance of the Shires' domestic waste collection contracts comprised three side-loader trucks, one rear loader (back-up), 12,500 bins (including street bins) and computer and accounts infrastructure with a value of $1,137,500.
27 Tenders closed on 30 November 2001.
28 Kingscape submitted a conforming tender and another tender which did not conform in that it proposed that rather than new MGBs being provided (as required by cl 17.1 of the conditions of tender) the MGBs which Kingscape was currently using in each of the three Shires continue to be used.
29 Under the contractual obligations with each of the three Shires which expired on 30 June 2002, Kingscape was obliged to replace and repair MGBs as they became unserviceable. The age of MGBs owned by Kingscape varied from near new to those approaching the end of their serviceable life.
30 Mr Tolmachoff asserts that if Kingscape's conforming tender for the combined tender (which proposed the provision of new bins) had been accepted then Kingscape would have to have purchased 12,500 new MGBs at a cost to Kingscape of $812,500, in addition to which the collection of the old MGBs would cost Kingscape $90,000. Kingscape would not have had any way of setting off against that cost, the cost to it of the redundancy of the MGBs used in the performance of the contracts with the Shires which expired on 30 June 2002.
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31 The firm Sinclair Knight Merz Pty Ltd ("SKM") was appointed by the Shires to evaluate the tenders and report to them with appropriate recommendations. Their evaluation report was dated 21 December 2001.
32 Six conforming tenders had been received by 30 November 2001. they included Cleanaway and Kingscape. Alternative tenders were received from three tenderers, two of which were Cleanaway and Kingscape. SKM noted the Cleanaway alternative tender proposed Cleanaway leasing MGBs instead of purchasing them. The firm said that met the intent of the specification and was considered in the evaluation. However, Kingscape's alternative tender to supply existing used bins and trucks was not considered further in the evaluation.
33 Kingscape's tender was ranked fifth out of six. SKM recommended the combined tender be awarded to Cleanaway for its alternative tender, that based on a principal and agency agreement for leasing the bins. Under that, the bins would not be owned by the Shires and Cleanaway would be responsible for the maintenance and replacement of bins in accordance with the contract.
34 In his affidavit Mr Tolmachoff asserts on a number of occasions that Kingscape was not informed by the Shires nor any of them of their intention to issue the tender and complains that no-one from the Shires consulted with Kingscape concerning the tender or its requirements prior to it being issued in November 2001.
35 However, in his affidavit filed on behalf of the respondents on 16 September 2002 Mr Colin Dent, the Principal Environmental Health Officer of Capel Shire, deposes to a meeting on 16 July 2001 between him and representatives of Harvey Shire and Dardanup Shire and others with Mr Doug Parrish the Chief Executive Officer of Kingscape to brief him about the Shires' intention to issue the tender and seek comments from Kingscape about the proposed requirements of it. He deposes that a similar meeting was held with Cleanaway representatives that day and one had been held earlier with another anticipated tenderer. Mr Dent deposes that Mr Parrish was informed of the Shires' intentions to issue the tender and of the various requirements proposed for it, specifically including that for new MGBs and new plant and equipment, rather than the continued use of existing MGBs and equipment. He states that Kingscape was invited to make comments in relation to the proposed requirements for the tender but no comments were received from Kingscape by any of the Shires.
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36 I take the law to be applied here as explained by Templeman J in Re Matthews; Ex parte Mackenzie [2000] WASC 147, in which his Honour endorsed the test articulated by Parker J in Re Capobianco; Ex parte Castelli, unreported; SCt of WA; Library No 980567; 25 September 1998. An applicant must only demonstrate an arguable case for the order nisi to issue. There is no necessity that the arguable case have some reasonable or real prospect of success (unless prerogative relief is sought in respect of quasi criminal proceedings). As Templeman J explained, this is in accord with the purpose of the order nisi procedure, that being to act as a filter to protect the Full Court against "busy-bodies with misguided or trivial complaints of administrative error …" per Lord Diplock in Inland Revenue Commissioners v National Federation of Self-employed and Small Businesses Ltd [1982] AC 617 at 642 - 643, adopted by the Full Court in Talbot v Lane (1994) 14 WAR 120, 152, 157; and see also Savage v Teck Exploration Ltd, unreported; FCt SCt of WA; Library No 7285; 16 September 1988.
37 The question whether the applicant had an alternative remedy by way of appeal under the Local Government Act 1995 (WA) was not canvassed before me. The availability of an alternative remedy may be an important consideration on an application for an order nisi for certiorari. It would normally be a factor calling for the discretionary refusal of the application. In light of the correspondence in evidence I assume that the applicant had no right of appeal. However, there having been no submissions put to me in that regard, I put that question aside.
38 The first ground of the application is that Cleanaway's alternative tender did not comply with the tender conditions and could not be accepted. It is said not to comply because it proposed that the bins be leased by Cleanaway (whereas cl 17.1 of the tender conditions required that the bins be owned by the contractor), that if the tender were accepted, the contract would have to be approved by the Brambles Board in London and further, there was a reservation of the right to adjust the price dependent on fuel costs.
39 The respondents contend that the intent of the condition was that the bins would not be owned by the Shires, but that in any event Cleanaway's tender in fact proposed that the bins be owned by Cleanaway - so that the tender was a conforming tender. It is further said that the conditions as to approval of the Board in London and the reservation with respect to fuel prices were satisfied or removed before
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- evaluation of the tenders was completed. The respondents contend that for these reasons the first ground is simply unarguable.
40 The respondents contend the second ground too is simply unarguable. They say the determination of whether to accept or reject the applicant's tender was never delegated to SKM. The applicant, on the other hand, admits that SKM's exclusion of the applicant's tender from the evaluation process was effectively a determination that it not be considered by the Shires.
41 The respondents submit that the third ground cannot succeed because the applicant's alternative tender was properly excluded from consideration. It was a non-conforming tender because it proposed used bins, whereas the tender condition called for new bins.
42 Finally the respondents rely upon the substantial delay, much of which they say is unexplained, combined with significant prejudice to the Shires and to Cleanaway were the order nisi to be granted now. It is argued that this is a case in which the delay and the prejudice occasioned by it are so great as to require the application to be refused in the exercise of discretion even at the order nisi stage.
The Cleanaway tender was non-conforming
43 The applicant advanced the proposition that the tender process contemplated the submission of tenders in a form such that they constituted offers capable of immediate acceptance. From that it was said that there could be no qualified tenders and nor could a tender be accepted subject to further negotiation of terms.
44 The conditions of tender were set out as an attachment to the Invitation to Tender to close on 30 November 2001. Under the heading "Tenders", cl (5) of the Invitation to Tender provided that late tenders would not be considered and cl (6) stipulated that "tenders shall comply with the conditions of tender".
45 The "Form of Tender" document contained a term that the tender and the offer it contained would remain open for acceptance by Council for a period of 90 days after the tender closing date and thereafter until the tenderer gave notice that it had been withdrawn.
46 The applicant's submission was that this was significant because it suggested that the submission of a tender carried with it a promise by the tenderer to keep the offer open and a corresponding promise by the Shire that it would consider conforming tenders and would not consider
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- tenders which did not comply. Mr Chaney SC referred to this as a "process contract". He relied upon Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 3 All ER 25 in which the English Court of Appeal held that in certain circumstances an invitation to tender could give rise to binding contractual obligations on the part of the inviter to consider tenders which conformed with the conditions of tender. In that case the way in which tenders had been solicited from selected parties in the particular circumstances gave rise to the implication that if an invitee submitted a conforming tender before the nominated deadline, it would be entitled as a matter of contractual right to have his tender opened and considered along with any other tenders that were considered.
47 Clause 17 of the conditions deals with waste containers. Clause 17.1 states that the contractor shall supply and deliver a new waste container to all tenements from which the contractor is required to collect waste. It provides further that the contractor is the owner of all such waste containers.
48 The Cleanaway tender is annexure "GJD1" to the affidavit of Gregory John Dunne sworn 11 July 2003. At par 4 under the heading "Assumptions, Clarification and Qualification to rates offered" it is noted that:
"The conforming rates tendered are based upon standard funding arrangements for financing the purchase of initial MGB stocks. Should Council prefer, Cleanaway has offered alternative rates, available under a Principal and Agents' leasing arrangement."
49 Paragraph 5 states that the tender is subject to approval by the Brambles Board of Directors. Paragraph 7 states that if successful as the preferred candidate from the tendering process, Cleanaway:
"… is willing to work under Councils' contractual conditions, subject to the normal Brambles commercial review process. The Brambles process reviews legal, taxation and insurance requirements. As such, Cleanaway may seek to clarify and to negotiate with Councils, certain minor assumptions ands (sic) interpretations within the tendered document prior to signing a formal contract agreement."
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50 Counsel for the applicant submits these qualifications in themselves rendered the tender non-conforming because it was not an offer capable of acceptance so as to constitute a contract.
51 Paragraph 10 under the same section stated that rates had been developed based on the prevailing fuel prices and that should they change materially, Cleanaway reserved the right to renegotiate them.
52 Paragraph 12 read:
"Should Council choose options involving the supply of new MGBs under the Principal and Agency agreement, it is proposed the Shires will enter into a financial leasing contractual arrangement for the initial supply of MGBs with Cleanaway, giving Cleanaway the right to assign this financing arrangement to a third party. This arrangement is subject to the Shires completing the necessary additional bin hire clause."
53 By letter dated 18 December 2001 Cleanaway advised:
• that the Board of Directors in London had approved the tender and that qualification therefore no longer applied. The Board would still be required to sign off on the contract document but local management in the region or in Perth would make all other decisions;
• it would agree to remove the fuel price qualification;
• under the Principal and Agency leasing arrangement, additional bin hiring clauses would be inserted into the contract. These would give Cleanaway the right to assign the financing of the bins to a third party. Cleanaway would own the bins and be the borrower.
54 There appears to have been some misunderstanding on the part of the applicant about what Cleanaway was actually proposing in respect of the bins. There is a suggestion that Mr Tolmachoff may have thought Cleanaway was proposing the Shires purchase the bins and lease them to Cleanaway.
55 In his submissions at the hearing, senior counsel for the applicant said that (t 22):
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- "What the respondents' affidavits establish is that ultimately the arrangement that was put in place was a lease by Cleanaway to the shires of the bin. So the shires paid a rental for the bin which was simply part of the total consideration which the shires paid for the services. That's how it all worked out in the end."
56 That is true as far as it goes.
57 Clause 17 of the contract eventually entered into by the Shires and Cleanaway differed in its terms from the corresponding clause in the conditions of tender. The former provided that the contractor or a nominated third party shall lease the MGBs to the Shires for the term of the contract at a nominated rental. But senior counsel for the applicant accepted that as the situation ultimately emerged in fact, Cleanaway elected to itself own the bins and lease them to the Council, even though the contract did not require that.
58 In substance, the applicant's position is that what was put in place was a contract different from that which was proposed in the tender and it simply was not open to the Shires to choose from the list of tenderers, a party with whom they subsequently entered into negotiations for and arrived at, an agreement different from that set out in the tender. Reliance was placed particularly upon reg 18(2) of the Local Government (Functions and General) Regulations 1996 ("the regulations"):
"(2) A tender that is submitted at a place, and within the time, specified in the invitation for tenders but that fails to comply with any other requirement specified in the invitation may be rejected without considering the merits of the tender."
59 Mr Chaney SC submitted that although that provision might suggest a discretion to reject, it must inevitably be displaced by the specific terms of the invitation to tender which emphatically required compliance with the tender conditions. Furthermore, the change to the condition requiring ownership of the bins, was not a "minor variation" otherwise permissible under reg 20 of the regulations. It was not a variation which the local authority wished to make but was an accommodation by the local authority of a variation sought to be made by the tenderer.
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60 Similar arguments were mounted in relation to the tender condition for approval by the Brambles Board, the reservation of the right to review conditions and the right to adjust prices in light of changes to fuel costs.
61 In substance, the applicant's submission was that it was not open to Cleanaway to submit what amounted to a conditional-counter offer as a tender: (see Macquarie Generation v CNA Resources Ltd [2001] NSWSC 1040.
62 Mr Chaney argued that it was not to the point that the requirement for the approval of the Brambles Board was met on 18 December 2001 nor that the reservation as to fuel prices was also withdrawn at that time - all that means, he said, was that the tender being evaluated was something different from what had been submitted in accordance with the invitation to tender.
63 Mr Skinner, counsel for the respondents, did not directly confront this submission, other than to argue first that Cleanaway's alternative tender did comply with the tender conditions by the time it was evaluated and alternatively, even if it did not comply originally, the necessary contractual variations effected were permitted under reg 20 of the regulations. He also contended that there is no requirement for a consequential contract to adhere strictly to a tender document. That last proposition, I would think, would always necessarily depend upon the tender conditions in the particular case as well as the terms of any applicable legislative provisions.
64 I express no view about these competing submissions. For present purposes it is sufficient to say that in my opinion this ground is arguable.
Whether improper delegation
65 On the face of it, the procedure involved here of appointing expert consultants to evaluate the tenders, to report to Council and to make recommendations in respect of them, does not involve any delegation of the decision or determination. The evaluation report was received by the Council officers in each instance, who considered it and made their own recommendations to their respective Councils, which then made the determination of the successful tenderer, by resolution.
66 What the applicant relies on here, however, is that the decision by SKM to exclude the applicant's alternative tender from evaluation, amounted for all practical purposes, to a decision or determination
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- rejecting it. That may be so, but that was a consequence of SKM taking the view the applicant's tender was a non-conforming tender. The invitation to tender expressly stipulated that tenders had to comply with the tender conditions. Legislative reinforcement for that is to be found in reg 18(2) of the regulations, to which I have already referred.
67 Whether or not a tender did comply with the conditions was a proper aspect of the evaluation. Like all other aspects, it was subject to review by Council officers and the Council. The assertion in this ground that the respondents improperly delegated to SKM the determination of whether to accept or reject the applicant's tender is simply not arguable in the way it is put. I would not grant the order nisi on this ground.
Applicant's alternative tender was a conforming tender
68 SKM excluded the applicant's alternative tender from evaluation because they regarded its proposal to use existing bins and trucks to be non-conforming. It did not comply with the requirement in cl 17.1 to supply new bins.
69 The applicant seeks to argue that notwithstanding cl 17.1, a proposal to use existing bins was within the scope of the conditions of tender because cl 25.2 provides that:
"Contractor must ensure that all the contractor's plant is new at the commencement date unless specified otherwise in the contractor's tender for this contract." (Emphasis added)
- and that MGBs are included within the tender definition of "plant".
70 In cl 2 "Definitions", "contractor's plant" is defined as meaning all or any of the collection vehicles, plant, implements, appliances and equipment used by the contractor for carrying out its obligations under the contract. Senior counsel for the applicant says that clearly includes bins.
71 The countervailing argument points out that "waste container" (the term used in cl 17) is separately defined and that in the context of cl 17 which expressly requires new bins, the general provisions of cl 25.2 cannot apply.
72 It is no doubt true that, as Mr Chaney submits, the applicant had very sound commercial reasons for proposing that existing bins be used. The applicant had been carrying on the business of waste disposal using such bins in the three Shires for some years. His affidavit refers to the
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- large number and cost of them. It is hardly surprising that a contract would contemplate a new operator supplying new bins, rather than being able to provide bins of varying age and condition. But where bins were already being used throughout the Shires subject to a pre-existing obligation to renew them as required, it would be sensible for the applicant to continue using the existing bins and provide new bins only where replacement was necessary or additional bins were required. That may be so, but in the end the issue must be resolved as a matter of contractual and statutory construction.
73 The prospect of the applicant succeeding on this ground may be doubtful, but reasonable prospect of success is not the test. This ground does meet the threshold test of being arguable.
Delay
74 The decisions made here by resolution of the Shire Councils are not:
"… a judgment, order, conviction or other proceeding of an inferior court or tribunal, or of a Magistrate or Justices …"
- within the meaning of O 56 r 11 of the Rules of the Supreme Court, which prescribes a time limit of 6 months for the making of an application for an order nisi for certiorari. That time limit accordingly does not apply in the present case (Re Monger; Ex parte WMC Resources Ltd [2002] WASCA 129 at [74], [91]; Re Monger; Ex parte United Construction Pty Ltd [2002] WASCA 253 at [2], [4], [29] and [49]. Nonetheless, I accept the respondent's submission that delay is still a factor going to the exercise of discretion.
75 As Malcolm CJ pointed out in Re Smith; Ex parte Rundle (1991) 5 WAR 295, the nature of the remedy of certiorari is such that the Court would require it to be sought promptly (at 319).
76 His Honour explained:
"The discretion to grant or refuse certiorari or prohibition in the exercise of discretion has been recognised in a number of cases in Australia: see, for example, Waterside Workers Federation of Australia v Gilchrist Watt & Sanderson Ltd (1924) 34 CLR 482 at 512; Ansell v Wells (1982) 63 FLR 127 at 155; R v Federal Court of Australia; Ex parte WA National Football League(1979) 143 CLR 190 at 216; and R v Brisbane City Council; Ex parte Read [1986] 2 Qd R 22, per
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- Thomas J. In Savage v Teck Explorations Ltd (unreported, Supreme Court, WA, Library No 7285, 16 September 1988) at 9 I acknowledged that:
'Where there has been inordinate delay it would clearly be appropriate to refuse an order nisi as occurred in this case. Relief should be refused when the court is satisfied that to grant the relief would cause substantial hardship to others or prejudice their rights.'
In that case the court was only concerned with private rights, no attempt was made to account for the delay, let alone seek an extension of time and it was held that the decision impugned was correct in any event."
77 Delay and the reasons for it are not to be considered in isolation (Highway Hotel Pty Ltd v City of Bunbury [2001] WASCA 385 per Templeman J at [58]). It is necessary also to have regard to the merits of the application weighed against the general public importance of the issue raised and the nature and degree of prejudice to other parties.
78 In Savage v Teck Explorations Ltd (supra) Malcolm CJ noted (at 9) that:
"Delay on the part of an applicant for certiorari is a substantive ground for the refusal of relief in the exercise of discretion: deSmith's, Judicial Review of Administrative Action(4th Edn) 579-580. Where there has been inordinate delay it would clearly be appropriate to refuse an order nisi as occurred in this case. Relief should be refused when the court is satisfied that to grant the relief would cause substantial hardship to others or prejudice their rights."
79 In that case the Full Court dismissed an appeal against an order by Brinsden J in chambers whereby his Honour dismissed the appellant's application for an order nisi on the ground of delay. The appeal had sought to have the Full Court set aside the order made by the primary Judge and to grant the order nisi.
80 In passing I also observe that the learned Chief Justice seemed to regard as significant the prospect that the ultimate result was likely to be the same were certiorari to issue and the impugned decision to be set aside. His Honour said (at 14):
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- "The likelihood that the ultimate decision may not be any different is 'a very important factor' in the exercise of discretion: R v Aston University Senate Exparte Rothy [1969] 2 Q.B. 538 per Donaldson J at 554. Although this remark was made in the context of proceedings for an order absolute it was proper for the learned Judge to take this point into account."
81 I think it not possible to say in this case what the likelihood would be of the tender being again awarded to Cleanaway were the impugned decisions to be quashed. That is because there was no evaluation of the applicant's tender. It was excluded from evaluation because it was regarded as non-conforming. Were the decisions to be quashed because the applicant's tender should have been evaluated, there is no way of knowing what the result of an evaluation which did include it, would be.
82 In Ansell v Wells (1982) 63 FLR 127, Lockhart J said (at 155):
"In the exercise of its discretion the Supreme Court refused to grant an order of certiorari because of the very large delay of the appellant. Mere delay generally will not debar a plaintiff from obtaining discretionary relief. … However, length of time may be evidence of assent or acquiescence; … Delay, coupled with prejudice to the defendant or a third party, may debar a plaintiff from discretionary relief."
83 That case was referred to by Wallwork J in Highway Hotel Pty Ltd v City of Bunbury (supra). That was an appeal from a decision of a single Judge dismissing an application for an order nisi for a writ of certiorari.
84 The primary Judge specifically found that the applicants had not "slept on their rights", that although some financial prejudice was likely to the respondents, that was difficult to quantify and did not appear to be substantial and there was arguable merit in the substantive application. However, her Honour dismissed the application because the explanation for the delay went only to explain part of it.
85 Wallwork J (with whom Templeman J and Einfeld AJ agreed) held that in light of her Honour's other findings, the lack of satisfactory explanation for part of the delay did not justify dismissing the application for the order nisi.
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86 The explanation for the delay in progressing this application was put forward in an affidavit of Peter Joseph Ray sworn 11 September 2002. He is a partner of the legal firm Slee Anderson & Pidgeon and has had the care and conduct of this matter on behalf of the applicant.
87 Harvey Shire resolved to accept the Cleanaway tender by resolution passed at its Council meeting on 15 January 2002. Capel Shire made a similar decision the following day.
88 Dardanup Shire deferred consideration of the matter from its meeting of 30 January 2002 (at which submissions were made in person by two representatives of the applicant) to its meeting on 13 February 2002. A resolution accepting the tender was passed at that meeting.
89 Slee Anderson & Pidgeon were first consulted by the applicant on 1 February 2002. As at that time the applicant was obliged to continue to perform domestic waste collection services for the Shires until 30 June 2002.
90 The solicitors wrote to Harvey Shire by letter dated 5 February 2002, a copy of which was sent to the other two Shires. The letter requested that Harvey Shire postpone its decision on the tenders and give due consideration to three issues, they being identified as relating to the Trade Practices Act 1974 (Cth), the purchase of bins and variation of the tender.
91 The trade practices point advanced was a contention that the agreement between the Shires resulting in the joint invitation to tender had the effect of hindering or preventing the applicant from supplying a rubbish collection service to any of the three Shires individually, which was a breach of the Trade Practices Act. That point was not subsequently pursued and I need not deal with it any further. The other two points concerned the requirement for new bins (as opposed to existing bins) and whether the contractor could lease bins rather than purchase them.
92 McLeods wrote to the applicant's solicitors by letter dated 7 February 2002 advising they were acting for the Shires. They wrote that they were providing advice to Harvey Shire prior to its next meeting and that apart from the matters relating to the Trade Practices Act their advice would cover the points raised on behalf of the applicant. So far as the reference to Pt 4 of the Trade Practices Act was concerned, they confirmed that when they had asked the applicant's solicitors on 6 February 2002 to identify which sections of that Act
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- were in question, they were informed that the applicant's solicitors had been instructed not to provide that information. In the circumstances, they said, it was not reasonable to expect the Shires to consider the alleged breaches.
93 McLeods further wrote to Slee Anderson & Pidgeon by letter dated 13 February 2002 advising that each of the Shires had circulated a copy of the applicant's solicitor letter dated 5 February 2002.
94 The next communication from the applicant's solicitors was a letter dated 13 March 2002 to McLeods. That letter advised in part:
"I confirm that this firm has instructions from Kingscape Holdings Pty Ltd to institute proceedings to, amongst other things, have the decision of the Councils to award the relevant Contract to Cleanaway set aside principally because of irregularities in the Tender process.
I am presently preparing the full brief to Counsel. It might be appropriate that my client's intentions be communicated to Cleanaway by your clients as presumably it will, if it has not already done so, shortly be ordering new plant and equipment."
95 By letter dated 18 March 2002, McLeods informed the applicant's solicitors that they were instructed to accept service of any proceedings.
96 Slee Anderson & Pidgeon next wrote to McLeods by letter dated 19 March 2002, which read in part:
"I confirm that I am presently preparing a brief to Counsel. Preliminary advice has been taken from John Woodhouse and a choice of senior Counsel made. The task of preparing the brief is, as you will no doubt appreciate, time consuming and complex having regard to the fact that we are dealing with the conduct of external consultants Sinclair Knight Mertz and three local authorities both at council and executive level. Without wishing to posture, my preliminary observation and the observation of John Woodhouse is that there appears to have been some not insignificant defects in the handling of the tender process by all of the above.
Despite what impression might have been given by my client in its approach to the issue to date, including its efforts to publicise its position, what you can be assured of is that
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- ourselves, with the assistance of Counsel with the appropriate expertise, will exhaust whatever legal avenues are available to our client and your clients should be so informed.
There are (sic) a multiplicity of issues which present commencing with the correct interpretation of the Invitation to Tender, the decision by SKM to not evaluate our client's alternate tender and the failure of the executives and Council to query SKM as to why our client's alternate tender was not evaluated other than to be dismissed out of hand because it referred to the use of existing 'gear' whilst Cleanaway's Alternate Tender which provided for some form of financing which was accurately described by anybody to anybody, a subject to board approval tender being evaluated after the tender closing date, mis-descriptions by SKM to the three Councils of the content of tenders, mis-description by Council officers to Councils of SKM's comprehensive evaluation of all tenders and the number of tenders received and CEO's informing Councils erroneously of the existence of a non-existent appeal right. The above serves as a representative sample of what I consider are issues for Counsel's advice. I am not aware of the extent to which you have been requested so far to review the details of the tender process and all the various communications between Sinclair Knight Mertz, prospective tenderers and tenderers and the local authorities however, unless I am gravely mistaken, I would be surprised if you do not have grave concerns about the validity of the process at the conclusion of such an investigation."
97 Mr Ray deposes that as at that date he had prepared a draft brief to counsel, Leslie A Stein, of considerable length. Mr Ray had a conference with counsel on 10 April 2002 at which he was given what he describes as "preliminary advice which resulted in the decision to issue proceedings". Counsel's written opinion was provided to the applicant's solicitors on 23 April 2002. There was some further communication between the solicitors and counsel about aspects of the opinion, culminating in written answers from counsel on 30 April 2002.
98 The next communication with McLeods was a letter from Slee Anderson & Pidgeon dated 28 May 2002. The applicant's solicitors advised that counsel's opinion was that there were grounds for quashing the decision awarding the tender to Cleanaway and that counsel was presently preparing the notice of motion for an order nisi against all
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- Shires and that the proceedings would be issued as soon as the papers were prepared. The letter went on to say that the applicant's position was that the tender should be recalled and any defects in the process avoided on recalling of the tenders.
99 Mr Ray deposes that as at 28 May counsel had prepared the draft outline of submissions in support of the motion and he provided counsel with his suggested editing comments on 5 June 2002.
100 McLeods wrote to Slee Anderson & Pidgeon by letter dated 5 June 2002 confirming that they still acted for the Shires and were still instructed to accept service. They wrote that the content of the letter from Slee Anderson & Pidgeon dated 28 May 2002 had been forwarded to the Shires and noted. They confirmed that that letter had been the only contact McLeods had had from the applicant's solicitors and the only contact of any sort with them or the Shires regarding the possibility of legal proceedings since the letter from the applicant's solicitors dated 19 March 2002. They advised that during that time, and as the applicant was well aware, the Shires had been progressing the new arrangements with Cleanaway and winding up the existing arrangements with the applicant. They concluded that in the circumstances they were instructed that none of the Shires proposed to recall the tender in response to the applicant's position.
101 The notice of motion was filed on 12 June 2002.
102 By letter dated 20 June 2002, Mr Ray wrote to McLeods in the following terms:
"My letter of 19 March 2002 made it plain that the time-consuming and complex task of briefing senior Counsel had begun and you were assured that with the assistance of senior Counsel, whatever legal avenues available to our client would be exhausted and we told you to so inform your client.
I take it you did that.
I note I have had no communication from you in reply to my letter of 19 March 2002.
In particular, at no stage have you enquired as to whether or not my client had decided to abandon taking proceedings nor have you queried what progress was being made towards them being taken. If, in the light of the clear statement of intention made to you in my letter of 19 March 2002, you or
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- your clients have assumed, that because they have not heard from us again until 28 May 2002, that my client had abandoned its proposal to issue proceedings then that was a dangerous assumption to make."
103 In Re Monger; Ex parte Western Power Corporation [2000] WASC 271, Owen J held that for the purposes of O 56 r 11, the jurisdiction of the Court is enlivened once the originating process is filed, notwithstanding that was done without a supporting affidavit. The failure to file a supporting affidavit at the same time is a procedural defect in that it is a failure to comply with O 56 r 1(1), but does not go to jurisdiction. It is therefore the date of filing of the originating process which is to be seen as the operative date from which to assess whether or not an application is made within time (ibid [23]). With respect, I agree with that conclusion. It follows that in this case the application was instituted on 12 June 2002, notwithstanding the affidavit in support was not filed until 1 August 2002.
104 So far as prejudice is concerned, by his affidavits sworn 16 September 2002 and 16 July 2003, Peter Gregory O'Sullivan deposes that since being awarded the tender and entering into contracts with each of the Shires, Cleanaway has purchased the bins required in order to carry out the services the subject of the tender and the contracts, including approximately 12,000 MGBs. Cleanaway has incurred expenditure of more that $1.3 million, including the purchase of new MGBs and other types of waste containers, purchase of vehicles and other equipment, costs associated with the delivery of the new MGBs and other waste containers and the setting up of the physical and administrative infrastructure required in order to carry out the services the subject of the tender and contracts.
105 As Mr Skinner points out, the applicant instructed solicitors on 1 February 2002, after Capel Shire and Harvey Shire had resolved to accept the Cleanaway tender, but some two weeks before Dardanup Shire did so. Acceptance was conditional on resolution of all three Shires. Mr Ray's affidavit shows the applicant had decided to commence proceedings by 13 March 2002, but that was not done until 12 June. There was no communication to the Shires' solicitors between the Slee Anderson & Pidgeon letter dated 19 March 2002 advising they were briefing counsel, until their letter dated 28 May 2002 indicating that advice had been received from counsel and requesting that the Shires recall the tenders. There was no explanation for the delay between receipt of counsel's written advice on 30 April 2002 and the solicitors' letter dated 28 May 2002.
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106 The period between 19 March and 28 May was increasingly critical, because the Shires were obliged to continue with their existing rubbish collection contracts with the applicant until 30 June and also put in place arrangements to follow after that date.
107 Mr Skinner submits that rubbish collection is an essential local authority function and the respondents were obliged to maintain that service across the three Shires after 30 June 2002. In the absence of the institution of proceedings and any offer by the applicant to carry on the service in the interim, the respondent had no real choice but to continue in accordance with the outcome of the tender process. He submits that in that circumstance there was an obligation on the applicant to institute the proceedings immediately it had made the decision to do so in February and, indeed, to seek interlocutory relief. He points out that the grounds upon which the application for the order nisi is made are the same of those which were raised in the letter from the applicant's solicitors in February.
108 The contract with Cleanaway has been on foot since 30 June 2002. Action to maintain this essential local government services was imperative. In the absence of legal proceedings to challenge the validity of the decision to award the contract to it, Cleanaway was entitled to rely upon its validity, as were the respondents. Cleanaway has already incurred very substantial set-up costs including the purchase of MGBs, and continues to incur expense in the performance of the contract. Cleanaway would potentially suffer very substantial financial loss were the contract now to be set aside.
109 These considerations carry significant weight.
110 As against those, in light of the correspondence from the applicant's solicitors, it could not be said that the delay in instituting proceedings evidenced any assent or acquiescence by the applicant to the decision of the Shires to award the contract to Cleanaway and notice of an intent to issue proceedings was given as early as 19 March 2002.
111 Nonetheless, there was a delay of 4 months between the date of the final decision on 13 February 2002 and the filing of the notice of motion. The explanation for the delay is not satisfactory. There is no reason why the proceedings could not have been instituted between 19 March and (at least shortly after) 10 April 2002 at the latest - the decision to do so was apparently made by 13 March. Had proceedings been instituted even by mid-April the respondents and Cleanaway
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- would have known with certainty one and a half months before the contract commencement date, that the decisions were under challenge.
112 The grounds upon which the application is made are essentially those identified by the applicant's solicitors in mid-March 2002.
113 I have come to the conclusion that the 4 month delay in the institution of the proceedings, coupled with the almost impossible position of the respondents in the circumstances confronted only with the threat of litigation and the very substantial prejudice to Cleanaway, are such as to debar the applicant from the issue of an order nisi for certiorari in discretion and I would so order.
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