R P Data v Brisbane City Council
[1995] QSC 97
•30 May 1995
IN THE SUPREME COURT
OF QUEENSLAND
No. 0263 of 1995
[R P Data v. Brisbane City Council & Anor]
BETWEEN:
R P DATA PTY LTD
Applicant
AND:
BRISBANE CITY COUNCIL
First Respondent
AND:
INFOPAC INTERNATIONAL PTY LTD
Second Respondent
JUDGMENT - DERRINGTON J.
Delivered:30 May 1995
CATCHWORDS: Judicial Review - City Council enterprise - Sale of information to computer-data broker - Contract exclusive for one year only then renewable yearly - Council obliged to be of opinion that arrangement of benefit to area - Whether possible to be of opinion if not seek highest bid from competing brokers - Local Government Act sections - Judicial Review Act.
Counsel:P.J. Davis for the applicant
R.W. Gotterson QC and M. Hinson for the first respondent
P.O. McMurdo QC and J.B. Sweeney for the second respondent
Solicitors:Paul Crowley for the applicant
Robyn Chapman for the first respondent
Dillons T/A for Bernard Pointing & Co for the second respondent
Hearing date : 8 May 1995
IN THE SUPREME COURT
OF QUEENSLAND
No. 0263 of 1995
[R P Data v. Brisbane City Council & Anor]
BETWEEN:
R P DATA PTY LTD
Applicant
AND:
BRISBANE CITY COUNCIL
First Respondent
AND:
INFOPAC INTERNATIONAL PTY LTD
Second Respondent
JUDGMENT - DERRINGTON J.
Delivered the 30th day of May 1995
After a resolution that it was of the necessary opinion required by the statute, the Brisbane City Council entered into a contract with the second respondent ("Infopac") to provide it with information, particularly details held by the Council relating to land in its area, for inclusion by Infopac in its database for resale to the public. In return the Council would receive free computer access to the database plus a royalty of twenty-five percent of the income generated by Infopac in onselling that information. The contract is reviewable every year.
This contract produced a benefit (in one sense of the word) to the Council by providing it with income for use in its provision of services to the city. In the same sense of the word, the contract also provided a benefit to the citizens by making such information more accessible.
The applicant is a rival vendor of computer-stored information. Its locus standi in this application is acknowledged by the respondents. It seeks judicial review of the decision by the Council on the ground that the Council did not act for the "benefit" of its area within the meaning of the enabling legislation by entering into this contract because it did not ensure that it obtained the best consideration for the sale of its asset. More particularly, it claims that the Council entered into the contract in ignorance of the best terms that could be obtained on such a sale because it did not make suitable enquiries of what terms could be negotiated from competitors of Infopac, including itself.
In formal terms designed to comply with the jurisdictional definition of the judicial review legislation, it defines its grounds as follows:"(i)in forming the 'opinion' pursuant to s.410(1) of the Local Government Act the first respondent -
(a)failed to take into account a relevant consideration to the forming of such opinion namely - the value of the rights being granted to the second respondent;
alternatively
(b)no reasonable person in the position of the first respondent could possibly form the opinion that it was beneficial to dispose of the rights to the second respondent without firstly considering evidence of the value of those rights;
(c)formed its opinion upon a determination that the payment offered by the second respondent (which were embodied in the contract) for the rights conferred in the contract were fair and reasonable when there was no or no sufficient evidence upon which such a determination could be made;
(d)that there was no evidence or material to justify the forming of the opinion and making of the decision."
However, these all depend upon the simple proposition that the Council could not have been of the opinion that the contract provided a benefit for the area for the reason described above.
The applicant claims that for a period prior to the contract it manifested its own interest in such a contract to officers of the Council so that it should have known that there would be a competitor to Infolink for the purchase of the information; yet it did not seek any competitive offer. Nor did the it call for tenders.
The applicant also indicated that it would support its application upon the ground "that the (Council) did not consult with or receive advice from persons as required by s.412(2) of the Local Government Act"; but it withdrew this shortly after the hearing commenced. The respondent Council was able to refer to material which indicated that it did have the relevant advice from such persons and that it considered that advice for the purpose of its resolution; and indeed the Council relies upon this as part of its answer to the applicant's arguments.
The essential issue depends upon whether the Council acted for the "benefit" of the area within the meaning of the relevant sections of the Local Government Act. They are as follows:
"408. (1) A matter that, in a local government's opinion, is directed to benefiting, and can reasonably be expected to benefit, its area, or a part of its area, is taken to be conducive to the good rule and government of its territorial unit.
(2)The matters that may be of benefit to a local government area include, for example -
. . .
(d)promoting or helping the supply of services to a part of the area; and
(e)helping the finances of the area's local government; and
. . .
410. (1) A local government may engage in or help an enterprise if the enterprise concerns a matter that, in its opinion, is directed to benefiting, and can reasonably be expected to benefit, its area or a part of its area.
411.(1) For the purpose of exercising an enterprise power, a local government may -
. . .
(d)commercially exploit its property rights (whether tangible or intangible).
. . .
412.(1) A local government may exercise an enterprise power only by resolution.
(2) Before exercising an enterprise power, a local government must consult with, and have proper regard to the advice of, persons who, in its opinion, possess relevant competence about -
(a)the end to which the exercise of the power is, or would be, directed; and
(b)the ways of achieving the end; and
(c)the lawfulness of the exercise of the power."
In s.4 the word "enterprise" is defined to include any business, undertaking and activity, and it is common ground to the parties that the entry into a contract such as this is generally within the meaning of that word.
Prior to the Council's resolution, the matter received attention through a submission to the Establishment and Coordination Committee prepared by the Controller of the Bimap Marketing and Customer Services of the Council. That is the section which provides to the public the relevant information which is the subject of the contract. There was consultation with the Acting Manager (Customer and Corporate Services Department), the Controller of Facilities Management (Information Services Branch), the Manager of the Finance Division, the Principal Finance Officer (Finance Division), and the Head of the Legal Services Section. No objection was raised by any of these to the proposals in the submission, and on the contrary the general tone was supportive.
The implications of the proposal were considered and it was noted that an agreement to Infopac's proposal would set a precedent for the supply of Council information by such third parties.
It was noted in the submission that "Infopac has an established service on the Gold Coast and is now setting up a similar service in Brisbane. Infopac contacted the Council through correspondence to the Lord Mayor in January 1994. During this period they have invested considerable effort and expense in establishing business operations based on the supply of data of the Brisbane City Council." This suggests that there was a readiness and competence in Infopac to enter into a contract and to begin to supply the service within a reasonably short time. This may also have applied to other data-brokers, but it may have been a feature which moved the Council's experts towards support of the transaction as a whole.
In her report considered by the Council antecedent to its resolution, the Director of the Customer Services Branch expressed the opinion that the proposed contract would have two major benefits to the Council, increased revenue and facilitating increased customer service. On the understanding at that time that the royalty would be set at twenty percent of sales, she expressed the view that "(t)he payment offered by Infopac is considered to be fair and equitable." As it turned out, the rate finally negotiated for the royalty was twenty-five percent.
The Chief Executive Officer of the Council expressed the view that he needed to be concerned "that the agreement provides Council with a reasonable return for its expertise and is in line with Council's policy of marketing its technologies." He agreed that the proposal was one that was "highly beneficial to the Council", having been discussed by him with the marketing executives of the Office of Economic Development for the City of Brisbane, who agreed that it offered a potential for this service to be utilised on a broader basis and to attract even further customer usage.
The Acting Solicitor Draftsman in the Legal Services Branch of the Office of the General Manager indicated that it would be lawful for the Council to exercise its enterprise powers in the manner indicated in the draft resolution.
Though there is no evidence on the point, it may be true that no consideration was given to the possibility of calling for or enquiring after competing proposals, but this may well have been due to the nature of the contract, which provided exclusivity of access to the Council's information by Infopac for one year only. The belief was that similar requests by other data-brokers for the supply of data would be put to the Council in the near future, and plainly after the exclusivity period had expired the Council would be able to enter into further contracts with such other data-brokers to sell the information to them as well. It was not the type of case where only one contract could be entered into.
This means that the only objectionable feature of the contract from the applicant's point of view was the exclusivity feature, which operated for a limited time. However, it is argued that even this had value which could have affected the value of the consideration obtained by the Council, for priority would be advantageous in the first instance to the broker who held it. From the Council's point of view, any relevant price variation by extending the market through competition would be limited to this feature alone. It was certainly only an ancillary feature at best..
In summary, in reaching its resolution the Council had the advantage of serious advice from its various experts, all of whom supported the proposal for reasons which were valid, each in its own way. The uncontradicted advice was that the price was fair and equitable, and after a year the Council would be free to enter into other contracts operating contemporaneously with the proposed contract. The only criticism of this advice is that it did not consider seeking competing offers, though the thought of this may have been diverted because of Infopac's capacity to commence the service quickly.
At one end of the possible arguments, a sale of a Council asset at a price which was or may have been below its attainable value would not have been an enterprise that was "directed to benefiting" or could reasonably have been expected to benefit the area. At the other, a sale would certainly not necessarily be defective simply because it could be shown that a higher price or better terms might possible have been obtained by other means. For example, in the relevant part of the Act there is no requirement of a tendering process. Conversely, s.412(2) requires the Council to consult with and have proper regard to the advice of competent persons concerning relevant practical features of the enterprise. This would suggest that on matters such as the quantity and quality of the consideration to be received and the overall benefit to its area, the Council is entitled to rely upon the advice of such experts unless there is good reason against it.
It may be a good reason if there were grounds for the Council to believe that the advice might be defective. However, where as here the advice of the relevant expert is that the price is fair and reasonable, and where the factor of exclusivity is limited to one year, there is no reason why the Council should not have accepted that advice.
Further, in a practical way the financial return is not the only feature of such a contract that would have weight in the assessment of the quality of the overall benefit to the area from the contract. A number of other factors are relevant, some of these not measurable in money terms. Again, on these matters the Council is justified in the absence of any reason to the contrary in accepting the advice of its experts.
Finally it is not essential to the Council's power to enter into such an enterprise that it should obtain the best return by way of benefits to its area. In the present case, the fairness of the price and the very satisfactory nature of the other benefits to be enjoyed, direct and indirect, were sufficiently strong to establish that the transaction did benefit the community. This remains the case even if it were established that some better result may have been obtained by other means. The nature and purpose of the relevant statutory provisions are not such as to impose such strict obligations upon the Council before it can take steps to secure such an enterprise. Such an inhibition would connote a restrictiveness inconsistent with the nature and purpose of the power invested in the Council by the legislation.
Even if it were assumed for the purpose of argument that the Council was wrong in its failure to seek better offers, that does not mean that its decision would be reviewable. The factor of a possible escalation in the price by competition between brokers for priority of access to the information was of small importance to the Council in the total enterprise. It is not clear that it did disregard it, and even if it were in error as to the significance which was accorded to it (which is not established), that would not be a reviewable point: Parramatta City Council v. Pestell (1972) 128 C.L.R. 305, 327. Of course if there were a failure to take into account matters that should have been considered, then the opinion could not stand and the decision would be defective. But the relative value of the point may well have been so low that it cannot be said that it was not considered.
For these reasons, the arguments of the applicant must fail. The Council has established that the enterprise was directed to benefiting and could reasonably have been expected to benefit its area. The application is therefore dismissed with costs.
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