Randwick City Council v Nancor Trading Co Pty Ltd

Randwick City Council (the Council) and Nancor Trading Co Pty Ltd (Nancor) were parties to a dispute concerning the operation of a kiosk at Clovelly Beach. The Council had called for tenders for the kiosk, and after Nancor's initial tender was unsuccessful, it was invited to resubmit. Nancor submitted a tender which the Council subsequently accepted. However, the Council later decided to demolish the kiosk, leading to Nancor's claim for damages. The matter was heard in the District Court, and the Council appealed the decision to a higher court.

The central legal issues before the court were whether a legally binding agreement had been formed between the Council and Nancor at the time the Council accepted Nancor's tender, and if so, what were the terms of that agreement. Specifically, the court had to determine if the acceptance of the tender was conditional upon the execution of a formal licence agreement, and whether the draft plan of management formed part of the contractual terms. The court also considered the implications of the Council's subsequent actions, including the partial demolition of the kiosk, on the existence and enforceability of any agreement.

The court found that the parties had reached a binding agreement when the Council accepted Nancor's tender by letter on 15 December 1997. Applying the principles from *Masters v Cameron*, the court determined that the case fell into the category where parties had agreed on all essential terms but intended performance to be conditional on the execution of a formal document. The court rejected the Council's submission that no binding agreement existed until a formal licence was executed, noting inconsistencies in the Council's defence and finding that the Council's conduct, including producing a non-conforming draft licence agreement and unilaterally demolishing part of the kiosk, was the cause of the failure to finalise the formal agreement.

The appeal was allowed in part, with the judgment for Nancor being reduced. The court also substituted an order for Nancor's costs of the trial to be on a solicitor and client basis, and ordered the Council to pay 80% of Nancor's costs of the appeal. Nancor's cross-appeal concerning the costs order was allowed with costs.