Dockpride Pty Ltd v Subiaco Redevelopment Authority

REASONS FOR JUDGMENT 1 These proceedings were instituted by an application filed on 30 December 1998 which described itself as "Application under Sections 9, 10, 77 and 79 Fair Trading Act 1987 and Sections 6(2) and 48 Subiaco Redevelopment Act 1994". The relief claimed was damages, damages under s 79 of the Fair Trading Act 1987 (WA), an order under s 77 of the Fair Trading Act and further or other relief. All of the statutes referred to are laws of the State of Western Australia. 2 The statement of claim filed on 30 December 1998 identifies the Subiaco Redevelopment Authority (the Authority) as a body corporate constituted by the Subiaco Redevelopment Act 1994 (WA). In August 1997 the Authority invited expressions of interest from persons wishing to submit tenders to the Authority for the purchase of land for the redevelopment of the Station Square precinct in Subiaco as a retail precinct. Westpoint requested and received from the Authority an Information Package which, inter alia, incorporated draft Design Guidelines said to form part of the Authority's development control system and which were said to be included with the Information Package to give proposed tenderers clear guidance as to the content of their sketch plans and redevelopment proposals and the Authority's requirements for any design of the project. The distribution of the Information Package is said to have involved an implied representation by the Authority that a proposed tenderer who decided to make an expression of interest must submit a sketch plan and development proposal complying with the draft design guidelines and that if they did not so comply the proposed tenderer would not be invited by the Authority to submit a tender. 3 Westpoint submitted a written expression of interest in October 1997 including a sketch plan and development proposal comprising predominantly retail and commercial buildings. In November 1997 the Authority invited Westpoint to tender for the purchase of the land and delivered a tender document entitled "Subiaco Redevelopment Authority Sale by Tender Station Square Precinct". Westpoint was informed that the Authority had placed it on a short list of tenderers. The tender document was said to have provided, inter alia, that Design Guidelines contained in a separate document bound into the tender documents were incorporated in the Conditions of Sale and the Invitation to Tender. There were express conditions of the Design Guidelines that any plans for redevelopment must incorporate certain features. These included a requirement that the pedestrian route designated the Rokeby Walk which was to link the proposed Station Square to a carpark to the north of the land must be on the same alignment as Rokeby road. The other condition referred to in the statement of claim was that the proposed building to house the major tenancy on Lot 1 must have its principal entrance visually recognisable and no more than eight metres from the proposed Station Square. It is said to have been an express and alternatively an implied term that plans submitted to the Authority with any tender must show a design of the redevelopment which complied with the Design Guidelines. 4 The Authority is said to have orally indicated, by its officer Mr Cox, that it was pleased with Westpoint's expression of interest and that many would be tenderers had not been invited to tender because their expressions of interest did not comply with the Design Guidelines. It is said to have represented by implication that the Authority would only consider tenders which complied with the Design Guidelines. 5 Westpoint says it prepared a detailed design for the proposed redevelopment which it incorporated in a tender for the land and that its design complied with the Design Guidelines. The tender was actually submitted by a related company, Dockpride, on 5 February 1998. An implied contract is asserted between the Authority, Westpoint and/or Dockpride that in consideration of Westpoint and/or Dockpride preparing and submitting a tender the Authority would only consider tenders containing plans which complied with the Design Guidelines. It was also said to be a term of the implied contract that the Authority would act fairly in considering competing tenderers and if it permitted other tenderers to submit tenders containing plans which did not comply with the Design Guidelines would inform each tenderer including Dockpride of that fact and gave each tenderer the opportunity to modify its design and plans. It was said to be an implied term of the contract that the Authority would accept the tender which contained plans for redevelopment complying with the Design Guidelines and which offered the highest price. Furthermore the Authority would not, merely on the basis of "a subjective preference for another design" fail to accept the tender which offered the highest price and which complied with the Design Guidelines. In breach of these terms it is alleged that the Authority considered and accepted a tender from a competing tenderer, the Blackburn Consortium, which contained plans of a redevelopment that did not comply with the Design Guidelines and which offered a lower price than Dockpride. In the Blackburn tender the proposed Rokeby Walk was not on the same alignment as Rokeby Road and, it is alleged, the principal entrance to the major tenants building was more than eight metres from the proposed Station Square. In addition, whereas Dockpride's tender was for a sum of $12.88 million, the Blackburn tender was in the sum of $11.35 million. It is said there was no tender which offered a higher price than Dockpride's tender. Westpoint and Dockpride claim to have suffered loss and damage. The plea of loss and damage at this point in the statement of claim (par 16) is plainly based on breach of the implied contract. 6 The statement of claim goes on to set up in the alternative, implied representations made by the Authority along the lines of the terms alleged in the implied contracts. These implied representations are said to have been conduct in trade or commerce in the sense used in the Fair Trading Act. They are said to have been misleading or deceptive or likely to mislead or deceive in contravention of s 10 of the Fair Trading Act. Again, it is pleaded that by reason of that misleading or deceptive conduct and Westpoint and Dockpride's reliance upon it, they have suffered loss and damage, being the cost of submitting the tender, some $300,000, and loss of other commercial opportunities. 7 The Authority filed a notice of appearance on 21 January 1999 and with it a motion for transfer of the application pursuant to s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) to the Supreme Court of Western Australia. An affidavit filed in support of the motion pointed to the fact that the claims made in the application were based entirely upon State law, involved no inter-State or Federal law element and would involve questions as to the application or interpretation of particular State legislation being the Subiaco Redevelopment Act 1994, the Subiaco Redevelopment Regulations 1994 and the Fair Trading Act 1987. 8 Following the filing of the motion and its supporting affidavit, an amended application was filed together with an amended statement of claim pursuant to a consent order made on 27 January 1999. The amended application raised additional claims for relief under ss 82 and 87 of the Trade Practices Act which have their parallel in the relief already claimed under ss 77 and 79 of the Fair Trading Act. The amended statement of claim seeks to characterise the Authority as a trading corporation, a characterisation which is unnecessary for the purposes of a claim under the Fair Trading Act, but necessary to raise the cause of action under the Trade Practices Act. The implied contract claim remains unamended. The claim based on misleading or deceptive conduct invokes s 52 of the Trade Practices Act in addition to s 10 of the Fair Trading Act. The effect of the amendment therefore was to introduce the federal claim as an additional alternative claim, albeit its elements would be identical, save in one respect, to the elements of the cause of action based on the State Fair Trading Act. The one point of difference is the additional requirement to characterise the Authority as a trading corporation in order to attract the application of the federal statute. 9 There is little doubt that if this claim were to fail under the Fair Trading Act on its merits, it could not succeed under the Trade Practices Act.