GLOBAL SMART CITIES PTY LTD -v- CITY OF WANNEROO [2023] WASC 174 (24 May 2023)

4.1 a tender shall only be accepted following the completion of an assessment of all tenders by an officer of the City or a tender evaluation panel, and a review of any recommendation by that officer or panel by the City's council or the City's chief executive officer: clause 5.1 of the Tender Request; and

4.2 the City shall accept the tender judged by the City as most advantageous to the City to accept in accordance with regulation 18(4) of the Local Government (Functions and General) Regulations 1996 (the "Regulations"): clause 8.2 of the Tender Request. Regulation 18(4) provides that tenders are to be assessed by the relevant local government by means of a written evaluation of the extent to which each tender satisfies the criteria for deciding which tender to accept and it is to decide which of them (if any) it thinks would be most advantageous to the local government to accept.

1. The contract also contained an implied term to the effect that the City would conduct its evaluation of Ystop's tender fairly and in a manner that would ensure equal opportunity to Ystop.
2. The City also received tenders from:

6.1 Muscara Holdings Pty Ltd, which trades as Streetside Advertising ("Streetside");

6.2 Claude Outdoors Pty Ltd; and

6.3 Natsales Advertising Pty Ltd.

1. On or about 8 March 2022, a City officer, the Director Assets, ("the Officer") recommended to the Council of the City ("Council") that the City accept Streetside's tender, which was provided in the document titled "4.6 Tender No. 22007 - The Supply, Installation, Maintenance and Advertising on Seats", in pages 175 to 183 of a document ("the Briefing Agenda") titled "Briefing Papers; Council Members' Briefing Session" dated 8 March 2022 (the "Initial Recommendation").
2. The Briefing Agenda recorded that:

8.1 pursuant to clause 5.1 of the Tender Request, the tenders received in response to the Tender Request ("the Tenders") were assessed by a tender evaluation panel ("the Tender Evaluation Panel") comprising 4 officers of the City; and

8.2 oversight of the process of assessing the Tenders was undertaken by an external probity advisor, William Buck Consulting (WA) Pty Ltd ("William Buck") and the City's Contract Officer.

1. On or before 15 March 2022, the Officer recommended to the City that, at its meeting on 15 March 2022, the Council resolve:

9.1 to accept the Initial Recommendation, and that recommendation was recorded in a document titled "Tender No. 22007 - The Supply, Installation, Maintenance and Advertising on Seats", which is an extract of pages 176 to 184 of a document titled "Council Agenda; Ordinary Council Meeting" dated 15 March 2022 ("the Agenda");

9.2 reject Ystop's tender; and

9.3 accept Streetside's tender;

("the Second Recommendation")

1. On 15 March 2022, the Council by a vote of 14/1 adopted the Second Recommendation, as recorded in the minutes of the meeting of the Council held on 15 March 2022.
2. By reason of the matters referred to in para 10 above:

11.1 Ystop considers that it may have a cause of action for breach of contract by the City, on grounds including that Ystop's tender may not have been evaluated fairly by the City and in a manner ensuring an equal opportunity to Ystop; and

11.2 Ystop has not been able to obtain sufficient information, after reasonable enquiries, to enable a decision to be made as to whether to commence proceedings against the City for breach of contract.

1. The defendant opposed the plaintiff's application and after hearing argument, I made orders in the following terms on 2 September 2022:
   1. In this order, terms and parties defined in the originating summons have the same meaning.
   2. Pursuant to Order 26A rule 4 of the Rules of the Supreme Court 1971, by 21 September 2022, the City shall make, file and serve a list in the form of Form 17, verified by affidavit in the form of Form 18 made by the chief executive officer of the City, of documents which are or have been in the possession, custody or power of the City that fall within the classes of documents described below:

(a) documents that comprise or concern the tender process that was undertaken by the City, pursuant to the Tender Request;
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> (b) the document referred to as "Attachment 1 - 22007 - Confidential Memo - Attachment to Tender Report Confidential" on page 181 of the Initial Recommendation and page 182 of the Second Recommendation included in the Agenda;
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> (c) the document referred to as "Attachment 2 - 22007 Draft Probity Letter" on page 181 of the Initial Recommendation and page 182 of the Second Recommendation included in the Agenda;
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> (d) the document referred to as the "Procurement Evaluation Plan" on page 176 of the Initial Recommendation and page 177 of the Second Recommendation included in the Agenda;
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> (e) minutes of the meeting referred to as the City of Wanneroo Council Members' Briefing Session 08 March 2022 held as foreshadowed in the Briefing Agenda;
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> (f) tenders submitted by Streetside, Claude Outdoors Pty Ltd and Natsales Advertising Pty Ltd, pursuant to the Tender Request;
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> (g) all written communications and all written minutes or records of communications, whether in paper or electronic form, comprising or concerning the assessment of the Tenders by the Tender Evaluation Panel or the oversight of the process of assessing the Tenders between any one or more of: > > > (i) the members of the Tender Evaluation Panel or any of them;
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> > (ii) any officers of William Buck; or
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> > (iii) the City's Contract Officer; > >
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> (h) all written notes or memoranda, whether final or draft and whether in paper or electronic form, made in the course of or concerning the assessment of the Tenders by the Tender Evaluation Panel or the oversight of the process of assessing the Tenders made by any one or more of: > > > (i) the members of the Tender Evaluation Panel or any of them;
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> > (ii) any officers of William Buck; or
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> > (iii) the City's Contracts Officer; > >
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> (i) all written communications or records of unwritten communications (whether in paper or electronic form) between the City and Streetside (including its agents and representatives) in respect of any of the Tenders or the assessment of the Tenders.

3. By 12 October 2022, the City shall allow Ystop to inspect the documents discovered by the City pursuant to paragraph 2 of this order. 4. The City shall provide copies of any documents discovered by it to Ystop upon request, subject to payment by Ystop of the City's reasonable photocopying charges. 5. In the event that Ystop issues proceedings against the City, the costs of the application, including reserved costs of the application, and the costs of the City providing discovery, be in the cause of those proceedings. 6. In the event that Ystop does not issue proceedings by 31 October 2022, the City's costs of the application, including reserved costs of the application, and the costs of the City providing discovery, to be taxed or agreed, are to be paid by Ystop. 7. The parties have liberty to apply on 24 hours' notice.
4. A number of points can be made about these orders. First, although the defendant opposed the making of the orders, its interest in the application was different to the interests of the parties who had submitted tenders and whose documents were to be made available by virtue of the order. The plaintiff's claim, if any, against the defendant, is for breach of a process contract. That is to say, by inviting tenders, the plaintiff committed to follow a process in the awarding of a contract. If that process was not followed - that is to say if there was a breach of contract - then the plaintiff may have a claim against the defendant. I was satisfied the plaintiff could not make that decision without access to the documents submitted by other tenderers. A natural consequence of making the order for discovery was that documents from other tenderers which were highly sensitive would pass into the possession of the plaintiff. The plaintiff is a competitor of the other tenderers. It was apparent at the time I made the orders that the other tenderers may have an interest in whether or not the plaintiff should see the subject documents.
5. On 10 October 2022, the defendant filed an affidavit of Daniel John Simms, the chief executive officer of the defendant. This was effectively a discovery affidavit and was filed in compliance with the order for discovery. When the plaintiff inspected the documents, it found the defendant had redacted the documents extensively with the effect, so the plaintiff said, that they were rendered meaningless. The plaintiff has always acknowledged that inspection of the documents would result in it having access to sensitive information from other tenderers. Its position was that the tenderers were protected by the Harman undertaking. The plaintiff also said that there was no warrant for the defendant to redact the documents - it was inconsistent with the discovery order I made.
6. With this in mind, the plaintiff sought the following orders on 23 January 2023:
   1. By 27 January 2022, the City shall, in compliance with Order 4 of the Orders made by Master Sanderson on 2 September 2022, provide to Ystop all additional documents requested by Ystop, and copies of previously redacted documents amended to include all text that goes beyond the City's own claims of confidentiality.
   2. Costs be in the cause.
7. By this stage, the other tenderers had become aware of the prospect documents they had submitted to the defendant would be disclosed to the plaintiff. On 2 February 2023, they filed an application by Minute which sought the following orders:
   1. Claude Outdoor Pty Ltd, Muscara Holdings Pty Ltd and Natsales Advertising Pty Ltd (collectively, the interested non-parties) be given permission to have access to the following documents on this Honourable court's file in this proceeding:

(a) All documents filed by or on behalf of a party or interested non-party (whether filed to date or that may be filed in the future on a date before the application for confidentiality orders currently listed for hearing on 21 February 2023 is heard and finally determined); and
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> (b) All orders made by this Honourable court.

2. The interested non-parties be given a copy of each document described in order 1(a) and (b) in electronic form.
3. Both the application by the plaintiff and the application by the tenderers (hereafter I will refer to the tenderers as the interested non‑parties) was listed for a special appointment. At the conclusion of the hearing, I indicated I would dismiss the application of the interested non-parties and stand over the plaintiff's application to allow consideration of the plaintiff's application at a later date. At the hearing, the defendant, who had no real interest in the outcome, provided unredacted copies of the discovered documents. These reasons deal with why I dismissed the application of the interested non‑parties.
4. It was the interested non-parties' position they were entitled to inspect the documents for a number of reasons which can be summarised as follows:

(a) so they could understand the nature of the asserted cause of action upon which pre-action discovery was ordered;
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> (b) so they could understand what information the plaintiff says is required to make a decision about whether to commence proceedings;
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> (c) to allow them to formulate an appropriate confidentiality regime for their confidential and commercially sensitive information; and
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> (d) to enable them to respond in a procedurally fair manner to any contention raised by the plaintiff that they would be prejudiced by any confidentiality regime which was imposed.

8. The interested non-parties specified the documents to which access was sought as being:

(a) the originating process filed with respect to the application for pre-action discovery;
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> (b) submissions made by the parties in respect of the application for pre-action discovery;
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> (c) affidavits read in support of the application for pre-action discovery; and
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> (d) the orders of the court made upon determining the application for pre-action discovery.

9. The interested non-parties correctly assert that access to the documents was governed by O 67B of the Rules of the Supreme Court 1971 (WA). They also correctly noted that no order restricting access to any documents has been made pursuant to O 67B r 5. The interested non-parties took as their starting position, what they said was a general rule, the court will grant non-parties access to material that has been admitted into evidence or referred to or considered by the judge in the course of a hearing to which the public was admitted.
10. This statement of principle was supported by reference to The Hancock Family Memorial Foundation Ltd v Fieldhouse [No 4] [2012] WASC 176. Based upon this statement of general principle, the interested non-parties made the following points. First, an application for pre-action discovery is a hearing to which the public are admitted. Second, there is a legitimate interest in relation to access to the documents because they were informed the approach and submissions the interested non-parties will take to their application for confidentiality orders. Third, refusal of leave would mean the interested non-parties are to advance their application for confidentiality orders in a complete vacuum - that is, they would not know why the plaintiff requires access to parts of those documents which the interested non-parties contend contain confidential and commercially sensitive material. Finally, as an overarching position, the interested non-parties pointed out the plaintiff had control over the documents it adduced in evidence in support of the application. If it contends that the evidence adduced by it is entirely or partially confidential, then appropriate orders could have been made at the hearing of the application for pre-action discovery. The fact that no such orders were sought or made was an indication the plaintiff at the hearing did not regard its documents as confidential.
11. Although it did not form part of the submissions, it seemed the interested non-parties were really saying to the plaintiff this. If you want access to our documents which are commercially sensitive, then we should have access to your documents. Then and only then could there be a fair hearing. The interested non-parties appeared to accept, at least by implication, they could not restrict the plaintiff's access to the defendant's documents and the consequential release to the plaintiff of material the interested non-parties regarded as confidential and commercially sensitive. What they really sought was a confidentiality regime. This was opposed by the plaintiff.
12. In response, the plaintiff noted that the defendant's request for tender (which it defined as the 'Tender Request') amounted to an offer. When a tender was submitted, a contract arose between the defendant and each tenderer. The contract was to the effect that the party tendering would participate in the tender process and expend time, resources, effort and money to prepare the tender in exchange for the defendant reviewing the tender and considering all other tenders in accordance with the process agreed to be implemented by the defendant in the tender request.
13. The plaintiff says the tenderers agreed and acknowledged by submitting their tender, a number of things. Relevantly, pursuant to tender condition 9.1, their rights with respect to confidentiality were subject to various exceptions including a court order as is the case here. Further, pursuant to tender conditions 9.4 and 9.5, the defendant was required to and therefore would maintain a publicly available tender register in accordance with Regulation 17 of the Local Government (Functions and General) Regulations 1996 (WA). These Regulations require the publicly available register to include the names of each tenderer, the name of the successful tenderer, the amount of the consideration or summary of the amount of the consideration sought in the tender accepted by the local government.
14. These submissions were really directed at why the interested non‑parties' documents should be made available to the plaintiff. But they also feed into the issue of whether or not the interested non-parties should have access to the documents forming part of the court record. Those documents are not really relevant to the position taken by the interested non-parties. They do not inform the question of whether or not a confidentiality regime in relation to those documents is necessary or appropriate. It is not enough to say that disclosure of the documents will be of commercial benefit to the plaintiff and therefore if those documents are available to the plaintiff, the interested non-parties should have the same access. That is not, with respect, the correct way to view the nature of the pre-action discovery application and the orders subsequently made.
15. Accordingly, I was not satisfied that the orders sought by the interested non-parties ought be made. As the relevant documents have now been provided to the court, it remains for a Judge or Master to determine whether or not a confidentiality order ought be made. On publication of these reasons, the parties ought relist the matter for further directions. The costs of this application ought be reserved.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.