Piety Developments Pty Ltd v Cumberland City Council

Claims for determination

1. In its originating Summons, PD sought specific performance of a contract allegedly constituted by the Council's "acceptance" of PD's offer. The proceedings were commenced on an urgent basis, on 9 February 2022. This was shortly before the scheduled first meeting of the newly elected Councillors, at which the rescission motion was scheduled for consideration. PD obtained an interlocutory injunction preventing that motion from being considered. That injunction remains in place.
2. The Council denied that it had, by its conduct, made any binding or enforceable contract to sell the land to PD. A further defence advanced on the Council's behalf was that, even if its conduct would otherwise have given rise to a binding and enforceable contract for sale of the land to PD, the Council lacked the legal power to dispose of the land. The land was said to be "community land" rather than "operational land". A cross-claim was filed on behalf of the Council seeking declarations accordingly.
3. The cross-claim was the subject of a separate hearing in April this year. In May, I delivered judgment: Piety Developments Pty Ltd v Cumberland City Council [2023] NSWSC 480 ("J1"). I rejected the Council's contention and dismissed its claims for declaratory relief in the cross-claim. Later, I delivered a separate judgment on costs: Piety Developments Pty Ltd v Cumberland City Council (No 2) [2023] NSWSC 774 ("J2").
4. As well as maintaining that there is no binding or enforceable contract, the Council contends that it has a statutory entitlement (indeed, an obligation) to proceed with the rescission motion. On this argument, even if a binding contract had come into existence, it would not be open to the Court to prevent the Council from rescinding its resolution; any right that PD might have, in the event that there is a binding contract, would be to damages only.
5. The remainder of the proceedings, consisting of PD's claims for relief, continued in the Expedition List, and were the subject of a hearing, as already noted, on 11 December. The hearing was confined to the urgent aspect of the case, namely PD's claim for specific performance. PD's claim to damages for delay, and any claim by it for loss-of-bargain damages (if there was a valid contract but specific performance was not available) were held over for later decision if they arose.

Summary and analysis of the evidence

1. The evidence before me at the hearing was largely documentary. Some supplementary and explanatory evidence was given by affidavit by three witnesses. These were Mr El-Cheikh, for PD, and, for the Council, Mr Peter J Fitzgerald, the General Manager, and Mr Charlie Ayoub, who, at the time of the tender, was the Executive Manager Corporate Services.
2. None of the witnesses were required for cross-examination and no disputed issues of fact arose for decision.

Tendering legislation

1. It is convenient to begin by referring to provisions of the Local Government Act 1993, the Local Government (General) Regulation 2005, and the Local Government (General) Regulation 2021 which were in force when the tender was originally issued in June 2020. I was not referred to any material amendments over the period in question. For convenience, I will refer to the Act as the LG Act, and the regulations in force at any given time as the LG Act.
2. When the tender process was commenced, ss 178 and 179 of the LG Regulation provided: 178 Acceptance of tenders (1) After considering the tenders submitted for a proposed contract, the council must either - (a) accept the tender that, having regard to all the circumstances, appears to it to be the most advantageous, or (b) decline to accept any of the tenders. (1A) Without limiting subclause (1), in considering the tenders submitted for a proposed contract for the performance of domestic or other waste management services, the council must take into account whether or not existing workers (within the meaning of clause 170) will be offered employment or engagement on terms and conditions comparable to those applicable to the workers immediately before the tender was submitted. (2) A council must ensure that every contract it enters into as a result of a tender accepted by the council is with the successful tenderer and in accordance with the tender (modified by any variation under clause 176). However, if the successful tender was made by the council (as provided for in section 55(2A) of the Act), the council is not required to enter into any contract in order to carry out the requirements of the proposed contract. (3) A council that decides not to accept any of the tenders for a proposed contract or receives no tenders for the proposed contract must, by resolution, do one of the following - (a) postpone or cancel the proposal for the contract, (b) invite, in accordance with clause 167, 168 or 169, fresh tenders based on the same or different details, (c) invite, in accordance with clause 168, fresh applications from persons interested in tendering for the proposed contract, (d) invite, in accordance with clause 169, fresh applications from persons interested in tendering for contracts of the same kind as the proposed contract, (e) enter into negotiations with any person (whether or not the person was a tenderer) with a view to entering into a contract in relation to the subject matter of the tender, (f) carry out the requirements of the proposed contract itself. (4) If a council resolves to enter into negotiations as referred to in subclause (3)(e), the resolution must state the following - (a) the council's reasons for declining to invite fresh tenders or applications as referred to in subclause (3)(b)-(d), (b) the council's reasons for determining to enter into negotiations with the person or persons referred to in subclause (3)(e). 179 Notification of acceptance of successful tender As soon as practicable after entering into a contract in accordance with clause 178 or deciding not to accept any of the tenders for a proposed contract, a council must - (a) send to all tenderers whose tenders were not accepted notices to the effect that their tenders were unsuccessful or, as the case may be, that none of the tenders for the proposed contract was accepted, and (b) display in a conspicuous place that is accessible to members of the public a notice specifying the name of the tenderer whose tender was accepted and the amount of the successful tender or, if none of the tenders was accepted, a notice to that effect.
3. Those provisions appeared in Part 7 of the Regulation, headed "Tendering". Section 163 was headed "Application of Part" and provided: (1) This Part applies to all contracts for which a council is required by section 55 of the Act to invite tenders. Note - This Part does not apply to other kinds of contracts. However, a council may apply provisions of this Part (with any necessary alterations) to other kinds of contracts if it wishes to do so. (1A) The following persons are prescribed for the purposes of section 55(3)(a) of the Act - (i) Local Government Procurement Partnership (ABN 34 578 553 267), (ii) MAPS Group Limited trading as Procurement Australia (ABN 45 058 335 363). (1B) To avoid doubt, a reference to a person prescribed by subclause (1A) includes any duly appointed agent of that person. (2) (Repealed)
4. Section 164 also defined "tender" as meaning, "a tender submitted or proposed to be submitted to a council in accordance with this Part".
5. Tendering is also dealt with in s 55 of the LG Act (that provision is in the same form today as it was in June 2020). Paragraph (d) of subsection (3) provides that the section does not apply to "a contract for the purchase or sale by a council of land". But subsection (2A) provides that nothing in the section "prevents a council from tendering for any work, service or facility for which it has invited tenders". Subsection (2) provides that "tenders are to be invited, and invitations to tender are to be made, by public notice and in accordance with any provisions prescribed by the regulations".

Opening of tender

1. For the purposes of its tendering, the Council has at all relevant times used an electronic portal named "eProcure". Tender documents are accessible to tenderers through the portal via a password login system. Communication between the Council and tenderers also take place through the portal, which logs and records such communications.
2. When logging into the portal, users are required to tick a box, by way of agreement to hyperlinked terms and conditions of the Council. I have set out the relevant terms below. The terms contain hyperlinks to further documents, which I have shown in bold: TERMS AND CONDITIONS 1. The supplier warrants that their business details are correct and Cumberland Council has no responsibility in verifying these details. 2. The supplier warrants that it will adhere to Councils Code of Conduct and Statement of Business Ethics in all dealings with Council and its officers. 3. The respondent warrants that Council's Conditions of RFX will apply for all requests. 4. All respondents warrant that no physical signature or seal is required for the offer to be effective and binding and that the respondent by submitting an electronic response is a director or an authorised delegate executing such response in accordance with section 9 of the NSW Electronic Transactions Act 2008. 5. Unless specified, Council's Purchase Order Terms and Conditions apply.
3. Each tender on the portal is given a unique number by the Council. The tender in the present case was numbered RFX034.
4. According to Mr Ayoub, the "public invitation to tender was published to the market as Proposed sale and future redevelopment of 13 John Street, Lidcombe" on 23 June, with the invitation closing on 21 July. Mr Ayoub referred to eight documents which were uploaded by the Council for access by tenderers. These relevantly included: 1. A draft contract, with a draft notice on the first page. 2. The RFX034 Specification for 13 John Street. 3. Conditions of RFX. 4. Tender Offer Form.
5. It appears that once a tenderer logged into the eProcure portal (having accepted the terms and conditions, set out above), they were able to access a page for RFX034. Such a page appeared to be in evidence, and was headed, "RFX034 Proposed sale and future redevelopment of 13 John Street, Lidcombe - Summary". The following text appears at the top: Cumberland City Council (Council) is seeking submissions from appropriately qualified and experienced companies or organisations to provide a genuine offer for the proposed sale and future redevelopment of 13 John Street, Lidcombe (the Site). Respondents are to provide a business case to identify the highest and best uses and options for the Site with consideration for economic and community benefits that will complement the Lidcombe Town Centre. The successful Respondent, together with their funds, will redevelop the Site in accordance to their RFX submission and enter into an agreement with Council for the transfer/dedication of the portion of the Site that will be dedicated to Council for community benefits. The work is awarded for the contract work on a lump sum fixed price basis in accordance with the fixed lump sum provisions in the tender pricing schedules herein. The applicable terms and conditions of engagement are detailed in the attached Conditions of Contract. The Draft Contract for Sale is also available in the attached documents.
6. It seems that on this page, tenderers were able to access documents (1) and (2) referred to above (document (3) was accessible via the terms and conditions; presumably document (4) was accessible somewhere else on the portal).

Specification Document

1. Document (2), the specification document, comprised four pages, plus two pages of attachments.
2. The introduction to the specification document set out the first three paragraphs of the summary (quoted above) (the third paragraph appeared under the sub-heading, "Lump Sum - Purchase Price"). The document then set out details of the land, including the following aerial photograph:
3. The "Scope of Works" section of the document provided: Council is seeking interest from companies or organisations who have the potential to redevelop and utilise the land in a way which activates the Site and provides a calculable benefit to the community. Your proposal must address the scope of works outlined below: 1. Provide a lucrative sale offer to Council without the need for any further contribution. 2. Demonstrate relevant project experience and delivery record for similar provision of works. 3. Details of your company / relevant team members / project delivery team. 4. Provide a Business Case, outlining your agency's financial capacity to purchase and redevelop the Site. 5. Proposed programme demonstrating an understanding of the works required and recommend the best use to be carried out on Site. Details of significant local amenity and/or community benefits that will be delivered by your proposed development are to be included. It is the intention that the above requirements satisfy Council and that the proposed development on Site is viable and have a reasonable prospect of success. The Council at its absolute discretion may or may not elect to select a proposal for the disposal and development of land at 13 John Street, Lidcombe. In accordance with the Conditions of RFX, Council reserves the right at any time and on any grounds to: (a) amend the RFX Documents, the Scope of Works/Specification or the Services/Works; (b) readvertise for new RFXs; (c) terminate at any time further participation in the process by any or all Respondents; (d) amend or terminate the RFX process; (e) extend the Closing Time for RFXs; (f) alter the approach during any negotiations; (g) require additional information or clarification (including presentations) from any Respondent and use or not use such information in the evaluation; (h) elect not to select any Respondent as preferred Respondent; or (i) withdraw the invitation to RFX.
4. Under the heading "Statement of Requirements", the document made clear that respondents were required to address all of the requirements specified in the "Scope of Works and Returnable Schedules".

Draft sale contract and note

1. Next, I describe Document (2) - the draft sale contract and note, which, according to Mr Ayoub, was uploaded in June 2020. The front page of the document was headed "IMPORTANT NOTE". It read: This Contract is in draft form only and is subject to change. It is likely that variations and amendments will be required to this Contract to reflect the deal that has been struck between the respective parties. The proposed purchaser acknowledges that the vendor will have regard to the community benefit that the proposed purchaser intends on providing in respect of the property the subject of the Contract. The vendor anticipates that it will register a positive covenant and/or restrictive covenant on the title to the Property the subject of the Contract prior to completion of the Contract to ensure that the community benefit which the vendor has undertaken to provide is provided by the vendor and/or its successors in title in respect of the Property. The terms of the positive covenant and/or restrictive covenant as well as the terms of the instrument to be registered on the title to the Property are not yet known and the terms will depend on the nature of the community benefit that the proposed purchaser intends on providing in respect of the Property.
2. The contract used the 2019 Law Society standard form, consisting of 32 clauses. There were 15 further special conditions, numbered from clauses 33-47.
3. Special condition 33 contained the following relevant definitions: "Community Benefit" means [to be advised] … "Date for Completion" means the later of: (a) forty-two (42) days from the date of this Contract; and (b) if the positive covenant and/or restriction on the Property anticipated to be registered on the title to the Property pursuant to clause 39.1 has not been registered on title at the date of this Contract, then fourteen (14) days following the date that the vendor advises the purchaser in writing that the positive covenant and/or restriction on the Property has been registered on the title to the Property.
4. Community benefit was dealt with in special condition 39.1 That provided: Purchaser's Acknowledgement Regarding the Provision of a Community Benefit 39.1.1 The purchaser acknowledges that the vendor has entered into this Contract in reliance on the purchaser undertaking and/or providing the community benefit that it undertook to provide in respect of the Property when it submitted its tender for the purchase of the Property. 39.1.2 The purchaser acknowledges that the vendor intends on registering a positive covenant and/or restriction on the title to the Property to secure the provision of the community benefit that was promised to be provided by the purchaser at the time of submitting it's tender and to ensure that this benefit is attached to the land. 39.1.3 The purchaser acknowledges that the vendor may not have registered the positive covenant and/or restriction on the title to the Property as anticipated by this clause as at the date of this Contract however intends to do so before completion of this Contract. 39.1.4 The vendor shall notify the purchaser in writing within a reasonable time after the positive covenant and/or restriction on the title to the Property has been registered with NSW Land Registry Services. 39.1.5 The purchaser shall not make any objection, make a Claim, raise a requisition, seek to delay completion of this Contract, seek to rescind or terminate this Contract as a result of the registration of the positive covenant and/or restriction of the title to the Property as anticipated by this clause.

RFX conditions

1. Document (3), the RFX conditions, contained the following terms: 3. STATUS OF RFX 3.1. The Respondent is invited to provide a submission in accordance with these Conditions of RFX. 3.2. The invitation to respond in clause 3.1 is an invitation to treat. It is not an offer capable of acceptance, nor should it be relied upon, construed or interpreted as such. 3.3. By submitting a submission, the Respondent acknowledges that the submission does not create a contract between the Respondent and the Council. 3.4. Without limiting any clause of the Conditions of Participation: (a) Respondents acknowledge that no agreement has been formed between the Council and a Respondent as a result of the RFX process such that the Council is limited or constrained in the way in which it can deal with a Respondent's offer other than (if at all) as set out in these Conditions of RFX; and, (b) The Council will not be liable to any Respondent for any loss or damage suffered by a Respondent arising out of or in connection with any act or omission of the Council in respect of the invitation to RFX in clause 3.1, the subject matter of this invitation to submit a response, the RFX Documents, any RFX, the evaluation of submissions, the termination of the RFX process or the award of a contract for the Works/Services (whether to a Respondent or someone else). (c) Acceptance of any offer or tender does not fetter Council in the operations of its functions including any consideration and approval or refusal of any application related to the proposed land. … 20. ACCEPTANCE OF SUBMISSION 20.1.1The Council is not bound to accept the lowest price or any submission. 20.2. The Council will not be responsible for or pay for any costs, losses or expenses suffered or incurred by the Respondent out of or in the connection with the preparation and submissions. 20.3. A submission will not be deemed to have been accepted and no contract in respect of the Services/Works will arise between any Respondent and the Council until the successful Respondent and the Council execute the Contract by signing the Formal Instrument of Agreement or where the value is less than $50,000, when Council issues a Purchase Order.

Resolution to decline tenders and negotiate

1. After the time for submissions ended on 21 July, the tenders were analysed by Counsel employees. They produced a report for review by the Council at its meeting on 2 September. The following resolution was passed by the Council at that meeting: 1. Decline all tenders in accordance with Clause 178(1)(b) of the Local Government (General) Regulation 2005, as all three tender submissions had probity risks, weaknesses and omissions identified in their submissions; 2. Enter into negotiations with all three tenderers in accordance with Clause 178(3)(e) of the Local Government (General) Regulations 2005, via an established negotiation protocol that includes the provision of a best and final offer, with a view of entering into a contract in relation to the tender; and 3. Receive a future report on the outcomes of the negotiations for determination.
2. On 8 September, letters were sent notifying tenderers of the Council's resolution. The letter to PD relevantly stated: OUTCOME OF EXPRESSION OF INTEREST PROCESS - PROPOSED SALE AND FUTURE REDEVELOPMENT OF 13 JOHN STREET, LIDCOMBE I refer to your submission in response to the abovementioned matter which was considered at the Ordinary Council meeting held on 2 September 2020, where it was resolved (Min. 834) that Council: [the resolution was set out] Council's Procurement team will be in touch shortly with information as to the next steps in the negotiations process.

Meetings with tenderers

1. The Council then arranged meetings with both tenderers. Mr Ayoub described the purpose of the meetings as being "for Council to provide feedback on the RFX034 submissions, and to invite them to submit their best and final offers in accordance with the 2 September 2020 Resolution via the eProcure portal".
2. The PD meeting appears to have occurred on 3 December 2020. In evidence was a document which Mr Ayoub described as the agenda for that meeting.
3. The document is titled, "Piety Development's Tender Submission - 13 John Street Lidcombe". Under the heading, "Meeting agenda", is the following: Your submission provided to Council does not have enough information to adequately assess your proposal, therefore we ask that you address the following deficiencies. There is then a list of "attendees" - five staff members from the Council, and two people associated with PD. This is followed by the heading, "Tender Evaluation & Feedback", under which were set out strengths and weaknesses, as follows: Strengths Good project experience across Sydney - Good qualification and project experience with each key person nominated Weaknesses - Piety Developments has not reviewed the draft Contract - Significant issues with the financial capacity to purchase the site and to undertake the proposed development - The offer provided is preliminary and will be subject to final negotiations with Council and independent valuations - Indicative timeframes and floor plans were not provided (highest and best use not nominated) - Uncertainty of the actual respondent -clarification was sought - Critical issues for the project were not provided
4. The document then sets out the following "Next Steps": Invitations will be sent out to you by close of business Friday 4 December 2020 You will have up until Monday 11 January 2021 at 9 am to resubmit your Tender to Council via the eProcure website to address the probity risks, weaknesses and omissions identified in your submission The future report on the outcome of the negotiations for determination will be reported to Council in February/March 2021
5. Finally, the document sets out the following "Key issues to address": Lump Sum Price - The lump sum price will be final and will not be subject to further negotiations, independent valuations and/or review/ further site investigations - Upon execution of the Contract, a 10% non-refundable deposit is required 6 months settlement from the date of execution of the Contract Demonstrated Experience - Clearly outline your involvement in the project - Clearly outline your previous development/project experience - Experience with Local Government Client(s) will be advantageous Demonstrated Knowledge - Each point in this section must be fully addressed Demonstrated Financial Methodology & Capacity - Provide a Business Case outlining your company's financial capacity to purchase the site and to undertake the proposed development - You must provide sufficient information to enable the assessment of the Respondent's financial capacity and liquidity - If your accountant is to provide a statement, their comments must be prepared with audit, review and verification Proposed Programme - Indicative concept plans and/or floor plans are to be provided - Indicative timeline on the proposed development are to be provided - Any foreseen critical issues for the project must be identified in the programme - The proposed programme must clearly highlight the details of community benefits that will be delivered to Council - The replacement of the existing car park (55 car spaces) or any other like-for-like offers will be accepted and assessed accordingly

Opening of supplementary tender

1. On the following day, 4 December, Council gave the two tenderers access to a new computerised tender, known as RFX34.1. According to Mr Ayoub, the terms and conditions which needed to be accepted when logging on to the portal were unchanged from RFX34, except for an updated code of conduct. Mr Ayoub also gave evidence that the documents for the phase were accessed and submitted via the portal, as with RFX34. Although he identified the documents submitted by Piety during this phase, he did not identify what materials were uploaded for the tenderers to access.
2. There was however, in evidence, a screenshot of the webpage for RFX034.1. It is headed, "Proposed sale and future redevelopment of 13 John Street, Lidcombe - Summary". It then continued: Cumberland City Council is entering into negotiation phase with qualified and experienced companies or provide a genuine offer for the proposed sale and future redevelopment of 13 John Street, Lidcombe (the Site). Respondents are to provide a business case to identify the highest and best uses and options for the Site with consideration for economic and community benefits that will complement the Lidcombe Town Centre. The successful Respondent, together with their funds, will redevelop the Site in accordance to their RFX submission. If applicable, an agreement will be made to Council for the transfer/dedication of the portion of the Site that will be dedicated for community benefits. The work is awarded for the contract work on a lump sum fixed price basis in accordance with the fixed lump sum provisions in the tender pricing schedules herein. The applicable terms and conditions of engagement are detailed in the attached Conditions of Contract.
3. A specification document and draft contract of sale appear to have been uploaded.
4. The "closing date" for RFX034.1 appears to have been 8 April 2021. Negotiations took place via the portal up until this date. It is unnecessary to set out in full the terms of PD's submission and the communications between the parties about it. It is sufficient to note that PD's proposal included some variations to the terms of the contract which had been provided by the Council for the purposes of the June 2020 tender. These proposed variations were referred to in correspondence between the parties as "non-conformances".

8 September meeting and communication

1. Thereafter, the Council internally considered the further submissions. The matter was further considered at a meeting of the Council on 8 September. The following resolution was passed: That Council: 1. Continue to negotiate with both proponents for the potential sale of land at 13 John St Lidcombe, with the view of receiving a best and final offer. 2. Clarify for negotiations, the requirements for on site community infrastructure as follows: • 150 underground public car parking spaces of unrestricted parking. • Car parking spaces are to be conveniently located at the top of the underground carparking of the development, above any dedicated private car parking. • Ongoing maintenance of the public carpark will be the responsibility of the proponent, and not Council. • The public car park is to be operated as a Free Parking Area per s.650 of the Local Government Act 1993. 3. Undertake a community consultation process in relation to the proposal. 4. Receive a report at the finalisation of the above (1-3) for Council's determination.
2. On 23 September formal notice of the resolution was given to the two tenderers. The letter to PD stated: RE: Tender No. RFX034 - Proposed sale & future redevelopment of 13 John Street, Lidcombe (Final Negotiation Offer) I am writing to advise you that in accordance with Cumberland City Council's resolution on the 8 September 2021 Council resolved the following: [The terms of the resolution were set out]. As a result of the above resolution, Council now requests that you submit your "best and final offer" to Council for the purchase of 13 John Street, Lidcombe taking into consideration the points 1-4 resolved by Council as outlined above. All offers must be submitted by email to Sarah Szabo, Procurement Business Partner, [email], by 2pm on Monday 4 October 2021. After this, the Tender Negotiations Panel will assess the offers and make a final recommendation to Council with respect to the offers received. It is envisaged that a final report on this matter will be included in the agenda for the Council meeting being held on 20 October 2021. This report will also include the results of the Community Consultation process, and it envisaged that Council will make its final decision on the matter at this meeting.

Council meeting legislation and practice

1. It is convenient at this point to refer to the statutory provisions concerning council meetings.
2. Section 372 of the LG Act concerns the rescission of resolutions. It provides: 372 Rescinding or altering resolutions (1) A resolution passed by a council may not be altered or rescinded except by a motion to that effect of which notice has been duly given in accordance with the council's code of meeting practice. (2) If notice of motion to rescind a resolution is given at the meeting at which the resolution is carried, the resolution must not be carried into effect until the motion of rescission has been dealt with. (3) If a motion has been negatived by a council, a motion having the same effect must not be considered unless notice of it has been duly given in accordance with the council's code of meeting practice. (4) A notice of motion to alter or rescind a resolution, and a notice of motion which has the same effect as a motion which has been negatived by the council, must be signed by 3 councillors if less than 3 months has elapsed since the resolution was passed, or the motion was negatived, as the case may be. (5) If a motion to alter or rescind a resolution has been negatived, or if a motion which has the same effect as a previously negatived motion, is negatived, no similar motion may be brought forward within 3 months. This subsection may not be evaded by substituting a motion differently worded, but in principle the same. (6) A motion to which this section applies may be moved on the report of a committee of the council and any such report must be recorded in the minutes of the meeting of the council. (7) The provisions of this section concerning negatived motions do not apply to motions of adjournment.
3. Section 375 of the LG Act concerns minutes, and provides: 375 Minutes (1) The council must ensure that full and accurate minutes are kept of the proceedings of a meeting of the council. (2) The minutes must, when they have been confirmed at a subsequent meeting of the council, be signed by the person presiding at that subsequent meeting.
4. The General Manager, in his affidavit, also referred to the Council's Code of Meeting Practice (which needs to adopt, and cannot be inconsistent with, provisions of a prescribed model code, see LG Act, s 360; LG Act, cl 232). Counsel for the Council referred me in particular to the following provisions: 17 DECISIONS OF THE COUNCIL Council decisions 17.1 A decision supported by a majority of the votes at a meeting of the Council at which a quorum is present is a decision of the Council. (S.371 LGA) 17.2 Decisions made by the Council must be accurately recorded in the minutes of the meeting at which the decision is made. Rescinding or altering Council decisions 17.3 A resolution passed by the Council may not be altered or rescinded except by a motion to that effect of which notice has been given under clause 3.10. (S.372 LGA) 17.4 If applicable, a proposed alternate resolution is to be provided at the same time that a motion to rescind a resolution of the Council is submitted to the General Manager. 17.5 If a notice of motion to rescind a resolution is given at the meeting at which the resolution is carried, the resolution must not be carried into effect until the motion of rescission has been dealt with. (S. 372(2) LGA) 17.6 If a motion has been lost, a motion having the same effect must not be considered unless notice of it has been duly given in accordance with clause 3.10. (S. 372(3) LGA) 17.7 A notice of motion to alter or rescind a resolution, and a notice of motion which has the same effect as a motion which has been lost, must be signed by three (3) Councillors if less than three (3) months has elapsed since the resolution was passed, or the motion was lost. (S. 372(4) LGA) 17.8 If a motion to alter or rescind a resolution has been lost, or if a motion which has the same effect as a previously lost motion is lost, no similar motion may be brought forward within three (3) months of the meeting at which it was lost. This clause may not be evaded by substituting a motion differently worded, but in principle the same. (S. 372(5) LGA) 17.9 The provisions of clauses 17.6-17.8 concerning lost motions do not apply to motions of adjournment. (S. 372(7) LGA) 17.10 A notice of motion submitted in accordance with clause 17.7 may only be withdrawn under clause 3.11 with the consent of all signatories to the notice of motion. 17.11 A motion to alter or rescind a resolution of the Council may be moved on the report of a Committee of the Council and any such report must be recorded in the minutes of the meeting of the Council. (S. 372(6) LGA) 17.12 Subject to clause 17.8, in cases of urgency, a motion to alter or rescind a resolution of the Council may be moved at the same meeting at which the resolution was adopted, where: (a) a notice of motion signed by three Councillors is submitted to the Chairperson, and (b) a motion to have the motion considered at the meeting is passed, and (c) the Chairperson rules the business that is the subject of the motion is of great urgency on the grounds that it requires a decision by the Council before the next scheduled ordinary meeting of the Council. 17.13 A motion moved under clause 17.12(b) can be moved without notice. 17.14 A motion of dissent cannot be moved against a ruling by the Chairperson under clause 17.12(c). Recommitting resolutions to correct an error 17.15 Despite the provisions of this Part, a Councillor may, with the leave of the Chairperson, move to recommit a resolution adopted at the same meeting: (a) to correct any error, ambiguity or imprecision in the Council's resolution, or (b) to confirm the voting on the resolution. 17.16 In seeking the leave of the Chairperson to move to recommit a resolution for the purposes of clause 17.15(a), the Councillor is to propose alternative wording for the resolution. 17.17 The Chairperson must not grant leave to recommit a resolution for the purposes of clause 17.15(a), unless they are satisfied that the proposed alternative wording of the resolution would not alter the substance of the resolution previously adopted at the meeting. 17.18 A motion moved under clause 17.15 can be moved without notice. Despite clauses 10.19-10.29, only the mover of a motion referred to in clause 17.15 can speak to the motion before it is put. 17.19 A motion of dissent cannot be moved against a ruling by the Chairperson under clause 17.15. 17.20 A motion moved under clause 17.15 with the leave of the Chairperson cannot be voted on unless or until it has been seconded. … 19 AFTER THE MEETING Minutes of meetings 19.1 The Council is to keep full and accurate minutes of the proceedings of meetings of the Council. (S.375(1) LGA) 19.2 At a minimum, the General Manager must ensure that the following matters are recorded in the Council's minutes: (a) details of each motion moved at a Council meeting and of any amendments moved to it, (b) the names of the mover and seconder of the motion or amendment, (c) whether the motion or amendment was passed or lost, and (d) such other matters specifically required under this code. 19.3 The minutes of a Council meeting must be confirmed at a subsequent meeting of the Council. (S.375(2) LGA) 19.4 Any debate on the confirmation of the minutes is to be confined to whether the minutes are a full and accurate record of the meeting they relate to. 19.5 When the minutes have been confirmed, they are to be signed by the person presiding at the subsequent meeting. (S.375(3) LGA) 19.6 The confirmed minutes of a meeting may be amended to correct typographical or administrative errors after they have been confirmed. Any amendment made under this clause must not alter the substance of any decision made at the meeting. 19.7 The confirmed minutes of a Council meeting must be published on the Council's website. This clause does not prevent the Council from also publishing unconfirmed minutes of its meetings on its website prior to their confirmation.

4 October "best and final offer"

1. PD responded to the Council's letter of 23 September requesting its "best and final offer" by an email sent on 4 October. That email stated: With due consideration to points 1-4 resolved by council (on 8th September 2021) we submit our best and final offer for the purchase of 13 John Street, Lidcombe as: The purchase price of 13 John Street, Lidcombe without the non-conformances and DA approval conditions is $12,000,000 total works in kind offer, based on: • 150 car spaces @$65,000/car space (as per the car space requirements below)= $9,750,000 • Cash payment of $2,250,000 6 months after exchange of contract We can also provide the following clarifications (in bold) as part of the offer with regards to council requirements for on-site community infrastructure as outlined in point 2 of the resolution: • 150 underground public car parking spaces of unrestricted parking. Response: Piety Group can confirm we will provide 150 underground public car spaces of unrestricted access • Car parking spaces are to be conveniently located at the top of the underground carparking of the development, above any dedicated private car parking. Response: Piety Group can confirm that the car parking spaces are to be conveniently located on the top levels of the underground carparking of the development, above any dedicated private car parking • Ongoing maintenance of the public carpark will be the responsibility of the proponent, and not Council. Response: Piety Group can confirm that ongoing maintenance of the public carp ark will not be the responsibility of council. • The public car park is to be operated as a Free Parking Area per s.650 of the Local Government Act 1993. Response: Piety Group can confirm that the public car park is to be operated as a Free Parking Area per S.650 of the Local Government Act 1993. Please don't hesitate to contact me If you have any questions or require further additional information. We look forward to finalizing the EOI and working with council to deliver this integral piece of community infrastructure to the Lidcombe town Centre.

Council consideration of offer

1. Again, the offers were the subject of an internal assessment (but this also included community engagement, in accordance with the 8 September resolution).
2. The minutes of the Council meeting on 20 October 2021 record that a resolution was put and failed. They do not record the terms of the resolution. But according to the General Manager's affidavit, the resolution was in the following terms: "That Council: 1. Receive the best and final offers from Landmark Ply Ltd and Piety Developments Pty Ltd (Attachment 1). 2. Receive the Final Community Engagement Report (Attachment 2). 3. Accept the offer from Piety Developments Ply Ltd, In accordance with Clause 178(1)(a) of the Local Government (General) Regulation 2021. 4. Delegate authority to the General Manager to execute the documents"
3. The next day, a Notice of Motion was lodged by three councillors, proposing that the failed resolution be adopted at the next council meeting on 3 November.

3 November Council meeting

1. The resolution came to be considered at the Council's 3 November meeting. That meeting was declared open by the Mayor at 6:37pm. Fourteen Councillors attended (one arrived 2 minutes late), and of those Councillors, two attended by web conferencing. The minutes also record the presence of eight other Council employees. The minutes also make clear that the meeting was being streamed live on the Council's website (and that those at the meeting were informed of this).
2. The motion was eventually passed 8-7, on the mayor's casting vote. It is not entirely clear from the minutes how the motion came to be considered. But the minutes suggest the following: that there was a public forum on the motion, with two speakers; that the Council resolved to suspend orders to enter closed session to consider the motion; and that the Council eventually returned from closed session, and then voted on the motion. The meeting was closed at 8:25pm.

Events following 3 November meeting

1. It appears that notice of a motion to rescind the resolution which had been passed at the 3 November meeting was given shortly after the conclusion of that meeting. Mr Ayoub gave the following evidence: Approximately one minute following the conclusion of the Council meeting on 3 November 2021, at about 8.26pm, whilst still in the Council Chamber, Councillor Huang personally handed me a handwritten document signed by four Councillors, which I recognised as a Rescission Motion, in the following terms: "I hereby give notice of motion to rescind Item No. C11l21-889 passed at the meeting of 3"' Nov 2021. Alternative motion: That there be no further action in relation to 13 John St."
2. A photo taken by Mr Ayoub of the handwritten document was in evidence, and was timestamped 8:33pm (8 minutes after the meeting ended). Mr Ayoub gave evidence that he informed the General Manager of the rescission motion later that evening (and the General Manager also gave evidence of this).
3. Mr Ayoub also gave evidence, in a later affidavit, of how the unsigned minutes of the 3 November meeting were prepared and published.
4. Mr Ayoub first gave the following evidence about the process for minutes "being prepared, published and confirmed": 5. The process followed for minutes from a council meeting being prepared, published and confirmed, is as follows: (a) On the day following the Council meeting, the staff commence preparing a draft version of the minutes which once completed, usually being the same day as they were commenced, I review them to ensure accuracy and then forward them to the Mayor for final review. (b) If the Mayor considers any corrections should be made, discussions take place with myself and, where appropriate upon review of the recording of the Council meeting, corrections to the draft minutes are made. (c) The draft minutes, incorporating any agreed corrections, are subsequently then endorsed by the Mayor and are published on the Council's website. (d) All councillors are notified via an email from myself that the draft minutes have been approved, with a link provided to the Business Paper and Minutes part of the Council's website to view the published draft minutes. (e) Under section 375 of the Local Government Act 1993, the draft minutes must be confirmed at a subsequent meeting of the Council and then signed by the person presiding at that subsequent meeting. (f) Once Council meeting minutes are confirmed at the next Ordinary Meeting, staff ensure that the Mayor signs the confirmed minutes. The draft minutes are then removed from Council's website and are replaced with the confirmed and signed minutes.
5. Mr Ayoub then gave evidence specific to the 3 November meeting minutes. According to him, Council staff prepared the minutes. Mr Ayoub then reviewed them, before the minutes were "endorsed" by the Mayor on 4 November. At 1:32pm on 4 November, Mr Ayoub emailed all Councillors, copying the Council's Executive, with the following: The Draft Minutes for the 3 November 2021 Ordinary Council meeting can be accessed via HERE [(hyperlinked)] for your information, as approved by the Mayor. A copy of the Draft Minutes are available on the Councillor portal also. Mr Ayoub's affidavit made clear that the hyperlink was to the draft minutes, as published on the Council's website. A copy of the draft minutes (as presented to the Council meeting on 17 November) was in evidence, and those minutes are unsigned.
6. Mr El-Cheikh gave the following evidence of how Piety came to learn of the passing of the resolution: [29] The motion was passed with a 7-6 majority vote. Council accepted Piety's 'best and final' offer as communicated on 4 October 2021. [30] To the best of my recollection, Piety learned of the passing of the resolution on 3 November 2021 on that very day. I was not personally present at the meeting, but I do recall being told about it on the day of the meeting. [31] On or about 9 November 2021, I recall being provided with the council minutes of the meeting of 3 November 2021, which confirmed the passing of the resolution in which council agreed to accept the offer from [PD].
7. Mr El-Cheikh appears to have been incorrect in describing the motion as passed by a 7-6 majority (as opposed to 8-7). His reference to Piety learning of the passing of the resolution "on that very day" is strange, given the meeting occurred in the evening. But Mr El-Cheikh was not cross-examined on these discrepancies, and they were not mentioned in the argument.

17 November meeting

1. The Council's 17 November meeting commenced at 6:40pm. The minutes record that the General Manager made the following announcement at the commencement of that meeting: "Councillors, In accordance with Clause 3.19 of the Code of Meeting Practice, I'd like to report to the Chamber that following the last Council meeting held on 3 November 2021, I received a Notice of Rescission Motion signed by 3 Councillors in relation an item on the agenda that evening, which I accepted in accordance with clause 3.10 of the Code of Meeting Practice. Based on advice received with respect to the Caretaker provisions of the Local Government Act and Regulation, I have written to the Minister for Local Government seeking a determination on whether or not the rescission motion could lawfully be heard during the caretaker period. On that basis, the rescission motion has been excluded from the agenda for tonight's meeting pending receipt of this advice from the Minister. Given this advice was not received when the business paper was published, the matter will be held over until the next scheduled Ordinary Council meeting following the caretaker period expiring.
2. During that meeting, Council passed a resolution confirming the minutes of the 3 November meeting. It appears that the minutes were then signed by the Mayor (as Chairperson) and the General Manager. Assuming the practice referred to by Mr Ayoub was then followed, the signed and confirmed version of the minutes would have been published on the Council's website in place of the draft version. I did not understand there to have been any differences between the confirmed form, and the unsigned form which had previously been posted.

Application for specific performance

1. PD's case, as clarified by amendments to the summons at trial, was one of specific performance in the strict sense. PD alleged that the Council's acceptance of PD's offer of 4 October 2021, gave rise to a contractual obligation on the Council to execute a contract in the terms offered. PD sought an order compelling the Council to execute a contract in that form and then to carry it into effect.
2. The form of the contract which PD contended the Council had obliged itself to execute (to which I will refer as "the Offer Contract") was based on the contract used in the Council's tender, described above. The proposed contract specified the consideration on the first page of the contract for sale as $2.25 million with a 10% deposit. PD abandoned the amendments ("non-conformances") it had earlier been seeking and proposed only two changes to reflect the 4 October email.
3. First, the Offer Contract amended the first of the alternative dates for completion (subparagraph (a) in the definition of "date for completion": see [34] above) to "six months after exchange of contract". The second change was to insert the following in place of "to be advised" in the definition of "community benefit": Providing on-site community infrastructure as follows: (a) 150 underground public car parking spaces of unrestricted parking; (b) Car parking spaces are to be conveniently located at the top of the underground car parking of the development, above any dedicated private car parking; (c) Ongoing maintenance of the public carpark will be the responsibility of the purchaser, and not the Council; (d) The public car park is to be operated as a free parking area per s 650 of the Local Government Act 1993, in accordance with the offer contained in [the 4 October email], as attached.
4. In this form, the Offer Contract contains one textual problem. Clause 39.1.1 would still refer back to the community benefit in PD's tender, rather than the community benefit identified in PD's email. But no doubt this could be addressed by a suitable amendment.

Effect of resolution

1. Counsel for the Council contended that the Council's resolution of 3 November had no legal effect. Counsel took three points.
2. Counsel's first point fastened on the reference in [3] of the resolution to clause 178(1)(a) of the LG Regulation. The Council's previous resolution of 2 September 2020 had terminated the tender process, by declining all tenders in accordance with clause 178(1)(b). Subparagraph 178(1)(a) referred to the acceptance of a tender. It followed in counsel's submission that the November 2021 resolution could have no legal effect.
3. In my view, this submission goes too far. It may be accepted, and was indeed common ground between counsel, that from the point of view of the regulations, the Council was, by 3 November 2021, in the course of negotiations with PD under clause 178(3)(e). But I think it is clear that the reference in the clause to "negotiations" is simply a reference to negotiations of the usual type. That is in no way inconsistent with the acceptance of an offer, giving rise to a contract in accordance with ordinary contractual rules.
4. I therefore do not accept the submission, to the extent that it appeared to suggest that the reference to clause 178(1)(a) meant that [3] of the resolution should be treated as some sort of nullity for contractual purposes. Nevertheless, the reference may be of some significance in determining, as a matter of construction, whether it was an effective contractual acceptance of the offer by PD. I return to this question below.
5. Counsel's second point also built on the reference to clause 178(1)(a). This point was that the reference to the subclause created an ambiguity in the resolution. Counsel submitted that, in the ordinary course, reference to the subclause called up a tender offer. Counsel submitted that it was therefore unclear whether the resolution was referring to PD's email of 4 October 2021, or to the earlier offer made by PD in response to the tender.
6. It is convenient to deal with this point at the same time as counsel's third point. The third point was that the form of the "acceptance" in [3] was not consistent with what the parties had contemplated in their dealings. Counsel referred to the general rule that, in this State, parties are presumed when negotiating for the purchase of land not to be bound until exchange of formal contracts. Counsel submitted that there were numerous references in the tender documents to a formal contract being executed. Counsel characterised the present case as one in the third category of case identified in Masters v Cameron (1954) 91 CLR 353 (at 360), where no legally enforceable contract comes into existence until exchange of formal contractual documents.
7. It seems to me that this submission, at least in its broadest form, is outflanked by the way in which PD puts its case at trial. PD seeks to enforce a collateral contract which would require the Council to execute a formal contract for the sale of the land. That is not inconsistent with a mutual understanding that a document containing all of the terms of the bargain would be reduced to writing and made the subject of a formal exchange.
8. This still leaves the question whether, on its proper construction, the resolution evinced an intention to accept PD's offer in its email of 4 October. But in my view, the language is clear. In its context, I think [3] in the resolution clearly refers to the 4 October offer and not the earlier tender offer lodged by PD. And I think it is clear from the terms of the resolution that no further negotiation about the terms was contemplated. The resolution authorised the General Manager to proceed with executing the necessary documents and nothing more. In my view, it is clear that the resolution was intended to commit the Council to an acceptance of the offer in the 4 October email. The question is whether the Council has actually accepted.

Communication of acceptance

1. Counsel for the Council submitted that, even if (as I have found), the resolution did not contemplate further negotiation, it still needed to be communicated to PD to become effective. Counsel's first point was that clause 179 of the LG Regulation expressly requires such communication. Counsel also called in aid the cases on rescission of council resolutions referred to below. Those cases were said to establish that rescission only becomes impermissible once the resolution has been formally communicated to the affected party. Until that happens, rescission is permissible, even if the affected party becomes informally aware of the resolution in the meantime.
2. Counsel for PD retorted that clause 179 was not applicable because the parties were engaged in contractual negotiations, not a statutory tender process. The rescission cases were also decided in a statutory rather than a contractual context, the resolutions in question being concerned with the exercise of specific statutory or administrative powers. Counsel submitted that for present purposes there was "no such thing as formality in communicating acceptance".
3. This may be accepted so far as it goes, but, except in an unusual case (of which Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 is probably the most famous example), acceptance must be communicated by the offeree to the offeror for it to become contractually effective. Counsel for PD accepted that an un-communicated decision, on its own, was not sufficient, and that it needed to be shown that the Council had communicated its acceptance to PD.
4. I did not understand the applicable principles to be in dispute. Whether conduct of an offeree amounts to acceptance of the offer is a question of the parties' mutual intention. It is to be determined by the Court by reference to the terms of the offer and the nature of the conduct, within the matrix of relevant circumstances known, or at least available, to the parties.
5. It may be accepted that the LG Act and Regulations had no direct effect on the parties' negotiations in terms of prescribing any particular form of acceptance for PD's offer. But that does not mean that the Act and Regulations were irrelevant for contractual purposes. PD must be taken to have known, for the purposes of the circumstantial matrix, that it was dealing with a statutory body with express statutory powers to rescind any resolution it might pass, at least until that resolution had been formally communicated to the parties affected by it.
6. The extent to which the Court could take the provisions of the Code of Meeting Practice into account came up in the course of the parties' submissions. But there was some confusion in the submissions between the Code of Conduct, which formed part of the tender documents (see [23] above), and the Code of Meeting Practice, which did not. In the end, it is unnecessary to decide whether the Code of Meeting Practice formed part of the matrix of contractually relevant circumstances. PD must at least be taken to have known that the Council had statutory obligations, and governmental responsibilities, which obliged it to conduct meetings in public, and to publish information about its decisions, as well as to keep formal minutes of the proceedings at its meetings.
7. Counsel for PD relied, for communication of the acceptance, on the evidence of Mr El-Cheikh. I understood counsel to rely upon two means of communication: the awareness that Mr El-Cheikh received from another staff member that the resolution had been passed, and the publication of the unsigned version of the minute of the Council's website on 4 November. I will deal with these in turn.
8. There is a preliminary evidentiary difficulty with the first alternative. The evidence does not identify how the unidentified person who passed the news on to Mr El-Cheikh learned of the passage of the resolution. That person would not necessarily have learned of the passage of the resolution from attending, or watching the livestream of, the meeting. The news might have been communicated to that person by someone else who attended the meeting (or had, himself or herself, got the news second-hand from someone who had attended it). The news might even have been communicated directly by a Council officer.
9. Because of the evidentiary gap in the case, it is difficult to identify any more specific act of communication by the Council than the act of passing the resolution in public. That was in no way directed to PD. If representatives of PD had participated in the Council meeting, in circumstances which showed that they were there to hear whether an acceptance was forthcoming to their offer, that would be one thing. But in the present case, the Councillors would have had no idea whether a representative of PD was present, or viewing the meeting on livestream, or not.
10. Similar observations apply to the publication of the unsigned minutes of the meeting on the council website the following day. Again, the Council did not take any steps to ensure that the contents of the minutes were communicated to PD, and the publication of the minute was not aimed at communicating their content to PD or any other party. Furthermore, the version of the minute published on 4 November was published unsigned, and, in the context, could only reasonably have been understood as a draft. The formal minute had not been adopted, and was not going to be until the next meeting of the Council took place.
11. The same points can be made in another way. In making the meeting open to the public, the Council simply complying with what it considered were its statutory and governmental obligations to conduct meetings publicly (LG Act ss 10 and 10A). Even without the statutory provision, it would no doubt have been open to the Council to conduct meetings publicly if it considered that doing so would be appropriate in the discharge of its governmental functions.
12. Similarly, the publication of the unsigned minutes of the meeting on the council website the following day was not in any way directed to PD. It represented a further step by the Council in the exercise of its governmental functions.
13. I have dealt with the parties' arguments on the footing that Council's resolution was an immediate acceptance of PD's offer. But there may be a more fundamental difficulty for PD. What the Council did was to "resolve" to "accept" the offer. In the ordinary use of language, to resolve to do something is to decide to do it. But from a contractual point of view, to accept PD's offer required more than a decision; it required a communication of that decision.
14. In that context, the resolution, on its true construction, may have been nothing more than an expression of the Council's will, coupled with an (implicit) grant of authority to the Council's officers to make the necessary formal communication, presumably via correspondence of the same type as had been sent following the passage of earlier resolutions. On that view, communication of the resolution itself would not have been sufficient. But this way of looking at the case was not the subject of submissions (or at least squarely so) and in view of the conclusions I have already reached, I do not need to take it any further.
15. For these reasons, I consider that there was no effective communication of the resolution to PD. This ground of defence by the Council succeeds.

Completeness

1. In their written submissions, counsel for the Council pointed out that the tender version of the contract, even shorn of all its non-conformances, did not define the "community benefit" for the purposes of clause 39.1. Counsel submitted that this left the contract incomplete.
2. This particular problem was addressed by the proposed amendments to the form of contract, introducing a definition of community benefit taken from the email of 4 October, which I have described above. But I cannot help feeling that there may have been a deeper problem which was not addressed.
3. The scheme of clause 39.1 was that the community benefit was to be enforced by means of a "positive covenant and/or restriction" on the title of the land. Although the clause did not expressly say so, the "positive covenant and/or restriction" was presumably a reference to Division 4 of Part 6 of the Conveyancing Act 1919, which provides for the creation of easements and restrictive and positive covenants on land. Such instruments can impose positive covenants for maintenance and repair (see s 88BA) and may be granted in favour of a prescribed authority (which would include the Council) without the need for a dominant tenement (s 88A).
4. Counsel for PD acknowledged that the Offer Contract did not contain any express obligation on PD to give ongoing access to the carpark. But counsel submitted that this did not matter. The Council could simply register the necessary "positive covenant and/or restriction" prior to sale which could thereafter be enforced if that became necessary.
5. Despite this explanation, I remain sceptical. An easement for use of land as a carpark is now a recognised form of easement: see the authorities referred to in Stolyar v Towers (2018) 19 BPR 38,287 at [41]-[43]. But I find it hard to see how, as a matter of conveyancing, such an easement can be defined in registrable form when the building in question has not even been designed, let alone constructed. Subparagraph (b) of the definition of "community benefit" in the Proposed Contract particularly underlines this problem. How could an obligation to ensure that public carparking spaces are to be "conveniently located" on the "top levels" of the proposed carpark be defined at this point?
6. Indeed, the problem appears to be still more fundamental. It should not be forgotten that the tender originally referred to the "sale and re-development" of the land. The offer email of 4 October described the total price as being $12 million, because of the cost of the 150 carparks that formed part of the offer. But the Offer Contract does not require the construction work to take place. Even if an easement could be imposed, easements generally operate only as restrictions on the use of land. The exceptions for positive covenants would not seem to go anywhere near covering the construction of a building. Even if they did, they could not ensure that such a development would actually be undertaken, if for no other reason than that planning permission could not be guaranteed.
7. These potential problems were not the subject of argument before me. In view of the conclusions I have reached elsewhere, I do not need to resolve them.

Statute of Frauds

1. The applicable provision is s 54A of the Conveyancing Act, which relevantly provides: (1) No action or proceedings may be brought upon any contract for the sale or other disposition of land or any interest in land, unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged.
2. The decision of Kunc J in Irvine v Dowling [2021] NSWSC 119 stands for the proposition that a collateral contract of the type which is the subject of PD's application must itself satisfy the requirements of s 54A (see [125]-[129]). Counsel for PD accepted that proposition.
3. Counsel identified the "memorandum or note", for the purposes of s 54A, as the signed minute of the meeting of 3 November. There was some debate before me about the fact that the 4 October email did not itself set out all of the terms of the Offer Contract. Instead, those terms needed to be pieced together by a process of engrafting the email onto the original version of the contract from the June 2020 tender.
4. But in the end, nothing appears to turn on this. A memorandum will be sufficient if it sufficiently clearly incorporates another instrument by reference: B Edgeworth, Butt's Land Law (7th ed, 2017, Lawbook Co) at 152 [4.210], and the authorities there cited. There seems no reason why, in a proper case, it should not be possible for the instrument so incorporated to incorporate, in turn, a further instrument, and so on (as seems to have been the case, for instance, in Performance Capital Mortgage Pty Ltd v Motive Finance & Leasing Pty Ltd (2010) 15 BPR 29,267: see at [27]). In the end, I did not understand that there was any issue about this.
5. But s 54A imposes other requirements. One concerns the form of the memorandum. It must be a memorandum "thereof", i.e. a memorandum of the contract. Another concerns the authority of the person executing the memorandum. The signatory, if not the person to be charged, must be a person "thereunto lawfully authorised", i.e. authorised by the person to be charged to sign the memorandum.
6. The relevant provision of the Statute of Frauds, in one form or another, has existed for centuries, and has been adopted in many jurisdictions. It would be surprising if there were no authorities which presented some analogy with the present case. But neither side referred me to any such authority. I have therefore dealt with the application of the requirements I have mentioned by reference to first principles.
7. As to the first requirement, it is true that the signed minute of the 3 November meeting records a resolution to accept PD's offer. But strictly speaking, only a part of the minute and, indeed, only part of the resolution, records the acceptance and could therefore qualify as the memorandum. Moreover, when the minute was signed on 17 November, a rescission motion had been moved and was pending, and this had been noted at the beginning of the meeting. If that notation had appeared in the minutes of the 3 November meeting as signed, the recording of the original resolution in those minutes could hardly be regarded as a memorandum of a concluded contract between the Council and PD. It would seem artificial if the making of the notation in the minutes of the later meeting produced a different result.
8. I think what this underlines is that the minutes were not prepared for the purpose of recording contractual dealings between the Council, on the one hand, and PD, or anyone else, on the other. Rather, they were produced pursuant to a statutory obligation on the Council to record the proceedings of its meetings. In the absence of authority on the question, I do not think that this makes the minutes, or any particular part of them, a memorandum "of" a contract between the Council and PD in the relevant sense.
9. There are also problems with the requirement for authorisation. The minutes were signed pursuant to a resolution of the Council at the meeting which followed the meeting of 3 November, on 17 November. They were signed by the Mayor in accordance with the statutory requirement that, when minutes have been confirmed at a subsequent Council meeting, they must be signed by the person presiding at that subsequent meeting (LG Act, s 375(2)).
10. When I asked counsel for PD who the authorised signatory was for the purpose of s 54A, counsel replied that it was the Mayor. But there is no evidence that the Mayor was ever authorised by the Council to sign a memorandum of the contract arising from the acceptance of PD's offer. He certainly was not so authorised by the resolution of 3 November. It is quite fortuitous that he attended the meeting of 3 November and later signed the minute of that meeting on 17 November.
11. I did not understand counsel for PD to have argued that the General Manger, rather than the Mayor, was the authorised signatory. The evidence does not seem to reveal why, at the meeting of 17 November, the General Manager signed the minute of the 3 November meeting alongside the Mayor. But it clearly was not as a result of any authorisation given in the resolution of 3 November. I therefore do not think that the requirement that the signatory be "thereunto" authorised by the Council was satisfied either.
12. For these reasons, the Council's statute of frauds defence also succeeds.

Rescission motion

1. Counsel for the Council presented a further argument, which would have applied even if, contrary to my finding, the Council's acceptance of the offer on 3 November had given rise to a binding and enforceable contract. The defence was based on s 372 of the LG Act (quoted above at [51]).
2. Counsel contended that the Council had a statutory right (indeed, an obligation) to allow the rescission motion, notice of which had been properly given, to proceed. According to this contention, even if a binding and enforceable contract had been entered into, only damages could be recovered. The Court should not, by its power to grant specific performance, override the Council's statutory rights and obligations.
3. By way of background to this submission, counsel referred me to three authorities in particular: Ex parte Renouf (1924) 24 SR (NSW) 463; Shanahan v Strathfield Municipal Council [1973] 2 NSWLR 740; and Sentinel Orange Homemaker Pty Ltd v Davis Investment Group Holdings Pty Ltd [2021] NSWSC 550.
4. For their part, counsel for PD sought to distinguish these decisions on the ground that in each case the resolution in question had involved the exercise of a statutory decision-making power. Counsel pointed out that the present case involved contractual negotiations rather than the exercise of such powers. Counsel also submitted that any power of rescission that the Council might have could not be used to override accrued legal rights, including a right to specific performance.
5. At the time Renouf was decided, the Local Government Act 1919 contained no express reference to rescission of council resolutions. The Full Court's decision, including the exception where the affected party had acted upon the resolution or (as later authority has suggested) been formally notified of it, was based on implication. There is now express provision for rescission in s 372, but no reference to exceptions. A question might arise as to whether the same exceptions as formerly are to be implied.
6. Ultimately, this is a question of interpretation of the LG Act. Since it was not necessary to decide the question for present purposes, I thought it best to leave it to be dealt with on appeal should that be necessary.

Conclusions and orders

1. I therefore concluded that: 1. the alleged contract was not legally effective, because the purported acceptance was not validly communicated to PD as putative offeror; 2. in any event, any such contract would be unenforceable pursuant to the Conveyancing Act 1919, section 54A.
2. After announcing my conclusions and giving the parties an opportunity to consider them, I made orders in a form agreed by the parties to reflect my decision. The orders included an interim stay on the discharge of the injunction which prevents the Council from dealing with the rescission motion discharged, in case PD appealed.
3. The orders of the Court on 15 December were: 1. The Plaintiffs' claim is dismissed. 2. The interlocutory injunction granted on 9 February 2022, and as extended on 14 February 2022 until further order, is discharged forthwith. 3. The First Plaintiff is to pay the Defendant's costs of the proceedings, save as to the order for costs made on 4 August 2023 in favour of the First Plaintiff in respect of the separate determination. 4. Order that order 2 be stayed until the date which is 5 weeks after the delivery of the Court's reasons for judgment. 5. Liberty to apply on 2 days' notice.

Amendments 07 February 2024 - Grammatical errors: [13], [69], [76]. [78] and [100]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 February 2024