Australia: Government success in tender proceedings overturned on appeal

Last Updated: 8 August 2016
Article by Scott Alden and Jarrad McCarthy (formerly with Holding Redlich)
Most Read Contributor in Australia, December 2018

Secure Parking Pty Ltd v Woollahra Municipal Council [2016] NSWCA 154:

Last year Woollahra Council successfully brought a claim against Secure Parking in relation to Secure's refusal to proceed with a Tender for car park management of four of its car parks.1


The Request for Tender (RFT) was issued by Council in November 2010. Secure Parking Pty Ltd (Secure) lodged its tender and was notified on 15 March 2011 that the Council had accepted their tender. It was the Council's position that on 15 March 2011 it had made a binding contract with Secure for the management of the car parks and Secure disputed this. Having terminated the month-to-month arrangements that the parties were operating under since 2009, the Council gave notice on 9 March 2012 that it proposed to terminate the contract for repudiation unless Secure acknowledged the existence of that contract and commenced to perform its obligations under it. Secure refused to do this and the Council terminated the contract with immediate effect. The Council then brought proceedings seeking a declaration as to the existence of that contract and claiming damages. The Council also alleged that Secure had engaged in misleading and deceptive conduct before and during the tender process by representing, contrary to its true intentions, that it would enter into the contract if its tender was accepted.

Primary Decision

At first instance the primary judge upheld the Council's claim that a contract was made on 15 March 2011. His Honour held that the contract was on the terms of the draft management agreement, which formed part of the Invitation for Tender, as varied in relation to the Initial Bank Guarantee Amount for each car park. It was held that Secure's refusal to accept the existence of a contract allowed the Council to terminate that contract for repudiation and damages were awarded in the amount of $5,462,421. The primary judge rejected Secure's claim that the Council had engaged in misleading and deceptive conduct by not disclosing the details of a redevelopment to the car park as there could be no reasonable expectation of disclosure.


Binding contract on 15 March 2011?

The Council contended that following the tender process the parties were content to be bound immediately and exclusively by the terms on which they had agreed, whilst at the same time expecting to make a further contract in substitution, containing additional terms by consent. This is a class of binding heads of agreement which has been recognised by the Courts.2

Upon issuing a tender the Council provided prospective contractors with a draft management agreement, having a "DRAFT" water-mark on each page. The senior executives of Secure believed that because the version was marked "DRAFT", it was not in final form and, accordingly, Secure would be able to negotiate its terms if it was the successful tenderer. Clause 7 of the draft agreement required the successful tenderer to provide bank guarantees to the value of $155,000. After Secure submitted its tender the Council increased this amount to $577,500. To reflect the increase the Council sought to vary the draft agreement. The amendments to the agreement were set out in a letter from the Council's solicitors, however, whether the parties did actually agree to vary Secure's offer to increase the amounts of the bank guarantees was an issue of appeal.

In the opinion of the primary judge, the parties did agree to a variation of the terms of Secure's tender. This decision was reached following an analysis of the correspondence between the parties which demonstrated that the initial one month bank guarantee would be replaced by a two month performance bond. On appeal it was argued that the primary judge erred as his decision was based on an implied impression rather than an express acceptance or agreement with the new terms and conditions. Secure also argued that the primary judge erroneously proceeded on the basis of silence (ie. inaction) as constituting acceptance, which it cannot.

On appeal, the Court agreed with Secure's assertion that a reasonable bystander would not have regarded the conduct of the offeree, including this silence, as signalling acceptance. The mere exchange of emails indicating the possibility that the bank guarantee would be replaced by a performance bond was considered as a counter-offer, rather than an acceptance of a variation to the contract. It was not reasonable to proceed on the assumption that there was agreement to an increase in the bank guarantee as the terms of the tender purportedly accepted by the Council did not correspond with the terms offered by Secure.

Further, the parties accepted that it was necessary that they reach consensus as to the date on which Secure's management should commence. The terms of the draft management agreement confirm that the commencement date was to be a calendar date, rather than an event occurring on an unknown or uncertain date. It was also agreed between the parties that management of the carpark should not commence until the installation of car parking equipment had occurred. This ground of appeal was accepted as it was held that the primary judge had erred in concluding that a commencement date could be inferred from negotiations. The absence of any consensus between the parties as to a certain, fixed date for commencement was further reason to conclude that there was no binding contract for the management of the car parks between the parties.

The Court also rejected the argument that the parties intended to be bound immediately with the expectation that a further contract would be made. A conclusion that the amended agreement reflected the final terms of the contract was incorrect as the document included substantive changes which had not been agreed to by Secure. Neither the draft management contract nor the amended management contract could be regarded as forming part of the Council's acceptance of Secure's tender offer. Accordingly it was held that the parties had not satisfied the necessary 'offer and acceptance' requirements of a binding contract.

Council's entitlement to terminate

Secure submitted that the Council was not entitled to terminate the contract made on 15 March 2011 because the Council was not ready and willing to perform the contract. A party seeking to terminate an agreement on the basis of renunciation by the counter-party must establish that, up to that time, it was ready and willing to proceed with the contract and to perform the agreement for its part.3 Secure contended that when Council sought to terminate the contract, it was insisting on performance of the amended management agreement which included further changes that had not yet been consented to. It was argued that the primary judge erred in finding that the Council's continued insistence that Secure execute the amended management agreement did indicate a readiness and willingness to enter the contract. The Court of Appeal accepted Secure's argument and held that the Council was not willing and ready to perform the contract it sought to terminate, but rather was ready and willing to perform a varied contract that had not yet been agreed.

Misleading and Deceptive Conduct

Secure's claim also included an allegation that the Council engaged in misleading or deceptive conduct by failing to disclose the proposed redevelopment of one of the car parks which would increase the number of available parking bays from 110 to 500. The primary judge rejected this argument as Secure could not have had a reasonable expectation that Council would disclose all information in relation to the competitive threats or economic viability of the car parks. The disclosure of information was not required as the Council had published a considerable amount of information about the redevelopment on its website and it could have reasonably expected that anyone interested in the information would have been able to locate it. The Court of Appeal confirmed the decision of the primary judge in finding that there could be no reasonable expectation that all information would be disclosed directly to tenderers by the Council's representatives. As such, the Council did not engage in any misleading or deceptive conduct.

On appeal, the Council also cross-claimed that Secure engaged in misleading or deceptive conduct by representing that, in the event that its tender was successful, it intended to enter into an agreement to manage car parks from 1 June 2011. It was alleged that by making this representation, Secure engaged in misleading or deceptive conduct because, contrary to its representation, Secure's senior executives believed that the terms of the agreement could be negotiated if Secure's tender was accepted. The Court of Appeal recognised that the absence of a capacity or intention to perform a contractual promise may potentially give rise to misleading or deceptive conduct.4 Despite this, the facts of the case demonstrated that the correct appreciation of the content of the obligations set out in the draft management agreement did not amount to a representation that the parties would be bound to any contract. As such, there was no merit in an argument that the senior executives of Secure had an alternate intention in relation to the management agreement and therefore did not engage in misleading or deceptive conduct.


This is an important decision in the developing law in relation to tenders and contract formation in Australia. It provides guidance on the extent to which an RFT needs to be complete in order for it to be enforced, as well as potential claims for misleading and deceptive conduct open to all parties to a tender process.


1 Woollahra Municipal Council v Secure Parking Pty Ltd [2015] NSWSC 257

2 See Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310, 317; G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631, 634-635.

3 Foran v Wight (1989) 168 CLR 385.

4 HWT Valuers (Central QLD) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Scott Alden
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions