AMT Helicopters Pty Ltd v Brisbane City Council & Ors [2000] QSC 53

SUPREME COURT OF QUEENSLAND CITATION: AMT Helicopters Pty Ltd v Brisbane City Council & Ors [2000] QSC 053 PARTIES: AMT HELICOPTERS PTY LTD (Plaintiff) v BRISBANE CITY COUNCIL & ORS (Defendant) FILE NO/S: SC No 12023 of 1998 DIVISION: Trial Division DELIVERED ON: 17 March 2000 DELIVERED AT: Brisbane HEARING DATE: 15, 16, 17 September 1999 JUDGES: Wilson J ORDER: Application dismissed CATCHWORDS: ADMINISTRATIVE LAW – JUDICIAL REVIEW – PROCEDURAL FAIRNESS – BREACH OF NATURAL JUSTICE – decision to accept tender – one local authority acting on behalf of three others – whether decision affected by reasonable apprehension of bias – business association between successful tenderer and first mentioned local authority. Judicial Review Act 1991 (Qld) s 4, Part 3, Part 5 Local Government Act 1936 (Qld) s 19B, s 32(1) Freedom of Information Act 1992 (Qld) Local Government Act 1993 (Qld) s 9, s 481, s 490 City of Brisbane Act 1924 (Qld) s 45(1) Livesey v New South Wales Bar Association (1983) 151 CLR 288, followed Re Polites; Ex parte Hoyts Corporation Pty Ltd (1991) 173 CLR 78, followed Re Finance Sector Union of Australia; Ex parte Illation Pty Ltd (1992) 66 ALJR 583, followed CP Ventures Pty Ltd v McKeon & Anor (1999) 32 ACSR 660, followed Kioa v West (1985) 159 CLR 550, followed Annetts v McCann (1990) 170 CLR 596, followed Chu v Minister for Immigration (1997) 78 FCR 314, followed White Industries Limited v The Electricity Commission of New South Wales [1987] NSWSC No 25212 of 1987; 20 May -- 1 of 20 -- 2 1987, considered and applied KC Park Safe (Brisbane) Pty Ltd v Cairns City Council [1997] 1 Qd R 497, followed General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164, followed Haoucher v Minister for Immigration and Ethnic Affairs (1989-90) 169 CLR 648, considered COUNSEL: Mr J.A. Logan for the Applicant Mr M.D. Hinson S.C. for the First Respondent Mr D. P. O’Brien for the Second Respondent Mr A. N. S. Skoien for the Third Respondents SOLICITORS: Tobin Lawyers for the Applicant Brisbane City Legal Practice for the First Respondent Bruce Simpson & Associates for the Second Respondent Shire Solicitor, Pine Rivers Shire Council for the Third Respondents [1] WILSON J: This application concerns the decision of the Brisbane City Council (the first respondent) to award McDermott Aviation Pty Ltd (the second respondent) a contract in respect of the aerial application of mosquito larvicide within areas administered by the Redcliffe City Council, the Pine Rivers Shire Council and the Caboolture Shire Council (the third respondents). The applicant (AMT Helicopters Pty Ltd) seeks a statutory order of review under Part 3 of the Judicial Review Act 1991 as well as review under Part 5 of that Act – Prerogative Orders and Injunctions. [2] Grounds of application The grounds relied upon may be summarised as follows: (a) breach of natural justice – reasonable apprehension of bias; (b) that procedures required by law were not observed – namely those which ensured open and effective competition and ethical behaviour and fair dealing; (c) improper exercise of power – a failure by the first respondent to take into account relevant considerations, namely its own unsuitability to administer tenders for the contract because of its allegedly undisclosed “commercial alliance” with the second respondent, and the obligation which each of the third respondents would have had to observe, had they let the tender themselves, to ensure procedures -- 2 of 20 -- 3 were observed which ensured open and effective competition and ethical behaviour and fair dealing. [3] Objections to Evidence At the outset counsel for the applicant raised a number of objections to evidence. 1. Upon objection being taken by the applicant to the following passages in the affidavit of John Andrew McDermott sworn on 9 July 1999 and filed on behalf of the second respondent, counsel for the second respondent did not seek to uphold their admissibility: • page 3 paragraph 7 last sentence, • page 12 paragraph 24 – the sentence beginning “In light… ”, • page 13 paragraph 26 – the sentence beginning “It is apparent… ”, • page 20 paragraph 41. 2. Objection was taken to the following passage in Mr McDermott’s affidavit on the ground of irrelevance – page 10 paragraph 22 after the clause “I was walking along the boardwalk in Cairns”. The passage details a conversation between Mr McDermott and Mr Tomkins after the calling of tenders. Counsel for the second respondent submitted that it is relevant to refute an allegation of collusion between the first respondent and the second respondent in the organisation of the tender. However, as I shall describe below, the applicant’s case rests on apprehended bias, not collusion. I consider that the objection has been well taken, and I uphold it. 3. The applicant also objected to the following passage in the affidavit of Darryl McGinn sworn on 26 July 1999 and filed on behalf of the first respondent – page 17 the paragraph beginning “Insofar as Councillor Boulton… ” on the ground that it is argumentative. The passage is apparently intended as a response to part of what Mr Tomkins said that Cr Boulton told him some time after the meeting of the NEMMO Committee on 2 September 1998. In my view the passage in Mr Tomkin’s affidavit is no more than evidence that he was told certain things; it is not evidence of the truth of what he was told. In these circumstances the passage in Mr McGinn’s affidavit to which objection has been taken is indeed argumentative. I uphold the objection. -- 3 of 20 -- 4 [4] The NEMMO Agreement By an agreement dated 8 August 1989 and subsequently varied by a deed made in 1995 (“the NEMMO agreement”), the first and third respondents and the Federal Airports Corporation established a committee to be known as the North-East Moreton Mosquito Control Committee (“the NEMMO Committee”). It consisted of five members, one of whom should be appointed by each of the Councils from among their elected representatives and one of whom should be appointed by the Corporation. The rights and obligations of the Federal Airport Corporation under the agreement and its position on the committee were subsequently assumed by the Brisbane Airport Corporation. Nothing turns on that change. [5] At all material times Cr Alan Boulton, the Mayor of Redcliffe, chaired the NEMMO Committee and its other members were Cr Denise Herbert (Brisbane City Council), Cr Chris Monsour (Pine Rivers Shire Council), Cr John McNaught (Caboolture Shire Council) and a representative of Brisbane Airports Corporation. Various officers of the Councils, consultants and representatives of Government departments were in attendance at the meetings. These persons included Mr Darryl McGinn, an officer of the Brisbane City Council, Mr John Nerney, an officer of the Redcliffe City Council, and Dr Brian Kay of the Queensland Institute of Medical Research. [6] The Committee’s principal function was to determine a mosquito control program for certain salt marsh mosquito breeding areas. A quorum was constituted by three members. Each member present had a deliberative vote on each question to be decided, and in the event of an equality of votes the member presiding had also a casting vote. [7] The agreement provided for the appointment of a Co-ordinating Local Authority responsible to the Committee, and through the Committee to the Councils and the Corporation for the implementation of the program. The Co-ordinating Local Authority was to invite tenders and might enter into contracts pursuant to s 19 of the Local Government Act 1936 for the purchase, supply and aerial application of the necessary larvicide in accordance with the program. The Co-ordinating Local -- 4 of 20 -- 5 Authority was not to accept a tender or enter into a contract except in accordance with a recommendation of the Committee. [8] At all material times the first respondent was the Co-ordinating Local Authority, and there were two contracts – one for such work in the local authority area of the first respondent and one for such work in the third respondents’ local authority areas. For some 8 years until 1998 the applicant was the contractor in the third respondents’ local authority areas. But for the period 1992-93 (when the applicant was the contractor), the second respondent was the contractor in the first respondents’ local authority area. [9] The calling of tenders was discussed at meetings of the NEMMO Committee in January, April and May 1998. There were to be two contracts covering different areas as discussed above. Consideration was given to specifying turbine powered aircraft for both, but it was decided that only the Brisbane contract should specify such aircraft. Tenders were called on or about 21 July 1998 and closed on 14 August 1998. [10] The applicant and the second respondent tendered for both contracts. The second respondent won both. [11] The business relationship between the first respondent and the second respondent is at the heart of the alleged apprehension of bias. [12] Mosquito and Pest Services At all material times the first respondent adopted a “purchaser/provider” model for the supply and delivery of services. Within its administration responsibility was split between program managers (purchasers) responsible for the regulatory, policy and long term planning associated with the delivery of services, and service deliverers (providers) organised as far as possible on commercial lines and responsible for management and delivery of specific services purchased on behalf of the Council by the program managers. [13] Mosquito and Pest Services (“MPS”) was one of the providers. It was treated internally as a separate business, but in reality it had no separate legal status. It was -- 5 of 20 -- 6 run on commercial lines and Mr Darryl McGinn was its Business Manager. It provided services not only to the first respondent, but also to legally distinct, external customers. For example, in January 1998 it did work in Townsville after flooding and in February, March and April 1998 it did work for the Olympic Co- ordination Authority at Homebush. Those engagements were disclosed at the NEMMO Committee meetings on 28 January 1998 and 8 April 1998 respectively. On each occasion helicopter services were provided by a subcontractor, and at least on the second occasion the Committee was expressly told that the second respondent was the subcontractor. [14] The first respondent had a corporate plan for 1998-2000. One of the strategies outlined in it was the creation of “partnerships and investment opportunities”. MPS’s business plan for 1998-2001 conformed with the overall strategy. It espoused “partnering and joint ventures” as a “business aim”. Under the heading “Business Growth” the following appeared:- “3.3 Strategic alliances Develop and trade-in-partnership with two (2) external businesses by January 1999.” [15] A promotional brochure entitled “Mosquito and Pest Services” was in evidence. It contained a number of photographs including a group shot captioned “John McDermott owner McDermott Aviation, Darryl McGinn Business Manager MPS, Professor Brian Kay” and others depicting (inter alia) the second respondent’s equipment, the Townsville floods and the Olympic site at Homebush. On page 3, under the group shot, the following appeared:- “An Overview of the Strategic Groups within Mosquito and Pest Services Mosquito and Pest Services is a commercial alliance between three groups, bringing their combined knowledge, expertise and years of experience together. -- 6 of 20 -- 7 • Brisbane City Council’s Mosquito and Pest Services • McDermott Aviation, and • Professor Brian Kay These partners have worked closely together on a variety of projects over the last ten years.” There was then a page of information about each of the three and other promotional content. I am satisfied that there never was and that there never was intended to be any “partnership” in the strict legal sense. At most the relationship between the first and second respondents was that of contractor-subcontractor, and Professor Kay was a consultant to the first respondent. [16] The brochure was in preparation from about the middle of 1998 and subsequently distributed along with other promotional material at a conference on the Gold Coast in September that year. The photographer was engaged in early July and the photographs were taken later that month. Mr McDermott supplied information about the second respondent in early August, from which the material in the brochure about it was compiled. [17] Unbeknown to the applicant the brochure was being prepared with the active participation of Mr McGinn and Mr McDermott during the period between the calling and closing of tenders. Indeed there was a conversation about the schedule of rates for aerial spraying between Mr McGinn and Mr Tomkins of the applicant the day before the tenders closed, but no mention of the preparation of the brochure or of the “commercial alliance” described in it. [18] When the tenders were received, prices and hectares per hour were quoted for the application of various chemicals. The second respondent’s tender was submitted under cover of a letter highlighting features of their aircraft, and it contained two sets of prices, the higher of which would apply if it were successful only in relation to the contract for the third respondents’ local authority areas and the lower of which would apply if it were successful also with respect to the contract for the first respondent’s area. -- 7 of 20 -- 8 [19] Mr McGinn copied the tenders and distributed them to the members of the NEMMO Working Group, a technical advisory body comprised of an officer from each of the 4 Councils. The Working Group met on 20 August 1998. Mr McGinn swore that he told the Group members that there had been previous contacts between the first respondent’s MPS and the second respondent in relation to work in Townsville and Sydney (something already known to the NEMMO Committee) and that he would not participate in the evaluation of the tenders. He deposed to having no further involvement with the tenders (other than inquiring as to when the Group’s recommendation would be finalised) before the NEMMO Committee meeting on 2 September 1998. [20] The tenders were considered at a meeting of the NEMMO Committee on 2 September 1998. The day before the meeting Cr Boulton had received a memorandum from Mr Nerney, Redcliffe City Council’s Manager, Environmental Services, analysing the price differential between the two tenders for the third respondents’ areas and recommending acceptance of the second respondent’s tender. The meeting was attended by Cr Boulton (Redcliffe), Cr Monsour (Pine Rivers), Cr Herbert (Brisbane), Cr McNaught (Caboolture) and Mr Overton (Brisbane Airports Corporation). Others in attendance included Mr Nerney (Redcliffe), Mr McGinn (Brisbane – MPS) and Dr Kay. The minutes record the decision to award the contract for the Brisbane area (contract W5/98/99) to the second respondent - “6.2 Aerial Contracts The details of the tenders (closed 14/08) were discussed. AMT and McDermott responded to both contracts. The group decided to first discuss the Brisbane City Council Aerial Contract. After discussion the following motion was put forward. ‘That the North East Moreton Mosquito Organisation approve the awarding of Contract W.5/98/99 (Supply and Delivery of Aerial Application of Mosquito Larvicide within the Brisbane City Council Area) to McDermott Aviation Pty. Ltd.’ Moved Cr. Denise Herbert, Brisbane City Council and seconded by Mr Justin Overton, Brisbane Airport Corporation.. Carried” The minutes go on - -- 8 of 20 -- 9 “The group then discussed the tenders for the Redcliffe, Pine Rivers and Caboolture aerial contract. The group discussed various items about the two tenders received and John Nerney pointed out the following: 1) Year 2000 compliance is this linked into contract 2) That there was a price difference between the two Aerial Contracts. At a later stage do we want to have both contracts as one overall contract with all NEMMO members getting the same price. Cr Alan Boulton asked if one contractor is awarded both contracts can they meet the window of opportunity to treat all areas. The performance clauses of the contracts were discussed and the group decided that NEMMO must enforce service and quality provisions of the Contract. Brett Maddill questioned what contingency plans do we have? Darryl McGinn said that a Risk Management Plan would need to make sure that we have strategies in place to maintain that we can still complete treatments if something unforseen should happen to contractors for either obtaining helicopter services or product delivery and availability. Actions Form a working group to identify all the risks and have a Contingency Risk Management document that covers aerial application, supply of product and DGPS. The working group will then present a draft document to NEMMO within the next two meetings. After further discussion about the tenders for the Redcliffe, Pine Rivers and Caboolture Aerial Contract the following motion was put forward. ‘That the North East Moreton Mosquito Organisation approve the awarding of Contract W.6/98/99 (Supply and Delivery of Aerial Application of Mosquito Larvicide within the Areas of Redcliffe City Council, Pine Rivers Shire Council and Caboolture Shire Council) to McDermott Aviation Pty. Ltd.’ Moved Cr. John McNaught, Caboolture Shire Council and seconded Cr. Chris Monsour, Pine Rivers Shire Council. Carried” -- 9 of 20 -- 10 The minutes were confirmed without amendment at the next meeting of the Committee. [21] In the evidence before me there was conflict as to whether Cr Herbert abstained from voting on the motion with respect to contract W6/98/99. Cr Boulton had been a member of the NEMMO Committee for about 8 years and was chairman of the committee at the relevant time. He said in cross-examination that he had no clear recollection of her actions at the time; he thought the minutes would have recorded her abstention if that was what had occurred; he thought the decision had been unanimous. Later in re-examination he said that in the ordinary course an abstention would be recorded, but he could not recall any occasion when a decision had been made other than unanimously. Then he qualified this by saying that he did not think an abstention would be recorded unless that were specifically requested. Mr McGinn’s evidence was that Cr Herbert had abstained from voting, although this had not been recorded in the minutes. The following occurred during the course of his cross-examination:- “An abstention, I suggest, in NEMMO proceedings, meeting proceedings, is very unusual?-- No, that’s not correct. HER HONOUR: By ‘abstention’ do you mean in the circumstances that the Brisbane City Council representative simply didn’t vote or that representative said expressly, ‘I am abstaining from voting.’?-- The words were to the effect from Councillor Herbert that – and this is directed to the other NEMMO members – ‘This is your contract, it has nothing to do with us. We will play no part’. MR LOGAN: That is different from abstaining from voting, isn’t it?-- When the vote was called by Councillor Boulton there was no response from Brisbane City Council in terms of supporting the motion. Did the other councils abstain from voting in relation to Brisbane’s contract?-- They did. So Brisbane’s contract was really just passed, was it with ----- HER HONOUR: One vote. MR LOGAN: The vote of Airports Corporation and Brisbane?-- That is correct.” -- 10 of 20 -- 11 [22] Mr McGinn’s evidence in this respect was fanciful and inconsistent with the minutes. I accept Cr Boulton’s evidence, and find that the decision was made without dissent and without abstention. [23] Mr Tomkins, the applicant’s director, learnt of the Committee’s decision informally in September 1998. On the evidence there was some difference as to the circumstances in which he gained that knowledge, but I do not think it necessary to resolve that difference. Subsequently he met with Cr Boulton who confirmed that the Committee had selected the second respondent as the contractor for the third respondents’ areas. The applicant invoked provisions of the Freedom of Information Act 1992 to obtain copies of relevant documents and called on the first respondent to refrain from making a decision on the tender. [24] The Committee’s decision was routinely considered at various levels within the first respondent, and then on 8 December 1998 it was formally adopted at a Council meeting. The second respondent was advised of the decision by letter dated 10 December 1998, and the applicant was advised that it had been unsuccessful by letter dated 15 December 1998. [25] The applicant sought relief under both Part 3 and Part 5 of the Judicial Review Act. In either case the relief sought was a declaration that the decision was invalid and an order setting it aside. Insofar as relief was sought under Part 5 it was not necessary for the decision to be a “decision to which this Act applies” within the meaning of s 4, and having regard to the way the case was argued I do not propose to discuss that issue. [26] The first ground relied upon was apprehended bias – that a moderately informed, fair minded bystander might have entertained a reasonable apprehension that the first respondent might not bring an impartial and unprejudiced mind to the making of the decision: Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293-94; Re Polites; Ex parte Hoyts Corporation Pty Ltd (1991) 173 CLR 78 at 85; Re Finance Sector Union of Australia; Ex parte Illaton Pty Ltd (1992) 66 ALJR 583 at 583; CP Ventures Pty Ltd v McKeon & Anor (1999) 32 ACSR 660 at 667. -- 11 of 20 -- 12 [27] The applicant contended that there was an obligation to accord procedural fairness in the making of the decision. This was conceded by the first respondent, but disputed by the second and third respondents. It is well established that the rules of natural justice apply in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention: Kioa v West (1985) 159 CLR 550; Annetts v McCann (1990) 170 CLR 596 at 598-99. The obligation stems from the common law and not from any implied legislative intent: see the discussion in Aronson M and Dyer B (1996) Judicial Review of Administrative Action LBC, Sydney at pages 116-118 and the cases cited therein. The content of the rules is variable and to a considerable extent is sensitive to the scope and purpose of the legislative scheme in question. Generally less is expected of an administrative decision-maker than is expected of someone acting in a judicial or quasi-judicial role: Chu v Minister for Immigration (1997) 78 FCR 314 at 338. [28] It is necessary to examine the subject matter of the power being exercised and the nature of the complainant’s interest in that subject matter. [29] The first respondent was authorised to enter into the NEMMO agreement by ss 32(1) and 19B of the Local Government Act 1936, which was in force when the agreement was made. The power in question is the selection of a contractor to perform work in the third respondents’ local authority areas. Clause 6(1) of the NEMMO agreement, as amended by the Deed of Variation made in 1995, provides:- “(1) For the purpose of carrying out the Mosquito Control Program the Co-ordinating Local Authority shall invite tenders and may enter into a contract or contracts under Part 3 of Chapter 6 of the Local Government Act 1993 for the purchase, supply and aerial application of the necessary larvicide in accordance with the Mosquito Control Program.” The role of Co-ordinating Local Authority has not always been fulfilled by the first respondent. Part 3 of Chapter 6 of the Local Government Act 1993, which is headed “Contracts and Tendering,” does not apply to the first respondent: see s 9 of the same statute. Its provisions include s 481 (Principles governing the making of contracts) and s 490 (Acceptance of tender or quotation). The first respondent’s -- 12 of 20 -- 13 obligations with respect to contracts and tendering are found in Part 2 Division 12 of the City of Brisbane Act 1924. They are not expressed in identical terms. Significantly for present purposes neither expressly excludes the principles of natural justice if they are otherwise applicable. [30] There are authorities supporting the proposition that the nature of the power to contract by the acceptance of any one of a number of tenders is inconsistent with an obligation to observe the principles of natural justice: for example, White Industries Limited v The Electricity Commission of NSW [1987] NSWSC No 25212 of 1987; 20 May 1987 at 31-32, and that when the Crown contracts, it exercises its own prerogative power, and subject to any statutory provisions, the making and breaking of such contracts are not matters for judicial review: KC Park Safe (Brisbane) Pty Ltd v Cairns City Council [1997] 1 Qd R 497 at 501; General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164 at 172-73. [31] As Thomas J observed in the KC Park Safe case at page 501, the question of amenability to judicial review may be different in the case of local authorities which depend almost entirely upon statutory sources for their powers. There his Honour dealt with claims for interlocutory relief in a judicial review application. The decisions sought to be reviewed put an end to negotiations under an earlier tender process and authorised the calling of fresh tenders for an altered type of project. His Honour made some observations upon the entitlement of a tenderer to a local government to procedural fairness in the circumstances at 501-2. In that case it was submitted that as the applicant incurred some expenditure during the extended negotiations, the situation was one where legitimate expectations were raised that the respondent would not withdraw from negotiations without giving the applicant an opportunity of stating its case why the respondent should not do so. His Honour described this as a “slender point.” He discussed some of the authorities relating to legitimate expectations and went on at page 505:- “The term ‘legitimate expectation’ has been considered by the High Court in Heatley v Tasmanian Racing and Gaming Commission (1977) 137 C.L.R. 487, FAI Insurances Ltd v Winneke (1982) 151 C.L.R. 342, 370, Salemi v MacKellar [No. 2] (1977) 137 C.L.R. 396, and in Kioa above, to mention only a few. The scope of the term is, I think, deliberately left wide so that courts may intervene in appropriate cases, but no so wide as to unnecessarily inhibit ordinary -- 13 of 20 -- 14 reasonable activities by governments and by statutory authorities. It seems to me that the authority’s right to reject is an essential part of the process of tendering, and that every tenderer knows this. Section 404(3) expressly confers such a power. Also virtually every tender involves the tenderer in a degree of expense, and in the usual course such expenses are something that the tenderer must be prepared to forgo. That is not to say that tenderers are not entitled to fair play, but the rules of the game are fairly basic ones. From the tenderer’s point of view it is something of a gamble and the tenderer is looking for a valuable benefit. Even conduct raising the tenderer’s hopes will not necessarily deprive an authority of the right of summary rejection. In the present case the Council, although not obliged to do so, kept negotiations alive until 30 April. There was no promise that even if the applicant provided evidence of financial backing by that date the Council would grant a contract to it. It was the grant of an opportunity to overcome one particular stumbling block. Even so, the production of such evidence is not necessarily an easy or cost- free process, and in my view the limits of any arguable case of legitimate expectations are that the Council would take that factor into account before any final cessation of negotiations. The arguable component of the Applicant’s case is in my view as narrow as this.” [32] In the present case counsel for the applicant submitted that his client had a legitimate expectation that the tender process would be run according to its published basis – that is, that the two contracts were disjunctive. He went on to submit that that was not in fact how it was run. I have considerable doubts whether that can be described as a legitimate expectation as that expression has been used in the authorities. In Haoucher v Minister for Immigration and Ethnic Affairs (1989- 90) 169 CLR 648 McHugh J discussed legitimate expectations at pp 679-82. He said:- “Decisions of this Court establish that, subject to any contrary statutory intention, a person is entitled to be heard in opposition to the proposed exercise of a statutory power if its exercise will deprive him or her of a benefit or privilege which that person has a legitimate expectation of obtaining or continuing to enjoy: Heatley v Tasmanian Gaming and Racing Commission (1977) 137 C.L.R 487; FAI Insurance Ltd v Winneke (1982) 151 C.L.R 342; Kioa v West (1985) 159 C.L.R 550. … … … .The introduction of the concept of legitimate expectation into public law extended the range of protection given by the -- 14 of 20 -- 15 common law rules of natural justice. Prospective, as well as existing, rights, interests, privileges and benefits are now within the domain of natural justice. Just as the common law has traditionally given a person a right to be heard before the exercise of a statutory power prejudices any of his or her existing rights or interests, so the common law now gives a person the right to be heard before the exercise of a statutory power prejudices some right, interest, privilege or benefit which that person can legitimately expect to obtain or enjoy in the future… … … … … … … … A legitimate expectation that a person will obtain or continue to enjoy a benefit or privilege must be distinguished, however, from a mere hope that he or she will obtain or continue to enjoy a benefit or privilege. A hope that a statutory power will be exercised so as to confer a benefit or privilege does not give rise to a legitimate expectation sufficient to attract the rules of natural justice: South Australia v O’Shea (1987) 163 C.L.R 378 at 402. To attract the operation of the rules of procedural fairness, there must be some undertaking or course of conduct acquiesced in by the decision- maker or something about the nature of the benefit or privilege which suggests that, in the absence of some special or unusual circumstance, the person concerned will obtain or continue to enjoy a benefit or privilege.” [33] Although the point was not argued fully, it may be that the applicant had some legitimate expectation arising from its having hitherto been the contractor in the third respondents’ local authority areas. See White Industries Limited v The Electricity Commission of NSW at page 32. [34] It is not necessary for me to consider this aspect further, because I am not satisfied that the first respondent’s decision was tainted by an apprehension of bias. [35] The moderately informed bystander could be expected to be aware of the following:- (a) the NEMMO agreement and the first respondent’s role as the Co- ordinating Local Authority; (b) that for 8 years until 1998 the applicant was the contractor in the third respondents’ local authority area; -- 15 of 20 -- 16 (c) that but for the period 1992-93 (when the applicant was the contractor) the second respondent was the contractor in the first respondent’s local authority area; (d) that the first respondent’s MPS provided services to external customers in different parts of the country, and that it had worked with the second respondent in doing so; (e) that tenders had been called for two distinct contracts – one for the Brisbane area and one for the Redcliffe, Pine Rivers and Caboolture areas; (f) that a brochure promoting Mosquito and Pest Services as a “commercial alliance” between the first respondent’s MPS, the second respondent and Professor Kay, and describing them as “partners” who had “worked closely together on a variety of projects over the last ten years” was in preparation. [36] Of those facts, it was only the preparation of the brochure which was not revealed. Given the well known pre-existing business relationship between the first and second respondents, the fact that such a brochure was being prepared could itself hardly have given rise to a perception of bias on the part of the first respondent, and it could have added little if anything to any perception of bias which might have arisen had the other factors not been known to the members of the Committee. An examination of the whole brochure does not suggest any new or different relationship between the first and second respondents. In the circumstances the proceedings at the NEMMO Committee meeting were not tainted by an apprehension of bias, and there was nothing untoward about Cr Herbert voting on the relevant motion. [37] The brochure was completed and distributed at a conference on the Gold Coast between the meeting of the NEMMO Committee on 2 September 1998 and the formal decision of the first respondent on 8 December 1998. The first respondent did not exercise any further independent discretion in the selection of the successful tenderer. The real decision had been made by the NEMMO Committee and thereafter the first respondent resolved to accept the second respondent’s tender in fulfilment of its obligation under the NEMMO agreement. -- 16 of 20 -- 17 [38] The second ground in the application was failure to observe procedures required by law in relation to the supply of services to the third respondents, namely procedures which ensured open and effective competition and ethical behaviour and fair dealing. [39] Sections 481 and 490 of the Local Government Act 1993 provide:- “Principles governing the making of contracts 481. In entering into contracts for the carrying out of work, or the supply of goods or services, a local government must have regard to the following principles – (a) open and effective competition; … … … … … (e) ethnical behaviour and fair dealing. Acceptance of tender or quotation 490. (1) If a local government decides to accept a tender or quotation, it must accept the tender or quotation most advantageous to it. (2) In deciding the tender or quotation most advantageous to it, the local government must have regard to the principles mentioned in section 481 (Principles governing the making of contracts). (3) However, a local government may decide not to accept any tender or quotation available to it”. [40] Section 45 of the City of Brisbane Act provides:- “Acceptance of tender or quotation (1) If the council decides to accept a tender or quotation, it must accept the tender or quotation most advantageous to it. (2) The tender or quotation accepted need not be the cheapest. (3) The council may decide not to accept any tender or quotation available to it”. [41] The impugned decision is that of the first respondent. In my view the provisions of the City of Brisbane Act dealing with tenders and quotations (ss 42-46) apply only to contracts for the supply of goods or services to the first respondent or the disposition of its property. In particular s 45 (1) of that Act did not apply to it in accepting the tender as the Co-ordinating Local Authority under the NEMMO agreement. It is not necessary to adopt the somewhat strained approach suggested -- 17 of 20 -- 18 by counsel for the first respondent in reply - that in the circumstances of this case the tender most advantageous to the first respondent was the one that did not put it in breach of its obligations to the other parties to the NEMMO agreement. [42] Nor was the first respondent bound by s 481 of the Local Government Act 1993. See s 9 of that Act. There is no like provision in the City of Brisbane Act. Accordingly the applicant fails on the second ground of the application. [43] The third ground of the application was the failure to take into account relevant considerations, namely – (i) the first respondent’s unsuitability to administer the tenders and to make the decision in respect of the awarding of the tender; and (ii) the obligation to observe procedures ensuring open and effective competition and ethical behaviour and fair dealing which the third respondents would have had to observe had they let the tenders themselves. [44] In my view the first respondent was not unsuitable to perform these functions, and I shall not repeat what I said when considering apprehended bias. At all times the applicant has alleged not actual bias but apprehended bias. There is no evidence from which it could be inferred that the first respondent failed to take into account the obligations which would have rested on the third respondents to have regard to principles of open and effective competition and ethical behaviour and fair dealing. The applicant fails on the third ground of the application. [45] Addendum After the preparation of these reasons for judgment, but before their delivery, the applicant applied to reopen the hearing so that the document which is Exhibit A to the affidavit of Myles Tomkins sworn on 15 March 2000 might be received into evidence. The first, second and third respondents did not object to this course, but submitted that the document did not advance the applicant’s case. -- 18 of 20 -- 19 [46] The document is a memorandum dated 14 December 1997 from Mr McGinn to Ms Christine Yates, then the personal assistant to the Director of Community Health within the first respondent’s Department of Health and Recreation. It provides: “SUBJECT: Business Initiatives: Mosquito and Pest Services Business initiatives associated with the work unit (outside normal supplier interactions) include: • … … … … • Discussions with McDermott Aviation Pty Ltd regarding possible partnership and leasing of aircraft used for mosquito control in Brisbane with possible contracts between Brisbane City Council and other councils for mosquito control aircraft supply. • … … … … • Contract administration for the North East Moreton Mosquito Organisation (NEMMO) with fees payable to BCC. • Discussions with the Mosquito Control Laboratory (soon to be moved to the State Govt’s Cooperative Research Centre) of the Queensland Institute of Medical Research for M & PS to supply operational capacity to QIMR in areas of external business consultancies. • … … … … ” Five other initiatives with different organisations were described. [47] In the applicant’s submission this document is relevant because it discloses that the first respondent was concerned to develop a relationship with the second respondent in relation to work for local authorities as far back as February 1997, and it underscores why the first respondent ought never to have determined the tender decision. The first respondent submitted that the first respondent’s attitude or intentions in February 1997 is not relevant to the actual relationship between the applicant and the second respondent in the period between the calling of tenders and the making of the decision (late 1998) and whether that relationship gave rise to a reasonable apprehension of bias. The second and third respondents adopted a similar stance. -- 19 of 20 -- 20 [48] In my view the whole of 1998 is relevant to this application. This document does no more than provide some background relating to an earlier time, and it adds little to what was already known by the members of the NEMMO Committee. Even if the moderately informed bystander were taken to have been aware of it, it would not have given rise to a reasonable apprehension of bias, either on its own or in combination with the other matters set out in paragraph 35 above. It does not cause me to alter my judgment. [49] The application is dismissed. -- 20 of 20 --