HOOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S vy DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY vy HOOKER CORPORATION LIMITED SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, PRIESTLEY and CLARKE JJA 18-22, 26-27 April 1988, 20 September 1988 [1988] NSWCA 67 Mahoney JA Hooker Corporation Limited (Hooker) and Harrahs have, in separate proceedings, claimed that a contract was made between them and Darling Harbour Authority (DHA) and the Honourable Kenneth George Booth (the Treasurer) for the erection and operation by them of a hotel and casino complex in the Darling Harbour area of the City of Sydney. They claim that the contract was repudiated by DHA and those associated with it (to whom I shall refer as the Government), that they have suffered loss from that repudiation, and that they are entitled to damages because of it. Alternatively, they claim recompense in respect of expense incurred by them in relation to the complex. The trial judge held: that there was no such contract; that the Government was not estopped from alleging there was no such contract; and that the plaintiffs are not entitled to recover in respect of the expense claimed. He therefore dismissed the plaintiffs' proceedings. DHA and the Attorney-General for the State of New South Wales have, separately, sued the plaintiffs and the Australia and New Zealand Banking Group Limited (the Bank) for damages and upon a bank guarantee given by the bank as part of the arrangements between them. The learned judge gave judgment for Hookers and Harrahs. The plaintiffs, the Government and the Attorney-General have respectively appealed to this court against his Honour's judgment. The proceedings were before the learned trial judge for some sixty four days. The appeal papers are voluminous. Judgment was given by his Honour on 4 December 1987. The hearing of the appeal to this Court commenced on 18 April 1988 and has extended over some seven days. The matters so far argued relate, as the court has been informed, to some only of the issues which may require to be determined in order that judgment be finally given upon the respective claims of the parties. In certain events, further argument may become necessary in relation to issues which to date have not been argued. In these circumstances, I shall: (1) state in outline the events which occurred leading to the plaintiffs' claim; (2) refer to the course which the proceedings have taken to date; (3) deal with the issues which, at this stage, are before this Court for decision; and (4) indicate the steps which, consequent upon the determination of those issues, are appropriate to be taken. 1. Outline of events 2 UNREPORTED JUDGMENTS An area of land near Darling Harbour in the City of Sydney became available to the Government and it contemplated the development of it. For this purpose, legislation was passed setting up DHA as a statutory authority to "promote, encourage, facilitate, carry out and control" the development of the land: Darling Harbour Authority Act 1984, s6, s9. DHA developed proposals for that development. Mr Alexander Carmichael was, at all relevant times, the General Manager of DHA and as such was responsible, as its Chief Executive Officer, for the management of its affairs, subject to and in accordance with any directions given to them by DHA. DHA developed proposals for such development. It contemplated, as part of the development, that there should be a complex involving a hotel and a casino. It envisaged that the complex would be erected and carried out by a private developer, that those concerned with the development would conduct a casino in the complex for an agreed period, and that the Government would, as the court has been told, derive from the casino thirty five percent of its gross revenue and accordingly derive considerable revenue from the complex. For the purpose of that part of the development, legislation was passed to facilitate the conduct of the casino: see Darling Harbour Casino Act 1986. In relation to the hotel/casino complex, it was necessary that, inter alia, three things be done: that procedures be set up for the selection of the persons in the private sector who were to build and operate the complex; that the structure of the transaction to be entered into between such persons and the Government be determined and that documents be drawn to give effect to it; and that the persons so selected be effectively bound to do what, under the transaction, they were to do. It will be convenient to outline what occurred by reference to these things. The selection of the Developer and Operator: It has been suggested in argument that what was done in the selection of Hooker and Harrahs is significant both because it constitutes parts of the surrounding circumstances to which reference may be made in interpreting and construing the obligations of the parties and because the actions of the Government are relevant both to construction of the documents used and the estoppels which the plaintiffs submit arose. The proposals for the hotel/casino complex envisaged that there would, in principle, be a developer responsible for the project and an operator responsible for the conduct of the casino. The proposals, as they were envisaged at an earlier stage, appeared to contemplate that the developer, or a subsidiary company, might be the operator of the casino. In the event, Hooker and Harrahs, with a body associated with Hooker, proposed to be the developer of the complex and Harrahs was to be the operator of the casino. Counsel have informed the court that Hooker and the body to be associated with it were to have a 92.5 per cent interest in the development and that Harrahs was to have a 7 1/2 per cent interest. Harrahs interest was, it has been said, subsequently reduced to five per cent. There were subsequently disagreements between Hooker and Harrahs as to the basis of Harrahs participation. It is sufficient for present purposes to record that, under the proposal made by the plaintiffs to the Government at the initial stage, Hooker and Harrahs undertook a joint and several liability in relation to the substantial aspects of the development. The formal selection commenced with a call by the Government for "Expressions of Interest". On 30 November 1985 the Government published advertisements relevantly in the following form: WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S 3 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) "Expressions of Interest Hotel/Casino/Office/Retail Development The New South Wales Government is revitalising Darling Harbour. This unique one billion redevelopment will be a mixture of privately and publicly funded projects. The publicly funded developments include... The Government now invites the private sector to put forward proposals for the development of an International Hotel, Casino, Office Building, Monorail Station and a Retail Development incorporating plazas and pedestrian areas as the major link between the central city area and the Darling Harbour development. The Darling Harbour Authority has undertaken some preliminary planning for the development of the site, however interested parties will be encouraged to creatively approach the development within overall guidelines. The New South Wales Government will hold the licence for the casino and no other licenced casino will be allowed to operate in New South Wales. The Government will rent the casino facility from the property owner. The casino will be managed on behalf of the Government by an experienced casino manager of high repute who meets strict requirements for obtaining and annually renewing a permit to operate a casino in New South Wales. Expressions of interest are now called from organisations or consortia with financial strength, development skills and operating skills, to design, finance, construct and operate the total development. Several parties, including Hooker and Harrahs, indicated interest in the proposal. Discussions took place with Hooker and Harrahs and with other interested parties. In due course, Hooker and Harrahs submitted a joint proposal to the Government and discussions took place between them and the Government in relation to it. On 3 April 1986 the Government published a short list of five interested groups. The Treasurer, on behalf of the Government, said: "The list was compiled by the Assessment Committee headed by the Chairman of the Darling Harbour Authority, Mr Alex Carmichael, and including representatives from the Treasury and the Premier's Department. The Treasurer said that 'he expected Cabinet to make a final decision on the applications by the middle of the year'." On 16 April 1986 the Treasurer made a further announcement. He said: Cabinet has also endorsed four review mechanisms to assist the Government in selecting a successful applicant from the short list of consortiums. Reports will be called for from the Auditor-General. A merchant banker will report on the commercial integrity and viability of the bidders. It will also assess the competitiveness of various financial returns to the Government and to the people of New South Wales. The Darling Harbour Quality Review Committee will report on architectural aspects of the development. The Police Board will report on the integrity of individuals involved in the development and operation of the Casino/Hotel complex. The Treasurer also said that: The legislation ensures that the government will have all the necessary powers and facilities to make sure that operations in the casino are completely above board, that no 4 UNREPORTED JUDGMENTS criminal elements or misconduct will be allowed to intrude, and that the people of New South Wales will be provided with an international-class casino of the highest calibre. In making the statements which he did, it is not in contest but that the Treasurer was speaking with the authority of the Government. A Cabinet Sub-committee had been set up of which the Treasurer Mr Booth was the Chairman. The Cabinet Sub-committee included Mr L Brereton, the Minister for Public Works. Its Secretary was Mr G Gleeson, the Secretary of the Premier's Department. An Assessment Committee had been constituted. Mr Alexander Carmichael was the Chairman of that committee. On 30 April 1986 Hooker and Harrahs lodged their joint proposal for the hotel/casino development. It is that proposal which, subject to modifications subsequently made to it, is the proposal which was the basis of the formal offer subsequently made to the Government by the plaintiffs. In due course, following discussions with those representing the parties who were then interested in the development, the Government prepared a series of documents. These were described in due course in the "Draft Documents for Darling Harbour Casino/Hotel Complex" as being: Explanatory memorandum Deed of offer Development agreement and agreement for lease Ground lease Casino operating agreement Casino lease, and Continuity agreement. The Explanatory Memorandum described the other documents and the part they were to play in relation to the transaction. The deed of offer provided for "the owner/developer" to covenant "in favour of DHA and the Treasurer", to "enter into, be bound by and perform" the other documents subject to the terms and conditions referred to in the deed of offer. I shall subsequently refer to these documents in more detail. On 13 June 1986 Hooker and Harrahs executed a deed of offer. Deeds of offer in similar terms were, the court has been informed, executed by other persons who remained on the Government's short list. On 24 June 1986 the New South Wales Cabinet determined that the Hooker/Harrah proposal should be that adopted for the development of the hotel/casino complex and that they should be notified accordingly. Approval was given by the Lieutenant Governor in Executive Council to that course. Formal notification was given to Hooker and Harrahs in accordance with the deed of offer. The selection of Hooker and Harrahs was announced by the Treasurer and Mr Brereton at a public press conference, in the presence of Mr Carmichael. Press releases were issued by the Treasurer and by Mr Brereton. The plaintiffs have placed emphasis upon the fact that their selection took place, not by an informal act but by a formal act of notification given in accordance with the terms of a Deed of Offer and that that notification and, presumably, the legal operation of it, was given pursuant to a formal approval given by the Lieutenant Governor in Executive Council. It is appropriate at this stage to refer to what was done in relation to the investigation of the integrity of the persons interested in the proposed development and, in due course, of the plaintiffs. The significance which that investigation had, if any, in relation to the legal effect of the acceptance of the plaintiffs' offer and their consequent selection for the purpose of the development has been put in various ways. And, whatever be the legal significance of the WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S & DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) investigation and the report which the Police Board ultimately made, those matters were put forward by the Government as being the reason, or one of the main reasons, why the Government determined not to proceed with the arrangements made with the plaintiffs. I shall therefore outline what happened. It had been in contemplation by the Government that because, inter alia, of the necessity to ensure that the gambling casino was properly conducted, it would be necessary to establish the integrity of the persons to be associated with it. As I have said, in his announcement of 16 April 1986, the Treasurer had said that "the Police Board will report on the integrity of individuals involved in the development and operation of the casino/hotel complex", and he had referred to the "power and facilities' which the Government had to ensure that the operations in the casino were "completely above board". On 2 May 1986 Mr G Gleeson, Secretary of the Premier's Department, wrote to Sir Maurice Byers, Chairman of the Police Board of New South Wales, a letter in the following terms: "I am writing to you in relation to the process for selecting a consortium to develop the hotel/casino at Darling Harbour and to establish and manage the Darling Harbour Casino. As you will be aware, a short list of five consortia have been selected as final contenders for the project. Cabinet decided at its meeting on 15 April 1986 that the Police Board be asked to provide a report, through the Police Commissioner, as to whether each of the consortia and the proposed Casino Manager are of sound repute, probity and integrity. The Darling Harbour Quality Review Committee will also be submitting a report on architectural aspects of the project, and the Auditor-General and a Merchant Bank will be reporting on the financial viability of the proposals and the proponents. The Government is keen to finalise this matter and would appreciate a report from the Board by 25 May 1986". On 2 May 1986 Sir Gordon Jackson, Acting Chairman of the Police Board, informed Mr Gleeson that the police Board would submit a report by 25 May 1986, but that that report "may turn out" to be "of an interim nature". On 6 May 1986 Mr Gleeson referred to Sir Gordon Jackson's letter and said that "The Government seeks the advice of the Board on this matter as a matter of very high priority". On the same day, Hooker and Harrahs were told, at a meeting with Mr Carmichael, that the police Board "is to look at the various proposals" and that details of all corporate entities involved, giving in the case of key corporate entities details of both the financial and managerial control, were required. On 9 May 1986 Hooker sent to Mr Carmichael information of the kind required, to be passed on by him to the Police Board. On 14 May 1986 Mr Gleeson again wrote to Sir Gordon Jackson. He informed him that: "The Casino Sub-Committee of Cabinet decided at its meeting on 12 May 1986 to request the Police Board to provide early advice in regard to the nominated Casino Managers". He attached information in relation to these and said: "Would you please advise as to whether there is any information available to indicate whether any of the attached parties may not be fit and proper to operate the Darling Harbour Casino". On 29 May 1986 Sir Maurice Byers wrote to Mr Gleeson informing him that, "in the time specified, it has proved impracticable to provide a meaningful report, interim or otherwise". His letter, upon which some reliance has, I think, been placed by the plaintiffs, was as follows: 6 UNREPORTED JUDGMENTS I refer to previous correspondence from the Acting Chairman of the Board, Sir Gordon Jackson, dated 2 May 1986 and your letters of 2 May and 14 May 1986 concerning the proposed Darling Harbour Casino and requesting the Board to report by 25 May. You will recall that Sir Gordon indicated in his letter that although inquiries would progress as quickly as possible, it may eventuate that the Board's report in response to your letter of 2 May would be of an interim nature. In the event, it has proved impracticable to provide a meaningful report, interim or otherwise. Upon receipt of you request, arrangements were made through the Commissioner to establish a Casino Investigation Team, drawing its experience from the Special Investigators attached to the Office of the Superintendent of Licences. The team is headed by Detective Chief Inspector W Collins, Officer in Charge of the Fraud Squad, and has available to it police involved in investigations in the amusement device industry. Preliminary inquiries indicate that there are a number of matters which need to be followed up concerning the reputation of individuals connected with the competing consortia and in any event, the magnitude of the task is enlarged by the number of consortia in the short list and the overseas investigations which will need to be undertaken. The Board notes that correspondence to date has not included any information as to the directors or shareholders of any of the consortia. The team has presented the board with some preliminary material on the five short-listed applicants for the casino management, the Board's examination of which confirms its incompleteness. The Board has requested the Commissioner, in the circumstances, to continue his inquiries and foreshadows the need for the provision of expert support and assistance in the form of skilled accountants and lawyers to ensure the task is adequately undertaken and performed. The Board is aware of the provisions of s32 of the Act which provides for the inclusion of "terms and conditions" in management agreements and s34 which allows for the revocation of those agreements under certain conditions. Presumably these "terms and conditions" will bind the successful company to strict procedures and make it responsible for the propriety of its actions. However, the Board is concerned that the present legislation does not provide for an effective evaluation of the ongoing probity and integrity of the successful consortia. The Board believes that the present legislation leaves the way open for abuse in an industry which has the capacity to attract the criminal element. Regulations relating to such matters as the method of testing the bona fides of both consortia and individuals may go some way to remedy this. Notwithstanding the above, the Board believes a reasonably thorough report upon the applicants can be made within three months of today's date. The Commissioner is proceeding upon this basis. The suggestion was made in argument before this court that, in effect, it had been suggested to Mr Gleeson and those responsible for the formulation of the documentation that the form of the documents as they then existed should be amended to make clear to those reading them that the acceptance by the Government of any offer was conditional upon the obtaining, in due course, of a favourable report from the Police Board. It was then clear, the suggestion was, that the selection of the persons to carry out the development would take place before the Police Board could provide even "a reasonably thorough report" upon the persons concerned. Therefore, it was clear, the suggestion was, that if the Government desired to have the right to refuse to proceed with the selected developer, and to exercise that right after his selection, it would be appropriate that that fact be brought to the attention of the persons seeking selection prior to their selection. This, of course, was not done. Nor was it suggested to Hooker or Harrahs that at the time when on 24 June 1986, their selection was announced, WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S ¥ DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) there were still ongoing Police Board investigations and that the favourable outcome of those investigations was a condition to which the acceptance of their offer was subject. The matter was the subject of further correspondence between the Police Board and Mr Gleeson. On 2 June 1986 Mr Gleeson wrote to Sir Maurice Byers. He referred to Sir Maurice's letter of 29 May 1986 and to the "concerns" expressed in relation to "ongoing mechanisms". He reiterated the Government's concern in relation to "controls" in relation to the integrity of the relevant persons and referred to what was proposed to be done. He invited recommendations from the Board. Mr Gleeson's letter continued: "Tn order to maintain the timetable set by Cabinet for the development of the casino, it is imperative that a decision be made by 10 June as to which consortium should be offered the final contract. This offer will, of course, be subject to the final report of the Board which is noted the Board estimates will take a further three months. Nevertheless, in the light of the strict timetable set by Cabinet, an urgent interim report is required as to whether there are any interim matters which have come to light at this stage which would preclude the Government from making such a conditional offer to one of the four final consortia (Leighton's is no longer a contender). You will appreciate that it would not be possible to keep any decision made on 10 June confidential for a period of a further three months and it is therefore important that the Board furnish the Government with this interim report prior to 10 June. The Government looks forward to receiving the final report from the Board after all due inquiries have been made. Should the Board find that it has insufficient resources to undertake the necessary inquiries, please have no hesitation in contacting me immediately to discuss the situation with a view to rectifying such deficiencies". On 10 June 1986 Sir Maurice Byers replied to Mr Gleeson by a letter which relevantly said: "In your letter of 2 June 1986 you requested the Board to make an urgent interim report as to whether there are any matters which have come to light at this stage which would preclude the Government from making a conditional offer to any one of the four final consortia. The result of the inquiries made by the investigation team to date reveals the following information with respect to the four competing casino operators: Harrahs Subsidiary of Holiday Corporation, USA, Casino 88 Harrahs presently operate casinos in Nevada and New Jersey. Access to the records of the Nevada and New Jersey Gaming Commissions has not been possible to date. Such access will require an appropriate waiver by Harrahs before material is made available to New South Wales investigators. This process is likely to take at least six weeks. It is a requirement of the Nevada Gaming Commission that companies in the Casino 88 consortium be investigated by the Nevada Gaming Board if Harrahs wish to retain their Nevada licence. Although the investigation team has been directing its attention to casino operators, it has noted the presence of Mr George Herscu in the consortium. Herscu, along with other builders, was found guilty in Victoria of providing secret commissions to Mr Norman Gallagher, Secretary of the Builders Labourers Federation. 8 UNREPORTED JUDGMENTS Information available to the investigation team to date indicates that Harrahs hold six licences with the Nevada Gaming Commission and two with the New Jersey Casino Control Commission. None of these licences have been revoked or cancelled. Oral advice from the two Commissions indicates that there is nothing in Harrahs dealings at this time which might lead to licence revocation or cancellation. The Board trusts that this interim report will be of assistance and would appreciate advice on the selection of the successful consortium as soon as possible so that further inquiries can be limited to that consortium". At this time, statements were made in the media relating to the Hooker-Harrahs proposal. The selection of the successful tenderer was not made on 10 June 1986 and, on 13 June 1986 Mr Fitzgerald, solicitor for Hooker, wrote to the Chairman of the Police Board the following letter: "We are the solicitors for Hooker Corporation Limited, one of the companies on the short list of bidders for the rights to develop the above project. Our client is very concerned that an article appeared yesterday on p 56 of the Financial Review which is defamatory of its Chairman, Mr George Herscu and which could possibly have a detrimental effect on our client's chances of being selected as the successful bidder. We understand that your Board will report, or perhaps already has reported, separately to the Government of the State of New South Wales concerning the ownership and control of the various groups on the short list and we believe it is important in making your report or any necessary supplementary report you have available the Reasons for Judgment given in the case in point by his Worship Mr D Dugan SM, the Chief Stipendiary Magistrate of the Magistrate's Court in Melbourne. These reasons for judgment were confirmed on appeal to the Full Court of the Supreme Court of Victoria. Copy of the Reasons for Judgment and the Judgment of the Full Court are enclosed. As this matter was discussed yesterday with the Assessment Committee of the Darling Harbour Authority under the Chairmanship of Mr Alex Carmichael, we are also forwarding copy of this letter and the enclosed Reasons for Judgment and the Judgment to the Authority for its information." It therefore appears clear that, before acceptance of the plaintiff's offer, it was known to DHA and to the Government that Mr Herscu, the Executive Chairman of Hooker, had been guilty of the offences to which reference was made and that the investigation of Harrahs had not been completed. No reference was then made to the investigations which, as it appeared, were then pending in America in respect of allegations made concerning Harrahs. It is accepted by the Government that neither Hooker nor Harrahs was informed, at least in terms, that the acceptance of their offer was conditional upon the outcome of the pending Police Board investigation. No significant case was advanced to explain why what had been said by Mr Gleeson in his letters in this regard had not taken place. Mr Gleeson's letters and other evidence produced at the trial made it clear that the question whether that should be done was before the Government and those advising them. Mr Gleeson was not called to give evidence. Mr Booth when questioned about the matter, advanced the suggestion that the matter had been overlooked. In my opinion, the Government's acceptance, on 24 June 1986, of the plaintiffs' offer was not subject to any such condition as was referred to. The plaintiffs were no doubt aware that investigations were being made prior to 24 June 1986. But the terms of the documentation did not make the favourable WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S 9 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) outcome of those investigations a condition of the acceptance of their offer and, in my opinion, nothing was said by the Government to indicate that it was. If and insofar as the Government seeks to rely upon the outcome of those investigations to justify its termination of the arrangements, it must find some other basis for it. It sought, in its pleadings and at the trial, to call in aid the result of the investigations in ways otherwise than as conditions. The issues arising from its claims in that regard are not before this Court for decision at this stage. However, reference was made at length in argument to the knowledge of Hooker and of Harrahs of the pending investigations. It was suggested that these matters were relevant, inter alia, to the issue of estoppel to which I shall refer. I shall therefore outline what took place following the acceptance on 24 June 1986 of the plaintiffs tender. Following the acceptance of the tender, material was published in the media which was critical of the selection of the Hooker Harrahs consortium. This criticism related, in the main, to Harrahs and to investigations then proceeding in the United States of America in relation to allegations made against Harrahs. However, it is in my opinion clear that Hooker was aware, at least from the beginning of July 1986, that investigations were proceeding in relation to it and in particular to Mr Herscu. On 1 July 1986 Mr Herscu's solicitors, in Sydney and in Melbourne, were made aware that Chief Inspector Collins, Head of the New South Wales Fraud Squad, and the person in charge of the police investigations, desired to speak of Mr Herscu about the matter. In the context of adverse press comment, a discussion was had on 2 July 1986 between the Treasurer Mr Booth, Hookers solicitor Mr Fitzgerald, and others. Various accounts were given of what took place at the conference. Following the conference, Mr Booth issued a press statement in which he said inter alia the following: "The Treasurer Ken Booth said today that the Government was very concerned about the allegations which had come to light on a former employee of 'Casino 88° operator - Harrah. 'The present agreement between Harrah and the New South Wales Government is conditional' Mr Booth said. 'This has always been the case. On June 24 we signed a deed of agreement with Hookers-Harrah and announced their successful bid for the Darling Harbour hotel/casino development. From that date we have forty five days until the final agreement is to be signed. Right from the start I have said that the probity of the casino manager was our top priority - and it will always be our top priority. The investigation which started with the Police Board interim report is not finished. It will not be finished because, as far as Treasury's Casino Control Division is concerned, its security review is an ongoing process. We have an interim report from the Police Board in hand which states that oral evidence from the two gambling commissions in Nevada and New Jersey indicates that that was nothing connected with Harrahs dealings at this time which would lead to licence revocation or cancellation. That advice was assessed along with three other reports.... We made our decision on the basis of those reports and the Police Board is continuing its investigation. 10 UNREPORTED JUDGMENTS The review programme is on course and proceeding according to schedule and the Treasury's Casino Control Division has already opened discussions with the Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement. We haven't struck any problems at all in getting the United States authority to co-operate with us', Mr Booth said." The statement affirmed the Government's commitment to "the utmost integrity" in the management of the casino and referred to the fact that "that commitment has been backed up by a very stern Act...". The statement then set forth the terms of s34 of the 1986 Act. In the accounts given of the discussions which preceded the issue of the press statement, there were some differences as to whether the Treasurer had indicated, or the extent to which he had indicated, that the arrangements with the plaintiffs were "conditional". There were differences as to whether what was discussed related only to Harrahs or whether it related, in addition, to Hooker and the investigation of it. His Honour qualified his acceptance in this regard of the evidence given by Mr Booth. I do not think it is necessary for this court to consider the correctness of his Honour's finding. For it is, I think, clear that at or about this time, Hooker and Mr Herscu were aware that an investigation was proceeding as to their integrity. The effect of the knowledge of this upon, for example, their right to recover in restitution is a matter which may be dealt with subsequently. On 2 July 1986 a meeting was held at the office of Hooker between Mr Collins and other police, Mr Herscu and Fitzgerald. At that meeting questions were asked which indicated that in respect of some matters, though, Mr Fitzgerald said, not Mr Herscu's "involvement with the BLF'"', were to be pursued by the police. On 7 July 1986, a further meeting took place at the offices of Hooker in relation to a police questionnaire affecting Hooker. And on 23 July 1986, Mr Fitzgerald delivered to Mr Collins material provided by Hooker relevant to the investigations. It is therefore, I think, clear that Hooker was aware during July that investigations concerning it and Mr Herscu were being made by the Police Board. It is not seriously in contest but that, at the same time, the Police board was pursuing investigations concerning Harrahs. On 3 July 1986 Mr Unsworth, the "Premier Elect", referred publicly to ongoing investigations concerning Harrahs. This fact was confirmed by a letter of 8 July 1986 from the Treasurer Mr Booth to Hooker and Harrahs. In that letter, Mr Booth said: "T refer to the deed of offer made on 13 June 1986 between Hooker Corporation Limited and Harrahs in favour of the Darling Harbour Authority and the Treasurer of the State of New South Wales in respect of the Darling Harbour Casino. I also refer to the recent reports in the Australian press regarding, inter alia, investigations involving activities of a former executive of Harrahs, Mr John Allan. I write to confirm that the New South Wales Government is proceeding to advance the requisite investigations into the suitability of Harrahs or an associate of Harrahs being the operator of the casino. In view of the requirement under the deed of offer that you enter into the agreements and casino agreements within forty five days of the notifications given pursuant to the deed of offer, I wish to confirm that it is our intention to progress negotiations with you in respect of such agreements pending completion of such investigations. However, in view of the recent allegations but certainly without in any way prejudicing the final outcome, I confirm that any negotiations WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S1¥ DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) with you will be conducted without prejudice to, and without constituting a waiver of, our rights under the deed of offer, the agreements and the casino agreements". On 23 July 1986, Harrahs received a notice from the New South Wales Treasury seeking information under the 1986 Act. On the same day, Freehill Hollingdale and Page wrote to Mr Fitzgerald, solicitor for Hooker, a letter which relevantly said: "We refer to your letter dated 18 July which we have discussed with the Darling Harbour Authority and the New South Wales Government. We are instructed to reply as follows: ... In this regard we note that Hookers and Harrahs are jointly and severally owner/developer while Harrahs is also operator and that a number of matters mentioned by your in your letter relate to the owner/developer and operator respectively. B. It may be helpful for us to note the context of which your letter relates. There exists at this point in time binding agreements constituted by acceptance of the deed of offer by the relevant notifications, which agreements are expressed in the deed of offer as themselves subject only to what are defined as 'Approved Changes'. As you will recall from the deed of offer, DHA's approval of these modifications and additions requires them to be 'taken as a whole' in terms of CL1(b)(b). As your letter makes clear, your list of changes is not yet exhaustive so that it is not possible for the proposed changes to be 'taken as a whole' until such time as you provide a complete list in sufficient detailed to enable them to be assessed as a whole.... We note from your letter that you will be furnishing us with that detailed submission and we also note that the suggestions you are making 'will not be with a view to renegotiating the essential terms of our proposal'." On 5 August 1986 the report by the Police Department was finalised. The report was a comprehensive document of over twenty four pages. It related only to "the suitability of the Harrahs group of companies and its parents Holiday Corporation to be involved in the establishment and management of the Darling Harbour Casino". In its introduction, the report said: "Subject to one particularly serious issue of concern involving the management of the Atlantic City Casino some years ago, the overall picture that emerged during the investigation was that of an entity highly regarded in the business world, both in the hospitality field (hotels etc) and the gaming area (casinos). Harrahs has been described to us as one of the best, if not the best in its field, by competitors, gaming control officials and law enforcement officers. No suggestion was made to us that the corporation in its entirety or as fragmented in the various company subsidiaries, is currently infiltrated by, or connected with, any form of organised crime. Harrahs Casinos have recently been relicensed in Nevada and New Jersey and in Nevada on 17 July 1986 the company was given provisional approval to be concerned in the Darling Harbour project in New South Wales. Further details of the licensing laws and controls in Nevada and New Jersey are set out later in this report". The report then dealt with a number of allegations made in connection with Harrahs and subject to one matter, reported favourably upon them. Under the heading "Conclusion" the report said: 12 UNREPORTED JUDGMENTS "Throughout our investigation the Executive Officers and staff of Harrahs have been most co-operative. All documents requested have been readily and promptly produced.... The only outstanding area of concern is that pertaining to the labour negotiations of 1980-1981. It is most unfortunate that the New Jersey authorities have not taken steps to resolve this issue when it was raised by the Pennsylvania Crime Commission and in the Atlantic City press in 1981. The FBI investigation which commenced in 1985 as a result of information then supplied by the New Jersey State Police is incomplete and from Mr Parrillo's indication to us the Division of Gaming Enforcements investigation has only recently commenced. On the material available to us to date there is no conclusive evidence of any complicity or impropriety on behalf of Harrahs as distinct from Mr John Allan. What further evidence may emerge from the Division of Gaming Enforcement's investigation or the FBI's investigation, if resumed, is a matter for conjecture". On 24 July 1986 Mr Gleeson wrote to Sir Maurice Byers informing him that "the Cabinet Sub-Committee" requested that "the final report of the Police Board be submitted for its consideration as soon as possible". On 7 August 1986 the Police Board forwarded to Mr Gleeson its report "as to whether the proposed consortium and casino manager are of sound repute, probity and integrity". In relation to Harrahs, the Police Board referred to the matter in the introduction to the police report and in its conclusion to which I have referred. It then proceeded to deal with "the area of concern addressed by the Superintendent", namely allegations that the then general manager of Harrahs Marina in Atlantic City, John Allan, had been involved in relation to labour negotiations in 1981 with Teamsters Union officials and organised crime figures. The report by the Police Board said: "The conclusion is open that when the company was subjected to pressure, it was prepared to deal with organised crime figures in order to obtain a benefit for itself. The conclusion is also open the most senior officers of Harrahs, to whom Mr Allan was responsible, were aware of these dealings. The interaction between Harrahs, in the form of Mr Allan, the then General Manager, and these crime figures is the subject of an investigation by the Federal Bureau of Investigation and the New Jersey Division of Gaming Enforcement. In view of the fact that a senior officer of Harrahs, acting on the company's behalf, was involved with organised crime figures, the Board is unable to report that the company is of sound repute, probity and integrity". In relation to Hooker, the report said: "Turning to Hooker Corporation Limited, it is advised that Detective Chief Inspector WJ Collins has provided through the Commissioner of Police a detailed report of its investigations into that company. Without repeating the details of the submission, it has been established that, with the exception of Mr George Herscu, the corporation's executive chairman, there appears to be no impediment to the company being involved in the development of the Darling Harbour Casino complex. As for Mr Herscu, who has substantial control of the company, the areas of impediment involve matters of public knowledge associated with bottom of the harbour' companies and to the payment of secret commissions to Mr Norman Lesley Gallagher, the General Secretary of the Australian Building Construction Employees and Builders Labourers Federation, and Robert Harry Dalton, an agent of the same federation. WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S!3 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) It will be noted that the secret commission proceedings were dealt with by way of adjournment on entry into recognisance, a measure not amounting to a 'conviction'. This course enabled Mr Herscu to retain his status of direction of his various companies. The leniency of the sentence was appealed by the Victorian Attorney-General; however, the magistrate's decision was upheld. In June 1985, Mr Justice Waldron presiding over the trial of Gallagher, said inter alia: 'Although I am satisfied that the providers of the secret commissions were themselves calculating, corrupt men, and although I am satisfied that all of them were prepared to play your game for the advantages they perceived they would obtain by so doing, I am well satisfied that you were the instigator of the giving of the secret commissions. I am obliged to say that in my view Herscu, Walter Gray, Bruno Grollo and Reno Grollo were dealt with too leniently by the learned Stipendiary Magistrate, despite the fact that by their pleas of guilty they were then giving the appearance of remorse for their criminal activities. Although they accommodated your wishes, I am satisfied that they perceived the advantages which they could obtain by doing so and therefore, in a devious secretive deliberately dishonest manner, accommodated your wishes to their own advantage'. Gallagher's conviction and sentence has since been set aside and a fresh trial has been ordered. The conclusion is open that Mr Herscu, when under pressure, was prepared to bribe people when he considered it was necessary for his company's advantage. In the circumstances, it is the Board's view that such a person cannot be considered to be of good reputation, probity and integrity; and it can fairly be said that Mr Herscu controls the Hooker Corporation. Accordingly, the Board is unable to report that the company is of sound repute, probity and integrity. Finally, the Board takes the view that legislation governing the casino should embody provisions positively requiring continuous and rigorous supervision of the activities of those controlling the casino and those supplying services to it. In our view, the present provisions, while doubtless effective to safeguard the revenue, do not appear to be sufficient to prevent criminal involvement". It is proper to record that, before this court, the Solicitor-General indicated that, since the date of the report of the Police board, the investigations in the United States of America concerning Harrahs were completed and that the result of those investigations was favourable to Harrahs. At the time relevant to the decisions made by the Government during 1986, the investigations concerning the allegations against Harrahs were then not complete and the Government was then in a practical sense, required to proceed upon the basis that the "conclusion" to which the Police Board report referred ("that when the company was subjected to pressure it was prepared to deal with organised crime figures in order to obtain a benefit for itself") might subsequently prove to be correct. In relation to Hooker, the conclusion stated by the Police board in relation to Mr Herscu was not, in its terms, conditional. That conclusion ("that such a person cannot be considered to be of good reputation, probity and integrity") expressed in relation to the Executive Chairman of Hooker, was both serious and final. I have referred previously to the possible significance of the Police Board report. In my opinion, the obligations created by the acceptance of the plaintiffs' offer on 24 June 1986 were not conditional upon the outcome of the Police Board report. On that view the outcome of the report might have relevance in relation to action taken by the Government in respect of Harrahs in exercise of such 14 UNREPORTED JUDGMENTS powers as it might have in that regard under the 1986 Act. It was not, I think, otherwise relevant to whether obligations were created by the acceptance of the plaintiffs offer or whether, as the result of that report, they ceased to have legal operation. However, it may be that, on the view I have taken of the effect of the acceptance of the plaintiffs' offer, the report is of relevance in respect of other issues. It may be, for example, that it is relevant in determining, as it has been described, the restitution issue. And there are other issues formally raised on the pleadings to which the report may have relevance. It has been suggested in argument that the view which I have taken as to the effect of the acceptance of the plaintiffs' offer is incorrect. On that basis, the suggestion has been, the outcome of the Police Board investigations and the form of its report were relevant in determining whether the Government could or should opt to enter into the operating documents referred to in the deed of offer. For these reasons, it is therefore, in my opinion, necessary that I express an opinion as to the effect of the Police Board report. This Court is, in my opinion, concerned only with the fact that the Police Board formed the conclusions that it did and that it expressed those conclusions formally to the Government. Some of the facts on which it based its conclusions are not, and were not, in doubt. Other matters, including inferences which the Police Board drew, are no doubt in contest. In particular, the inferences that the Police Board drew from the facts before it as to the integrity of Mr Herscu are no doubt in issue. My conclusions in this case do not involve a judgment on the correctness of the inferences which the Police Board drew of the correctness of its final conclusion. I do not mean by this that those conclusions are incorrect. But it is proper to record that, as the appeal has proceeded before this Court, it has not been necessary for this Court to come to a conclusion as to the correctness of them. What this Court is concerned with, in relation to the issues which are before it for decision, is the significance of the fact that such conclusions were drawn and stated by the Police Board of New South Wales. In relation to Harrahs, the effect of the report was to record the doubt of the Police Board, based upon what might prove to be significant grounds, as to the integrity of Harrahs. It was, in my opinion, in August 1986, reasonable for the Government to have a doubt as to the integrity of Harrahs and that doubt was a reasonable doubt. Were that the only matter in question, it would, on some of the issues, have been necessary to determine whether that could or should have led to the Government, as it did, terminating the arrangements the plaintiffs. However, for the reasons to which I shall refer, it is not necessary to express a final conclusion on that matter. In relation to Hooker, the Government had the conclusion, after investigation, of the Police Board, that the person in effective control of Hooker, Mr Herscu, was not a person of integrity. If that conclusion stood, it was a matter which could lead the Government to conclude that it should not exercise such option as it might have to continue with its arrangements with Hooker. Indeed, if the conclusion stood, it would be difficult to see how the Government would be justified in proceeding with those arrangements. In what I have said, I have not examined the question whether the Government, for any relevant purpose, was obliged to go behind the Police Board report or would have been justified in doing so. The matter has proceeded upon the basis that it was the report and the conclusions in it which essentially were relevant to the Government's actions. WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S!& DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) On this basis, the Government had, in my opinion, little alternative but to terminate its arrangements with Hooker. As Hooker and Harrahs were both involved in the proposals for development of the complex, and as Hooker and the interest associated with it were substantially involved in that development, a termination of arrangements with Hooker would lead to a termination of the arrangements with Harrahs. One additional matter is to be mentioned. As I have said, the Government was aware prior to the selection of the plaintiffs as successful tenderers of facts relating to the charges against Mr Herscu. It was also aware of the investigations which were proceeding in the United States of America in relation to Harrahs. The suggestion has, I think, been made in argument that, knowing what it then knew, the Government should not have selected the plaintiffs as the successful tenderer without, at least, further and more complete investigations or that, having selected them as they did, they were not justified, because of what subsequently occurred, in terminating the arrangements with the plaintiffs. This suggestion is not without force. Two things may be said about it. First, it does not alter the opinion which I have formed as to the Government's decision on 12 August 1986, to terminate the arrangements with the plaintiffs. Once the Government had the report of the Police Board in the terms in which it was delivered, it was then right, in the exercise of such discretion as it may then have had, to determine not to proceed with the arrangements. The fact, if it be such, that earlier it had erred in selecting the plaintiffs as successful tenderers would not, in relation to such discretions require, or I think, warrant that the Government proceed with those arrangements. If there was an earlier error, it would not justify or warrant the later error. Second, the matter turns principally upon the position of Hooker and the report of the Police Board in relation to Mr Herscu. Whether the Government, prior to 24 June 1986, was aware of all of the matters referred to in or relied upon in respect of the Police Board report, does not appear. If the Government knew all of the basic facts, so that the Police Board report involved only the drawing of inferences from those facts, and the categorisation of Mr Herscu, it may then be necessary to examine more closely the position of the Government in relation to the possible discretion and in relation to matters such as restitution. These are matters to which the opinions which I have at this stage expressed do not provide a conclusive answer. Having received the Police Board report, the Government acted upon it. On 12 August 1986 it advised the plaintiffs that no extension would be given of the forty five day term provided for in the deed of offer. On the same day, the then Premier, Mr Unsworth, announced that "having received the final report of the Police Board and Hookers/Harrahs having failed to execute the agreement before midnight on Friday 8 August, the Government has decided not to proceed with the Hooker/Harrahs proposal". The structure of the proposed transactions: It was envisaged that the tenderer selected by the Government would, by that selection or otherwise, enter into the legal transactions appropriate for the development of the complex. The Government, and those assisting it, set about the drafting of the documents for this purpose at a comparatively early stage. As the planning for the matter proceeded, it was, I think, seen as necessary to provide for two stages: that relating to the selection of the successful tenderer; and that relating to the development itself. It might have been decided to deal with the two stages separately: the parties might have proceeded to the selection 16 UNREPORTED JUDGMENTS of the developer; and then negotiated with him the structure of the legal arrangements for the development. In the event, those concerned with the documentation elected to bring these two stages together. It was the extent to which they did so and the effect of what they did which is in issue in determining the nature of the legal relations which arose upon the selection of the plaintiffs. It was decided that, subject to such further negotiations and agreements that might occur, the development itself should be carried out by the following documents: (a) A Development Agreement between DHA and the developer (b) A lease of the land by DHA to the developer (c) A sublease of the land by the developer to the operator of the casino (d) A casino operating agreement between the operator, the developer and the Treasurer, and (e) A continuity agreement between the developer and the Treasurer providing for the period during which the right to operate the casino should continue. What was done in relation to the selection process was as follows. Those seeking selection were invited to execute a Deed of Offer in the form which had been settled by the Government. The deed of offer, as was said in the Explanatory Memorandum issued by the Government, was "an offer by each of the consortia to enter into the relevant documents in the event of it being selected by the New South Wales Government as the selected tenderer'. The explanatory memorandum said: "This offer shall become legally binding upon successful consortium being selected and so notified". The deed of offer was expressed to be irrevocable for certain working days from the date of its receipt by DHA. It was contemplated that, within that time, the successful tenderer would be selected. Provision was made in the deed of offer for the notification of the successful tenderer. On notification of his acceptance, the successful tenderer, by the terms of the deed of offer, undertook obligations set forth in the deed of offer. Those obligations related to (as I shall describe them for brevity) the Operating Documents, that is, the documents to which I have referred. It is the extent of the obligations of the successful tenderer and of the Government which arose from the acceptance of the deed of offer which, at the outset, is in question in this appeal. In order to understand the effect of the acceptance of the deed of offer, it is necessary to examine what the documents set out to do and the circumstances in which they came into being. Those drafting the documents were under a number of constraints. Each of the consortiums on the short list had, or might have had, different ideas as to the structure of the transactions to be entered into to give effect to the development and so the form of the operating documents. It was therefore necessary at the initial stage to examine the various proposals. There were a number of matters which could not, or might not, be able to be determined finally at the time when the successful tenderer was selected. Financial arrangements might require to be finalised and there might be subsequently matters affecting the structure of the transactions. And drafting provisions, of greater or lesser importance, might require to be made. However, the Government required the approaches to be commenced and the casino to be operating as soon as possible. And it was, I infer, apparently desired that, on the selection of the successful tenderer, that tenderer should be bound by obligations in relation to the operating documents. It was therefore necessary to draw the documents, at the initial stage, in a form which would, as far as possible, WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S!¥ DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) accommodate these matters. Accordingly, before execution of the deed of offer by the tenderers, the parties, through their lawyers, were consulted as to the form of the documentation. In particular, drafts prepared by the solicitors for DHA, Freehill Hollingdale and Page, were discussed with the solicitors for the plaintiffs. It was agreed that the documents, as originally drafted, should be amended and the amendments so agreed were set forth in a "schedule". When the deed of offer was executed, the original draft and the schedule of amendments had not been consolidated into a single set of documents. However, it was clear from the original documents and the schedule of amendments what was in this regard intended by the parties. The argument before this Court has proceeded by reference to a set of documents which represent an appropriate consolidation of the original drafts scheduled amendments. In dealing with the deed of offer and the operating documents, I shall refer to what, before this Court, has been the consolidated documents. As I have indicated, the documents which were placed before the tenderers comprised the explanatory memorandum, the deed of offer, and the operating documents. The explanatory memorandum is, perhaps, of relevance as part of the circumstances surrounding the transaction to which reference may be made. No particular reliance has been placed upon it by the parties and I shall, in determining the issues before the court, deal primarily with the terms of the deed offer and the operating documents. The deed of offer was the central document at the stage of tender. It was the only document executed by the tenderers. I shall set forth in detail the terms of it subsequently. It is sufficient at this stage to refer generally to the form of it and the part of it played in the structure of the transactions. The deed of offer was executed by Hooker and Harrahs. It was in form an offer "in favour of' DHA and the Treasurer. By its terms it made the offer "irrevocable for seven working days after the date of its receipt by DHA" and, it being a deed, the offer was effective for that period. By the deed of offer, the plaintiffs covenanted, in the terms and subject to the conditions set forth in it, that within forty five days of notification by DHA of its acceptance of the offer, they would "enter into, be bound by and perform" the development agreement, the lease and the continuity agreement, and would procure the casino operator to enter into the casino operating agreement and the casino lease. In addition, the deed of offer, by its terms, contemplated that after selection of the successful tenderer, further amendments might be made to the operating documents. The extent of those amendments and the circumstances in which they were envisaged or could be insisted upon, were referred to in the deed of offer. Those amendments were to be made within the forty five day period referred to in the deed of offer. It is agreed by the Government that, notwithstanding the possibility of such amendment, the terms of the operating documents as they existed as the date of acceptance of the tender, were, for contractual purposes, appropriately final and certain. It is accepted that, had the parties, upon 24 June 1986, executed the operative documents, they were, as far as concerned their content and certainty, in a form to which contractual effect could be given. Therefore, the structure of the transaction envisaged that each of the tenderers would enter into a deed of offer; the acceptance of the tender of one of them within the period of the offer would impose obligations upon the successful tenderer in respect of the operating documents; and, subject to possible 18 UNREPORTED JUDGMENTS amendments and otherwise to the terms and conditions of the deed of offer, the successful tenderer would, by acceptance of his tender, be bound to "enter into, be bound by and perform" the operating documents in the sense to which I have referred. The essential question in this part of the appeal is whether and to what extent the acceptance of the deed of offer of the plaintiffs obliged the Government also to carry out the provisions of the operating documents. After 24 June 1986, discussions took place between the solicitors for the Government and the solicitors for the plaintiffs as to the amendment of the operating documents and other matters relevant to the proposed development. The plaintiffs were asked to indicate what further amendment to the operating documents were required. Because of difficulties between Hooker and Harrahs and, it may be, other matters, they did not indicate or indicate fully, what amendments were required. The possibility of the extension of the forty five day period within which amendments might be made was discussed. In particular, there was discussion of this on | August and 6 August 1986. Finally, on 8 August 1986, the Government indicated that it would not grant any such extension. It did this, as I have said, because of the terms of the Police Report. On 8 August 1986, within the forty five days period, Hooker executed and delivered the operative documents in the form in which they were on 24 June 1986. Harrahs did not do so until 12 August 1986, that is, outside the forty five day period. 2. The course of the proceedings The trial commenced on or about 30 March 1987. Judgment was finally given on 4 December 1987. The trial was a commercial cause. The trial proceeded on the basis that all issues raised by the pleadings were to be dealt with except that the issue of damages was reserved. In the result, the learned judge having dismissed the proceedings brought by each of the plaintiffs and by the DHA and the Attorney-General, the issue of damages did not fall to be determined. In the event, judgment was given for the defendants in each of the three proceedings. The appeals to this Court are appeals which involve the correctness of his Honour's judgment in respect of the matters that he determined. They raise also the issues which were not determined by the learned judge. Such of those issues as it is necessary to determine are before this Court for determination. And the parties have served notices of contention in relation to matters, issues and rulings incidental to the trial. When the appeals came before this Court, it was determined that, as a matter of convenience, the hearing should be confined in the first instance to the matters which, substantially, were determined by the learned trial judge. If and insofar as, following the decision of this Court upon those matters, it appears necessary for other matters to be determined, it is envisaged that that will be done at a further hearing of the appeals. 3. The issues now before the court for decision As [have said, the plaintiffs have brought separate proceedings. No objection is taken to the form of the proceedings although comment has been made upon the fact that separate proceedings have been brought and the significance of that fact in understanding the plaintiffs' claims. There are differences in the form between the statements of claim filed by the plaintiffs but, for present purposes, they may be treated as being, in substance, to the same effect. I shall, for convenience, refer primarily to the claim as brought by Hooker. WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S!9 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) The plaintiffs' case has been put on two main bases: on the first basis, the plaintiffs claim: that the Government, upon its acceptance of the plaintiffs' offer on 24 June 1986, became obliged to perform the operative documents; that it repudiated such obligations; and that the plaintiffs are entitled to damages accordingly. The plaintiffs claim that the Government became so obliged either because of the effect of its notification under the terms of the deed of offer; or because it is estopped from denying that it is so obliged. The Government raised a number of defences to the plaintiffs' claim as so based. These included: that it did not become obliged to perform the obligations of the operative documents; that the plaintiffs did not perform the obligations precedent to any such obligations on the part of the Government and in particular did not execute the operative documents in time, so that the Government ceased so to be bound; and that the plaintiffs committed breaches of the deed of offer and the Government properly terminated its obligations accordingly. Upon the second basis of their claim, the plaintiffs claimed: that, though the Government was not obliged in terms to perform the operative document, it caused or permitted the plaintiffs to do things relating to the development of the complex; and that, because of this the Government was obliged to recompense the plaintiffs for what they had done. The learned judge dismissed the plaintiffs' claim. As to the first basis: his Honour held that the Government did not, by the terms of the deed of offer and its acceptance, become obliged to perform the operative documents; and he held, in addition, that it was not estopped from denying that it was so obliged. As to the second basis of the plaintiff's claim: the learned judge held that the Government was not obliged in restitution for two reasons: because the plaintiffs did not do what they did for the reasons suggested by them as the basis for a claim in restitution; and because Harrahs not having revealed to the Government the existence of the pending investigations of allegations against it in the United States of America, it was not just that restitution be made. On appeal before this Court, the parties have argued the three matters of substance which his Honour decided: whether the Government became obliged to perform the operative documents by virtue of its acceptance of the plaintiffs' tender; whether (if it did not) it was estopped from denying that it was so obliged; and whether it was liable to the plaintiffs in restitution. In addition, the Government has sued the plaintiffs and the bank. It has claimed that, by virtue of the terms of the deed of offer and of what the plaintiffs did, it is entitled to damages or to the enforcement of the bank guarantee given pursuant to the deed of offer. The learned trial judge dismissed the Government's claim. The Government has appealed against that dismissal. There are therefore before this Court for decision at this stage four issues: the three issues arising from the dismissal of the plaintiffs' claim; and the issue arising from the dismissal of the claim by the Government. I shall consider or refer to each of these issues in turn. 4. Is the Government bound by the obligations of the operative documents? The questions involved in this issue are whether the acceptance by the Government of the plaintiffs' offer gave rise to any obligations on the part of the Government and, if it did, what those obligations were and whether, in particular, the Government was obliged to perform the operative documents. 20 UNREPORTED JUDGMENTS The plaintiffs' contention is that the Government was, by its acceptance, bound to execute the operative documents: at least, it was so bound if, within the time referred to in the deed of offer, the plaintiffs executed documents as there provided; alternatively, they claim that the Government was bound by the obligations by which they would have been bound if they had executed the documents. In the context of a claim for damages, there is, I think, no relevant difference between these alternatives and I shall not distinguish between them. The Government's contention is that, by its notification of acceptance of the offer, it undertook no relevant obligations. Its contention is that, upon the plaintiffs executing operative documents and otherwise complying with the terms of the deed of offer, the Government had an unfettered option whether or not to enter into the obligations contained in the operative documents. Their contention is that, unless and until they decided to be bound by the operative documents by the execution of them, they were not bound by the terms of the deed of offer or of the operative documents. On one view of the case advanced for the Government, it determined not to enter into any such obligations. It contends that, because of the adverse terms of the Police Board report, it opted not to proceed with the arrangements and therefore did not become bound by them. The plaintiffs rely upon an additional contention. The contend that (if the Government was not bound by the operative documents as such) what happened was such that the Government is to be treated in law as if it were bound by them. This, they contend, arises because the Government took the benefit of the operative documents as if they had executed them and accordingly are to be treated in law as if they were bound by them as on execution. In order to deal with these contentions, it is necessary to consider the terms of the deed of offer. That deed, incorporating the relevant amendments to be made to it, was in the following form: THIS DEED made the 13th day of June, 1986 constituting the deed of offer referred to in the bank guarantee ("the Bank Guarantee") hereinafter required under CL3. BETWEEN ("Owner/Developer" and referred to as "the Lessee" in the Bank Guarantee which expressions shall include any successors and assigns if approved in writing by the Minister and DHA) of the first part AND ("Operator" which expression shall include any successors and assigns if approved in writing by the Minister and DHA) of the second part In favour of DARLING HARBOUR AUTHORITY ("DHA") and KENNETH GEORGE BOOTH, TREASURER OF THE STATE OF NEW SOUTH WALES ("the Minister') WHEREAS in consideration of DHA and the Minister agreeing to submit the Offer hereinafter referred to to the Government of New South Wales for consideration together with any competing offers; the Owner/Developer and the Operator have given the covenants hereinafter contained in favour of DHA and the Minister to the intent that such covenants shall be legally enforceable by DHA and the Minister and secured by the Bank Guarantee. NOW THIS DEED WITNESSES as follows: WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'22v DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) (1) (a) Where there is more than one entity named as Owner/Developer, each such entity shall be jointly and severally liable for the obligations and covenants of Owner/Developer and where there is more than one entity named as Operator each such entity shall be jointly and severally liable for the obligations of the Operator and the Bank Guarantee shall cover the liability of the Owner/Developer in respect of all of the obligations and covenants of those entities comprising the Owner/Developer. (b) The Owner/Developer covenants that: - (aa) within 45 days (extendable by agreement between DHA and the Owner/Developer) of notification by DHA for and on behalf of the State of New South Wales or the Minister in or to the effect of Annexure "A" (which notification shall be valid and effective for purposes of this Deed when given in writing under the hand of DHA or the Minister and accompanied by a copy of the notification (Annexure "B") given contemporaneously in respect of the Operator approving the Offer hereinafter described of the Owner/Developer being an offer hereby agreed to remain irrevocable for 7 working days after the date of its receipt by DHA) (i) it will enter into, be bound by and perform agreements ("the Agreements") substantially in conformity with the drafts attached hereto comprising Development Agreement, Agreement for Lease, Continuity Agreement (and will enter into, be bound by and perform the ground lease pursuant to the Development Agreement and Agreement for Lease at the time specified in the Development Agreement and Agreement for Lease) and Casino Lease, the latter to an Operator approved or to be approved by the Minister, and (ii) will procure the Operator to enter the Casino Operating Agreement, and Casino Lease ("the Casino Agreements") substantially in conformity with the drafts attached hereto which the Operator covenants also the do in each case within the said 45 days (extendable by agreement between DHA, the Owner/Developer and the Operator) of the notification by DHA for and on behalf of the State of New South Wales or the Minister in or to the effect of Annexure "B" (which notification shall be valid and effective for the purposes of this Deed when given in writing under the hand of DHA or the Minister and accompanied by a copy of the notification (annexure "A") given contemporaneously in respect of the Owner/Developer) approving the Offer hereinafter described of the Operator being an offer hereby agreed by the Owner/Developer and Operator to remain irrevocable for 7 working days after the date of its receipt by DHA. (bb) The Agreements and Casino Agreements shall be subject only to such modifications and additions as DHA may approve in writing ("Approved changes") which DHA will approve only where satisfied in its absolute discretion that the modifications and additions taken as a whole do not materially adversely affect the interests of DHA and the State of New South Wales and do not contravene any applicable Commonwealth or New South Wales legislation, and subject as aforesaid, and without limiting the generality thereof DHA will not unreasonably withhold its approval to modifications and additions necessary to accommodate financing arrangements affecting the Owner/Developer or Operator or necessary to accommodate a corporate structure approved by DHA in which the Owner/Developer or Operator proposes to hold the relevant interest. All approvals in or contemplated by this Deed shall be in writing. (c) "The Offer" shall be deemed accepted by the notifications hereinbefore referred to so as to give rise to binding legal obligations on the part of the Owner/Developer and Operator respectively and shall be to carry out in 22 UNREPORTED JUDGMENTS accordance with the Darling Harbour Casino Act 1986 (as amended) the obligations under and to exercise the rights, privileges and functions contained or contemplated by, the Agreements so far as these apply to the Owner/Developer and by the Casino Agreements as far as these apply to the Operator and Owner/Developer and shall also include any obligations and functions undertaken under: - (i) the Proposal (as defined in the Casino Operating Agreement) including "the final supplement to the Proposal" (as referred to in the DHA letter in Part Al above relating inter alia to financial terms) and in addition accompanied by the Control description elaborated below but which shall not be inconsistent with the Agreements or Casino Agreements as the case may be nor detract from the obligations of the Owner/developer or Operator thereunder and without limiting the foregoing shall set out and represent to DHA and the Minister so as to warrant the accuracy thereof, an up to date description at the date thereof of all relevant facts and circumstances necessary to establish as at such date the position regarding control of the Operator and Owner/Developer and their respective holding companies or any affiliates of any of the foregoing with an interest in casinos or gaming within the definition of "Change of Control" in the Casino Operating Agreement and Continuity Agreement respectively and in particular also without limiting the foregoing shall include the owner of any substantial shareholding or holder of any significant voting influence falling short of control and any arrangement or understandings whereby effective control of the Board or Management thereof may be altered or influenced, as well as fully describing the existing Boards and existing principal management and in the case of an Operator or Owner/Developer which is in either case or both cases a trust, the other matters and things set forth in paragraph (c) of such definition, also as at such date, or as soon thereafter as the same are ascertainable, and (ii) amendments and additions to the Agreements and Casino Agreements and this Deed of Offer contained in or contemplated by: (aa) the First Schedule dated as of 11 June 1986 sent to bidders, and (bb) any other Approved Changes as referred to in this Deed of Offer to the intent that reference in this Deed of Offer and the Offer to the Agreements and Casino Agreements shall be deemed to refer to those agreements as so amended and added to 2. Subject to CL4, in the event that Owner/Developer or Operator fail to comply with CL1 of this Deed or the Agreements or Casino Agreements, then without prejudice to any other remedy, in consideration of the notifications hereinbefore referred to the Owner/Developer and Operator subject to CL4 jointly and severally covenant to compensate DHA and the State of New South Wales for any damages directly or indirectly resulting from such failure including any loss of profit. 3. The Owner/Developer shall furnish the Bank Guarantee in terms of annexure "C" with only such modifications as may be approved by DHA as security for its agreements in CL1 including without limiting the generality of the foregoing its obligations under and performance of the Agreements and under the Offer and its obligation to keep it irrevocable for 7 working days aforesaid and for any compensation or damages referred to in CL2 and CL4. The Bank Guarantee may only be withdrawn if replaced by the Bank Guarantee contemplated by CL10.1 of the Development Agreement given when contemplated by the Development Agreement or if the Owner/Developer and WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'223 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) Operator are unsuccessful in obtaining a notification in terms of annexures A and B it being understood that DHA or the Minister will so advise unsuccessful parties. 4. The parties agree that notwithstanding CL2 a failure by the Owner/Developer or Operator to comply with the terms of this Deed shall give rise to liquidated damages of $25,000,000, which liquidated damages shall be secured by the Bank Guarantee and such liquidated damages shall be the maximum and minimum damages to which DHA and the Minister are to be entitled PROVIDED THAT if the Owner/Developer and Operator have failed to advise in writing within 60 days of the date of the notifications referred to in CLI above that they are not ready, willing and able to comply with this Deed and their Offer (including entering into the Agreement or, as the case may be, the Casino Agreements as modified by any Approved Changes) then such damages upon such failure shall be deemed to be a minimum of $25,000,000 plus such additional damage as may be established pursuant to CL2 of this Deed and the Bank Guarantee shall apply to such minimum amount of $25,000,000 as aforesaid. 5. This Deed may not be varied without the approval in writing of DHA and the Minister. 6. Any notice or notification required under this Deed shall be in writing and shall be delivered personally or given by telex or telegram at the address of such party appearing above. 7. This Deed shall be governed by, construed and take effect in accordance with, the laws in force in the State of New South Wales in the Commonwealth of Australia and the parties irrevocably submit to the non-exclusive jurisdiction of the Courts of that State and any courts of appeal therefrom. 8. Rights of access to the site from notification of acceptance of this Offer are hereby given at the election of the Owner/Developer in the following terms: - In the event that this Offer is accepted, then the DHA shall if requested by the Owner/Developer make available to the Owner/Developer access to the Land upon the following terms: (a) the access shall be from the date of receipt by the Owner/Developer of formal notification of acceptance of this offer up to the date of execution of the Agreements; (b) access shall be for the purpose of the Owner/Developer and persons authorised by it carrying out site testing, inspections, survey works, services diversion works and any other purpose considered reasonably necessary by the Lessee as being preparatory to construction (including without limitation, the demolition of existing structures upon the Land); (c) no fee shall be payable by the Owner/Developer for such right of access; (d) the provisions of Pt9 of the Development Agreement shall apply mutatis mutandis to the rights hereby granted; (e) the Owner/Developer shall comply with the requirements of all relevant authorities having jurisdiction in relation to the Land; (f) in the event that the DHA informs the Owner/Developer that it intends to undertake work on the Site which will be for the benefit of the Owner/Developer or the DHA determines it will undertake work that the Owner/developer has indicated it wishes to undertake, the DHA may undertake that work and the Owner/Developer will pay the costs and expenses of the DHA incurred on the work on demand from the DHA; 24 UNREPORTED JUDGMENTS (g) in the event that the Owner/Developer fails within 45 days to execute the Agreements or fails to carry out the obligations hereby contemplated then the Owner/Developer shall not be entitled to obtain reimbursement from the DHA of any costs or expenses incurred by the Owner/Developer pursuant to these rights and access to the Site shall be withdrawn. IN WITNESS WHEREOF the parties hereto have set their hands and seals on the date first above mentioned. The COMMON SEAL of [OWNER/DEVELOPER] was hereunto affixed by authority of the Board of Directors in the presence of: Secretary Director the COMMON SEAL of [OPERATOR] was hereunto affixed by authority of the Board of Directors in the presence of: Secretary Director ANNEXURE A FORM OF NOTIFICATION TO OWNER/DEVELOPER FOR PURPOSES OF CL1 OF DEED OF OFFER You are hereby notified that your offer (see attachment) is approved and accepted with the consequences set out in the Deed of Offer, which notification is given in accordance with that Deed of Offer and on the basis that any additional formalities required for the purposes of the Darling Harbour Casino Act 1986 will be complied with. Dated the day of, 1986 [Executed by Darling Harbour Authority or Minister] ANNEXURE B FORM OF NOTIFICATION TO OPERATOR FOR PURPOSES OF CL1 OF DEED OF OFFER You are hereby notified that your offer (see attachment) is approved and accepted with the consequences set out in the Deed of Offer, which notification is given in accordance with that Deed of Offer and on the basis that any additional formalities required for the purposes of the Darling Harbour Casino Act 1986 will be complied with and without limiting the generality of the foregoing subject to the final statutory or regulatory investigations being completed. Dated the day of 1986 [Executed by Darling Harbour Authority or Minister] ANNEXURE C BANK GUARANTEE BY: (BANK) TO: DARLING HARBOUR AUTHORITY RE: CONSTRUCTION OF INTERNATIONAL HOTEL/CASINO COMPLEX The Bank hereby irrevocably agrees and undertakes subject to and in consideration of the Darling Harbour Authority (hereinafter called the Lessor) notifying the Lessee and the Bank in writing in terms of the notifications related to the attached pro forma deed of offer: - WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'225 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) (i) to pay on demand any sum or sums which may from time to time be demanded by the Lessor to a maximum aggregate of twenty five million dollars ($25 m); (ii) that this undertaking is to continue until a notification in writing has been received by the Bank from the Lessor or until this guarantee is returned to the Bank by the Lessor or until payment to the Lessor by the Bank of the whole of the said sum or such part or parts as the Lessor may require; (iii) that should the Bank be notified in writing, purporting to be signed by the Lessor that the Lessor desires payment to be made of the whole or any part or parts of the said maximum sum, the Bank irrevocably and unconditionally agrees that such payment or payments will be made to the Lessor forthwith without further reference to the Lessee and notwithstanding any notice given by the Lessee to the Bank not to pay the same; (iv) that the Bank may at any time without being required to do so pay to the Lessor the said maximum sum less any amount or amounts it may previously have paid under this guarantee, and thereupon the liability of the Bank hereunder shall immediately cease and determine. DATED at Sydney this day of June, 1986 [execution by BANK] (The portions of the deed underlined are the portions incorporated by the scheduled amendments) The deed of offer took effect, on its execution by the plaintiffs, as a deed poll to impose obligations on the plaintiffs. Those obligations fell into two groups. First, it made what may be described as (and what is described in CL1(b)(aa) as) an offer "in favour of' DHA and the Treasurer, that offer to be "irrevocable for seven working days after the date of its receipt by DHA". As ancillary to that offer, it provided that the plaintiffs should be liable, in damages and under a bank guarantee, in the event of specified breaches of the deed of offer: see CL2-CL4. Second, if notification was given in accordance with its terms, the deed gave rise to further obligations. Those obligations were, in the main, contained in CL1(b)(aa) and CL1(c) and in CL8. The main obligations were, in substance, to "enter into, be bound by and perform" the operative documents and to procure that Harrahs "enter" the relevant "casino agreement" within forty five days or such longer time as was agreed. It is in relation to this second group of obligations that the main difference exists. The Government's contention is, in substance, simple. It is that the deed offer does not, in its terms, purport to impose any relevant obligation on it: in particular the acceptance effected by the notification which it gave on 26 June 1986 did not in terms have the effect that it was obliged to execute, or be bound by the terms of, the operative documents. Therefore, the Government's contention is, it is not bound by the operative documents. The Government's contentions, as far as they proceed, are of course correct. Thus, neither CL1(b) nor CL1(c) in terms impose any such obligation on the Government. Therefore, if the Government is to be bound by the obligations of the operative documents, that must come about otherwise than by the literal terms of the document. Two things have in this regard been suggested: that the Government is so bound because of an implication, to be drawn from the deed of offer and its acceptance, that the Government will also "enter into, be bound by and perform" the operative documents; and, second, that it flows from the fact that the 26 UNREPORTED JUDGMENTS Government took benefits from what the plaintiffs did by reference to the operative documents in such a way that they are to be treated in law as binding the Government. In considering these contentions it is, of course, necessary to assume that the plaintiffs did what the deed of offer required of them or that, if they did not, the Government may have no advantage from their failure. These matters are, of course, the subject of contest by the Government. But, in considering the plaintiffs' contentions I shall make the assumptions which favour the plaintiffs. In my opinion, the effect of the making of the offer by the plaintiffs and the acceptance of it by the Government is that, by implication, the Government became bound to enter into the operative documents. This follows, I think, from the relevant surrounding circumstances of the transaction and from what is necessary for and envisaged by the performance by the plaintiffs of their obligations under the transaction. In construing the deed of offer it is proper to have regard to the overall transaction of which it was intended to be part and the part which it was to play in that transaction. These were summarised in the Explanatory Memorandum provided by the Government to those on the short list of tenderers. The explanatory memorandum indicated, I think, that what was contemplated was that all of the documents, including the deed of offer and the operative documents, would be executed by the parties named in them. The structure of the transaction, as appearing from all of the documents and as explained in the explanatory memorandum, would not work unless this was done. But the Government's contention has remained that, in effect, the transaction was to take place only if it exercised an unfettered option to proceed at two separate stages: at the stage of acceptance of the deed of offer; and at the stage of determining to execute the operative documents. And, as I have said, the question is whether the Government was bound by the transaction unless it determined to execute the operative documents. In my opinion, it is a necessary implication from the obligations undertaken by the plaintiffs in the deed of offer and upon its acceptance that the Government should be bound, in the manner to which I have referred, by obligations contained in the operative documents. This is so because, unless the Government be bound in that way, the plaintiffs would not be able to do what, by the deed of offer and the acceptance, they become bound to do. At least, in the relevant sense, it is necessary that the Government be so bound in order to give business efficacy to the arrangements. And, I think, at least on the part of the plaintiff, it would have "gone without saying" that the Government should be so bound: see Codelfa Construction Pty Limited v State Rail Authority of New South Wales 149 CLR 337 at 354-5, per Mason J. This is clearly so in relation to the matters referred to or contemplated by CL8 of the deed of offer. As I have said, the Government was anxious that the development of the site proceed with expedition. This appears from the discussions which, up to 24 June 1986, took place with DHA and, inter alia, the plaintiffs. And, after the acceptance of the plaintiffs' offer on 24 June 1986, and during the forty five day period thereafter, the plaintiffs were, as they contend, pressed to proceed with the work. CL8 of the deed of offer was, in my opinion, drawn in contemplation that the position would be generally as it in fact became. That clause required DHA, if requested by the plaintiffs, to make available to the plaintiffs access to the land on the terms there referred to; and it contemplated that, if the operative WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'2¥ DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) documents were in due course executed, what was done would be taken into account in the overall development. To the extent there provided, the Government entered into obligations upon and by virtue of its acceptance of the plaintiffs' proposal. The plaintiffs argued that the fact that the Government was bound, albeit only to the extent set forth in CL8, was inconsistent with the Government's contention that it was not bound at all by its selection of the plaintiffs and its notification of it; and the plaintiffs argued that the fact that the Government had entered into obligations of this kind supported the conclusion that, in relation to the matters referred to in, eg, CL1(c) of the deed of offer and the operative documents generally, it had also undertaken obligations. The Government submissions suggested that this is only an incidental matter and that the important question is whether it became bound by obligations of more general import as contained in the operative documents. Without pursuing these arguments further, I shall go to the obligations of the Government in relation to the operative documents. Upon the acceptance of the offer by the Government, the plaintiffs were bound to "enter into, be bound by and perform" the relative operative documents: CL1(b)(aa)(i). (I put aside the distinction between being bound and procuring the operator to be bound). And, in CL1(c) of the deed of offer, it was provided that the offer should be deemed accepted by the notification and it was further provided that it should be so deemed "so as to give rise to binding obligations on the part of the owner/developer and operator respectively and shall be to carry out... the obligations under and to exercise the rights, privileges and functions contained or contemplated by" the operative documents: (It appears that there are grammatical inexactitudes in the verbiage of CL1(c) but, I think, the meaning is clear). It is, in my opinion, important that the obligations undertaken by the plaintiffs under the accepted deed of offer are not merely to enter into and be bound by the operative documents: their obligations involve that they shall "perform" and "carry out" what those documents involve. That is inconsistent, I think, with the view that, having entered into the operative documents, the parties were, as it were, to stand by for a period until the Government determined whether it would undertake the obligations of the operative documents and that, unless and until it did so, the plaintiffs were not obliged to "perform" or "carry out" those obligations. In order to determine what it is that the plaintiffs were to do in order to "perform" and "carry out" these obligations, it is necessary to refer both to the other clauses of the deed of offer and to the terms of the operative documents. Each of these, in my opinion, involves that if the plaintiffs are to do what they are so obliged to do, the Government must do the things which under the operative documents it would be bound to do on execution of them. At least, it would be necessary for the Government to do a number of the things which, on executing the operative documents, it would by the terms of them be bound to do. The proper implication from this is, I think, that the Government was to execute the operative documents or to be bound so to do. In order to establish that, for the plaintiffs to do what they were obliged to do, it was necessary for the Government to do such things, it is not necessary to examine in detail the clauses of the deed of offer or the terms of the operative documents as attached to it. It is, I believe, not seriously in question but that, if the plaintiffs be obliged to act in the manner to which I have referred, that will be the position. Thus, to take but one example, the obligation of the plaintiffs to 28 UNREPORTED JUDGMENTS "perform" the operative documents would include their obligation to do what is prescribed in the development agreement in the Preconstruction phase of the Project. CLS of the development agreement provides for the settling of the plans and specifications according to which the development is to take place. What is to be done by the plaintiffs (there referred to as "the lessee") involves the doing of the things there referred to by the Government or the relevant instrumentality: it must co-operate in doing what is necessary to formulate the plans and specifications referred to in CL5.1 and must grant and otherwise act in relation to the permit referred to in CLS.4 et seq. It is therefore, in my opinion, to be implied that the Government has undertaken an obligation to do such things. The submission for the Government has involved, in essence, that the obligation of the plaintiffs, on the acceptance of their offer, was merely to enter into the operative documents, the suggestion being that they are not obliged to do anything under them or in pursuance of them unless and until the Government subsequently elects itself to execute them. The thrust of this is, as I understand it, that the effect of acceptance of the offer is merely that the plaintiffs are bound by the documents but nothing is further to be done unless and until the Government elects to proceed with the transaction. This is, prima facie, inconsistent with the terms of CL1 of the deed of offer. As Thave said, that clause by its terms obliges the plaintiffs, within the forty five day period referred to, not merely to "enter into" the agreements which I have described as the operative documents but also to be "bound by and perform" them and to "carry out the obligations" "contained or contemplated by" them. The Government's submission would require that those provisions be subject to an unexpressed condition to the effect that, pending the entering into the operative documents (in the sense of executing them in their final form), the plaintiffs would not and could not enter upon the performance of the relevant obligations; and that, having entered into them in that sense, they would not and could not enter upon the performance of such obligations for a further period until the Government elected whether to proceed with the transaction. Such a condition would not accord with the terms of CL1(b)(aa) and CL1(c) and the obligations which, upon the acceptance of the plaintiffs' offer, are imposed on and required to be performed by the plaintiffs. CL1(b)(aa)(i) might have been so drawn that the obligation of the plaintiffs to be bound by and to perform the agreements there referred to were expressed to be postponed to a time later than the acceptance of the plaintiffs' offer and to be conditional upon matters arising thereafter. Thus, that clause might have been drawn to provide that, upon acceptance of the plaintiffs' offer, the plaintiffs would be obliged, within the forty five day period, to enter into the agreements there referred to, to remain bound by those agreements thereafter if the Government, within a proper time, executed them, and to perform them only if and when the Government so executed them. In fact, the terms of that clause contemplate not merely that the obligation to enter into the documents will arise and be operative at once and during the period of forty five days but also that the obligations to be bound by and perform those agreements will be operative within that period. There are, within the provision, textual difficulties. Thus, the obligation to perform the agreements referred to does not mean "perform in full" but "perform to the extent practicable" or "proceed duly with the performance" of the agreements. But the obligation to be bound by and to perform is not, by the provision, postponed or made conditional upon the election by the Government. WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'229 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) The fact that the obligation to perform the relevant agreements upon the acceptance of the plaintiffs' offer and not subsequently is emphasised by CL1(c). That clause deems the offer "accepted by the notifications hereinbefore referred to as to give rise to binding legal obligations on" the plaintiffs "and (?which) shall be to carry out... the obligations under and to exercise the rights privileges and functions contained or contemplated by, the agreements... and shall also include any obligations and functions undertaken under: (i) The proposal...". Were there a requirement in business efficacy or in the necessity of the matter so to do, it might be possible, with some damages to the language of CL1, to imply the postponement of the plaintiffs' obligations to be bound by and to perform the agreements there referred to and to impose a condition upon it. Thus, it might, for example, be claimed that that which is to be performed is the agreements; that the agreements do not come into force so as to require performance unless and until the desired amendments are made to the drafts attached to the deed of offer; that those agreements are not to be performed until they have been assented to by both parties; and that therefore the obligations to be bound to perform is postponed to and conditional upon the execution of them by the Government. But I do not see, in the documents or in the surrounding circumstances, any such requirement or necessity. There is, I think, nothing in the form of the transaction to require such an approach to the language of the documents. The documents as drawn impose immediate obligations on the plaintiffs upon the acceptance of the offer and there is nothing in them which would require that the obligations which ordinarily would follow from such obligations should not be imposed on the Government. At the least, there is nothing which requires that the Government have the option to be bound or not to be bound by them. And, if and insofar as the surrounding circumstances are to be referred to, they disclose, I think, that the parties saw the need to have the plaintiffs undertake the performance of the development as soon as practicable upon the acceptance and to be bound so to do. There is, in the circumstances as known to the parties, nothing which evidences a requirement or necessity in the relevant sense, such as would justify the implication of such an option to the Government. If and insofar as it may be referred to, what the parties did - at least, what the Government said and did vis-a-vis the plaintiffs - suggests that the parties thought that they were bound in this way. As the events showed, it was possible for the plaintiffs to commence doing what was required to be done in relation to the development within the forty five day period and, to the extent referred to in the evidence, DHA appears to have pressed it in that direction. Whether it is proper, for the purpose of determining whether there is a contract or whether it contains a condition of the present kind, to refer to what the parties said and did during this period is not a matter which has been the subject of detailed argument and which need be pursued: see generally Greig and Davis "The Law of Contract", p 436 and Supplement, where some of the cases are referred to. In my opinion, therefore, the Government was bound in the manner to which T have referred. The obligations of the Government in this regard would, of course, be subject to the performance by the plaintiffs of the relevant obligations undertaken by them under the deed of offer. Thus, the Government would, I think, not be finally bound unless and until the plaintiffs had done what, under CL1(b)(aa) they were 30 UNREPORTED JUDGMENTS to do. But subject to the performance of those obligations, so far as they remain to be performed, the Government was, in my opinion, bound to enter into and perform the operative documents. It follows this that, if the Government without justification terminated the arrangements, then it was in breach of its obligations to the plaintiffs under the deed of offer. Whether it was so remains to be determined. I have, in coming to these conclusions, taken a different view from that taken by the learned trial judge. His Honour analysed the deed of offer and the attached documents at length and in terms of, as he described them, unilateral and synallagmatic contracts: see United Dominions Trust (Commercial) Limited v Eagle Aircraft Services Pty Limited [1968] 1 WLR 74. His Honour saw the case for the plaintiffs as based upon two synallagmatic contracts, one arising under CL1(b) ("Contract A') and the other under CL1(c) of the deed of offer ("Contract B"). He rejected the contention that CL1(c) "worked as an independent obligation, upon the giving of the notifications, to create self contained contractual obligations" for the reason "above all" that there were major inconsistencies between the draft agreements attached to the deed of offer and the obligations undertaken under the Proposal which the plaintiffs had previously made and which, under CLI(c), they were to carry out. And he saw CLI1(c) as creating binding obligations only "on the part of" the plaintiffs. His Honour rejected the contention that CL1(b) created a contract: he said that it "founders on much the same point" as he had referred to in relation to CL1(c). The thrust of his Honour's reasoning is set out in his judgment in the following passage: "In my view, the argument that CL1(c) worked as an independent obligation, upon the giving of the notifications, to create self-contained contractual obligations should be rejected. First, it is denied by the history of the evolution of the provision. Second, it is denied by the very words of the Deed which, as I have already pointed out, call, in CL1(b)(aa) and CL1(b)(a)(ii), for a definition of 'Offer' which is what CL1(c) in my view proffers. Above all, the submission should be rejected by reason of the fact that, in the event of inconsistency between the Proposal and the Agreements, the latter are to prevail. Major inconsistencies go to the time of commencement of obligations under the Agreements. In a number of instances the obligations are triggered off by the execution of the Agreements, as indeed the submission relating to Contract A recognises. In other words, the Agreements work to displace the statements in the Proposal for work of various kinds to be commenced anteriorly to the date of execution of the Agreements. For example, CL5.1 of the Development Agreement makes clear that the lessee should develop the land 'generally' in accordance with the lessee's Proposal. But then CL5.2 specifies that the lessee should, as soon as possible 'and in any case within 90 days after signing of this document', prepare and submit to the lessor Outline Plans and Specifications. Then, a soon as practicable after approval of those documents, the lessee is to cause Plans and Specifications to be prepared. This is not just a trigger provision. The provisions establish a regime which is completely inconsistent with any contractual obligation that, forthwith upon giving of the notifications, implementation of the Proposal is required, as distinct from permitted, to be set in train. Again, where it was desired that the time frame provisions of the draft Agreements be ameliorated favourably to the consortium, the terms of the Deed specifically so provide. Thus, under CL3.1 of the Development Agreement, the lessor is required to make the land available to the lessee, 'on the day after the date hereof' for the purposes of carrying out testing and inspecting and survey WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S3¥ DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) works and all other purposes necessary as being preparatory to construction works. This provision would disable the implementation of the Proposal for the commencement of such work immediately upon notification. Now, CL8 of the Deed of Offer undoubtedly works to confer upon the Owner/Developer the election to opt for earlier access for the self-same purposes as are dealt with in CL3.1 of the Development Agreement. But it is only because of the work that CL8 does that access prior to the date of execution of the Development Agreement is permitted and not because of the provisions of CL1(c). Once again, Mr Rayment's argument comes into clear collision with the words of the Deed. He submitted, as indeed his approach required him to do, that access 'which is merely a right when considered from the point of view of CL8, is clearly a duty when considered against the terms of the Proposal'. The suggestion that the words of the bid document, the Proposal, should override the specific provisions of the Deed of Offer directed to the same question is unsustainable. With all due respect, the submission under consideration fails totally to have regard to the actual wording of CL1(c) of the Deed. Accepting, for the purposes of the present discussion, that 'deemed' to be accepted means no more than shall be 'taken' to be accepted takes the matter no further. The consequence of the notifications is specified in terms. It is restricted to giving rise to binding legal obligations 'on the part of the Owner/Developer and Operator respectively'. The clause deals specifically and in detail solely with their obligations, their rights, their privileges and functions as contemplated by the Agreements. The submission, if accepted, would tear up the words of the Deed. Again, the proviso in CL4 of the Deed is clearly predicated on the basis that even after the giving of the notifications the only existing obligations spring from the Deed of Offer. At the end of the day, and at its highest in favour of the argument advanced by Hooker/Harrah's, all that CL1(c) of the Deed provides for is a unilateral obligation which matures into a synallagmatic contract only when the Authority and the Treasurer execute the Agreements and for the first time submit to their terms and obligations. The Deed is careful to thrust the obligations arising from the notification only on the Owner/Developer and Operator. With the possible exception of CL8 there is no specific requirement that the Government do anything. The argument in favour of Contract A founders on much the same point. As the Solicitor General rightly pointed out, not only did the Deed of Offer use the words 'approving' (CL1(b)(aa)), 'acceptance' (CL8) and 'approving and acceptance' (Annexures A and B) interchangeably but, most importantly, the forms of notification return one back to the Deed of Offer itself. This is achieved by the statement prescribed in the form of notifications that the Offer is approved and accepted 'with the consequences set out in the Deed of Offer'." The arguments for the parties before this Court were, I suspect, somewhat different from those put to the learned judge. But, however that be, two things were accepted - at least they were clear - before this Court: that the notification of acceptance of the deed of offer operated to impose legally binding obligations on the plaintiffs to do what the deed of offer and the operating documents required; and, second, that what they required the plaintiffs to do was, as far as concermed their content and certainty, such that contractual effect could be given to them notwithstanding any inconsistency between them. Therefore, the question to be determined was whether, given these things, the Government was not bound unless it chose so to be. 32 UNREPORTED JUDGMENTS The approach by the learned judge, and his conclusion, accepted that the effect of the notification was to bind the plaintiffs in terms of the deed of offer. Their obligations so undertaken included, in their terms, obligations to "be bound by and perform" and to "carry out" the operative documents attached to the deed of offer. As is clear, the plaintiffs could not do that unless the Government was bound to do the things which, under those documents, it had to do in that regard. But his Honour's conclusion was that the plaintiffs' obligations to perform and carry out their obligations were subject, in effect, to an implied condition precedent that they should not do them unless and until the Government decided that it should be bound by the agreement. And his Honour's reason for the implication of such a qualification of what, under the deed of offer, the plaintiffs had covenanted to do was, "above all', that there were inconsistencies between the operative documents and the Proposal. His Honour observed that the operative documents as drafted provided in several places for the performance of obligations contained in them to commence from the execution of the operative documents. And he drew from this the conclusion to which he referred. I differ from his Honour in thinking that such matters - I have not detailed all of the matters to which he referred - lead to the construction of the documents which he adopted. There were inconsistencies between, eg, the Proposal and the operative documents and the deed of offer and the operative documents. But the existence of inconsistencies of that kind does not lead to the conclusion that the Government was not bound by them. The fact that there were such inconsistencies was not the result of defaults on the part of the "skilled lawyers" involved. It was, I think, the result of the matters with which, as I have previously indicated, the lawyers found it necessary to cope and, in particular, the result of the demand for speed in the finalisation of the arrangement. In the circumstances, the course which they took, namely, of attaching the draft documents to the deed of offer and providing for them to be performed and carried out, was understandable. The existence of inconsistencies of the kind of which I have referred is not a reason for concluding that the Government should not be bound: it is common ground that, notwithstanding the inconsistencies, the plaintiffs became legally bound by the documents. And what they were bound to do would require that inconsistencies of that kind be resolved by the process of construction of the documents as a whole. When the position of the Government, on acceptance of the deed of offer, is properly understood, some of the difficulties seen to arise from such inconsistencies are, I think of less significance. Upon the view which I have taken, the effect of the acceptance of the deed of offer was that the plaintiffs were obliged to perform and carry out the obligations contained in the documents. The nature of the obligations meant that the Government was, accordingly, bound at once by the corresponding obligations in the document. And it followed that the Government was obliged, in due course, to execute the operative documents. It was not, of course, bound to execute them immediately upon the notification of its acceptance of the deed of offer because the plaintiffs had a period of up to forty five days in which to require that amendments be made to the operative documents in accordance with, eg, CL1(c) of the deed of offer. Therefore, the execution of the operative documents could not take place until the period for amendment had run its course. But that fact did not mean that, during its course, WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S33 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Mahoney JA) the plaintiffs and so the Government were not bound to do whatever at the relevant time was appropriate to enable the plaintiffs to perform and carry out their obligations. His Honour referred to the evolution of the documents and I have therefore considered whether the circumstances surrounding the transaction, to which properly reference may be made, warrant the conclusion other than that which I have adopted. I do not think that they do. There is, in my opinion, nothing in those circumstances which would lead the plaintiffs to conclude that the Government was not to be bound: on the contrary, if there be one thing which the surrounding circumstances would suggest to the plaintiffs, it was that, on acceptance, both they and the Government would be bound to proceed with the offer which they had made. Indeed, as the plaintiffs have urged, the Government refrained from suggesting the contrary. 5. Estoppel In view of the conclusion which I indicate, this issue does not arise for determination. However, detailed argument has been submitted and it is proper that I indicate, in general terms, the conclusions which I have reached on this issue. The estoppel set up by the plaintiffs is set forth in CL16 of the amended reply filed by Hooker and the corresponding clause in the reply filed by Harrahs. The effect of the estoppel is that the Government is not permitted to allege that the acceptance of the deed of offer by it "did not create any binding legal obligations" on the relevant parties and that those legal obligations are "not subject to any consent to the entry into the agreement" by such parties. If the Government had, on 24 June 1986, said in terms: "The Government is bound by the terms of the operative documents" or had said "The Government is bound to execute the operative documents", there could in my opinion, have been an estoppel against its subsequently denying that it was so bound, provided of course that the other requirements for the creation of an estoppel were satisfied. The form of estoppel here set up is, in my opinion, though differently phrased, the same. However, I am not satisfied that a representation to that effect was made as pleaded. The pleading bases the estoppel on the public statements made at the press conference of 24 June 1986 and, in a different form, upon the fact that between 21 June 1986 and 12 August 1986, the Government bodies in question required the plaintiff and Harrahs "to perform their respective obligations under the agreements". I do not think that what occurred, on 24 June 1986 or by such requirement as was made during the relevant period, went beyond indicating the view of the Government that, in the terms of the transaction and the deed of offer, the plaintiffs had been chosen as successful tenderers. If and insofar as a representation is to be taken from what relevantly happened, I do not think that it went beyond a representation that the plaintiffs had been chosen as successful tenderers and therefore had the rights which, under the deed of offer, they had. Any such representation did not purport to indicate a legal relationship other than such as properly was to be derived from the acceptance of the deed of offer. I do not think that the plaintiffs relied upon any such representation as is pleaded. Nor do I think that they were induced to do what they did by a representation made by the Government. The plaintiffs had, in my opinion, formed their own conclusions as to the effect of the acceptance of their offer and they acted upon those conclusions. I do not think that what was said or done by the Government had the effect suggested for the plaintiffs. 34 UNREPORTED JUDGMENTS At the commencement of the appeal, the plaintiffs indicated that they desired to amend their pleadings in relation to the issue of estoppel. In due course they sought leave to amend their respective Replies by adding a further clause to enable them to set up an estoppel different from that in CL16. It was accepted that the estoppel in CL16 is an estoppel based on representation and no more. It was desired, by the proposed amendment, to set up an estoppel of the nature of promissory estoppel. Argument proceeded in relation to the possible success of such an estoppel and whether it is now open to the plaintiffs to set it up. For the reasons I have given, I do not think that such an estoppel would be established. In addition, I do not think that the amendments sought should be permitted at this stage. A promissory estoppel involves the assessment of equities and, in this regard, it is necessary in relation to a claim of promissory estoppel to determine whether for the representor to be allowed to depart from the representation would be inequitable. No question of inequity or the like arose in relation to the estoppel by representation set up by CL16 of the Hooker Reply. Had the question of inequity in this sense been at issue at the trial, the Government's case might have been conducted differently: Mr Gyles QC who appeared for the Government at the trial indicated that further or other evidence would have been brought. In such circumstances, I do not think it proper that such amendment be allowed at this stage. 6. Restitution I have had the advantage of reading the judgment of Clarke JA. I agree in general with his Honour's views and conclusions upon this issue. Priestley Jamahoney JA has narrated what preceded the execution and delivery on 13 June 1986 of the Deed of Offer by Hooker-Harrah's, the giving of the notifications referred to in CL1(b) and 1(c) of that Deed, and the events leading to the New South Wales Government's announcement on 12 August 1986 that it had "decided not to proceed with the Hooker-Harrah's proposal". The very lengthy proceedings between the parties that afterwards were heard by Rogers J fell into four parts: the Hooker-Harrah's claim for breach of contract; the Hooker- Harrah's claim based on estoppel; the Hooker-Harrah's claim based on restitution; and the Darling Harbour Authority-New South Wales Government claim for breach of contract. Rogers J found against Hooker-Harrah's on the first three claims and against the Authority and the Government on the fourth. Appeals were brought in regard to all four claims to this court. However, at a directions hearing before the President, after discussion with the parties, and in view of the volume of documents and number of issues which had been litigated, not all of which it had been necessary for Rogers J to decide, it was ordered that the "appeal books should contain material limited to the issues..... the subject of findings by Rogers J, such issues being at least initially, the matters which the court will consider in the appeals and cross-appeals"'. This approach to the appeal was based on the idea that in the same way as it had not been necessary for Rogers J to decide all the many issues litigated before him, because if he were right on those he did decide, it was not necessary for him to decide any others, so, if the appeals against his decisions should be unsuccessful, there would be no need for the other issues to be considered in this court either. On the other hand, if certain of the grounds of appeal argued in this court were upheld, it would be necessary for this court to hear further argument in the case. This situation would arise, for example, if Hooker- Harrah's succeeded on their first claim, namely that the Authority and the Government were bound, once the notifications referred to in CL1(b) and CLI(c) of the Deed of Offer had been WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S35 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Priestley Jamahoney JA) given, to enter into the agreements referred to in CL1(b)(aa) Before Rogers J the Authority and the Government contended they were not so bound, on various grounds. The first was that on a proper construction of the Deed of Offer, although after the notifications were given Hooker-Harrah's were bound to enter into the Agreements and procure the entering into of the Casino Agreements, the Authority and the Government were under no contractual obligation, even of a conditional kind. Another ground was that if the Authority and the Government were bound, the obligation was to enter into the Agreements and the Casino Agreements after Hooker-Harrah's had, within the forty-five days stipulated in the Deed of Offer, performed their covenants concerning those agreements, that that had not happened, and that the time had therefore never come for the Authority and the Government to execute the documents. Rogers J found in favour of the Authority and the Government on the first ground. In his view they had never been contractually obliged to enter into the Agreements and the Casino Agreements, whether subject to the fulfilment of a condition or not. It was therefore unnecessary for him to rule on the other ground just mentioned. If however, this court were to take a different view on the first ground, it would be necessary to consider the second. The second ground, although mentioned from time to time in the course of the argument in this court, was not dealt with as an issue here, it being understood that should the court be in favour of Hooker-Harrah's on the first ground, the second would have to be argued at a later day. This situation is one example of the position in regard to a number of other issues litigated, but not decided, before Rogers J. As it happens, Mahoney JA, for reasons which I have had the advantage of reading in draft form, has come to the conclusion that the Authority and the Government did become subject to contractual obligations upon the giving of the CLI notifications. I have come to the same conclusion. This means that after the publication of the court's reasons on the matters that have been argued so far in this appeal, the appeal will have to stand over for further argument. I agree generally with the reasons leading Mahoney JA to his conclusion on the contract point. I will not go over the ground he covered in deciding against the argument of the Authority and the Government that any contract was subject to and conditional upon the outcome of the pending Police Board investigation. I think, however, I should state in my own words why it seems to me that the better construction of the Deed of Offer is that arrived at by Mahoney JA. The basic idea can be stated very shortly, but to allow a reader to consider its appropriateness and also the arguments against it, lengthy parts of the documentation related to the claimed contract must be set out. There seems to be no doubt about the proposition, and I do not think there was any argument against it, that upon the giving of the CL1 notifications Hooker and Harrah's became contractually bound. The Deed of Offer itself makes this clear. The Deed, to which the only parties were Hooker and Harrah's of the first part and Harrahs of the second part, began by saying that it was "between" those parties and "in favour of" the Authority and the Government. It then recited that the two parties gave the covenants in the Deed in favour of the Authority and the Government to the intent that they should be legally enforceable by the Authority and the Government in consideration of the Authority and the Minister agreeing to submit the offer to the Government. The Deed described Hooker-Harrahs, the first party, as "Owner/Developer" and Harrahs, the second party, as "Operator". CL1(a) provided that when more than one entity was named as Owner/Developer each entity was to be jointly and 36 UNREPORTED JUDGMENTS severally liable for the obligations and covenants of the Owner/ Developer. By CLI(b) the Owner/Developer covenanted that within forty-five days of notification in or to the effect of annexure "A" to the Deed by the Authority for and on behalf of the Government, the Owner/ Developer would do certain things. Part of this clause provided that the Owner/Developer agreed that the offer comprised by the Deed of Offer was to remain irrevocable for seven working days after the date of its receipt by the Authority. This agreement, being contained in a duly executed and delivered Deed, was binding on the Owner/ Developer. There is no dispute that the appropriate notification was duly given in writing to the Owner/Developer on 24 June 1986. The things that the Owner/Developer covenanted to do upon notification were stated in CL1(b)(aa)(i) and CL1(b)(aa)(ii) as follows: "(i) it will enter into, be bound by and perform agreements (the Agreements') substantially in conformity with the drafts attached hereto comprising Development Agreement, Agreement for Lease, Continuity Agreement (and will enter into, be bound by and perform the ground lease pursuant to the Development Agreement and Agreement for Lease at the time specified in the Development Agreement and Agreement for Lease) and Casino Lease, the latter to an Operator approved or to be approved by the Minister, and (ii) will procure the Operator to enter the Casino Operating Agreement, and Casino Lease (the Casino Agreements') substantially in conformity with the drafts attached hereto which the Operator covenants also to do in each case within the said 45 days (extendable by agreement between DHA, the Owner/Developer and the Operator) of the notification by DHA for and on behalf of the State of New South Wales or the Minister in or to the effect of annexure 'B' (which notification shall be valid and effective for the purposes of this Deed when given in writing under the hand of DHA or the Minister and accompanied by a copy of the notification (annexure 'A') given contemporaneously in respect of the Owner/Developer) approving the Offer hereinafter described of the Operator being an offer hereby agreed by the Owner/Developer and Operator to remain irrevocable for 7 working days after the date of its receipt by DHA." Thus, by these two sub-paragraphs Hooker-Harrah's as the Owner/ Developer bound themselves to enter into, be bound by and perform the specified Agreements and to procure Harrah's as the Operator to enter into the specified Casino Agreements. There was no explicit promise in this language to the effect that the Authority and the Government upon notifying acceptance of the offer would be bound to enter into any of the agreements referred to in the two sub-paragraphs. Clearly, it was envisaged that, in the course of events following first the giving of notification and then fulfilment by Hooker-Harrahs of their covenants, the Authority and the Government would also execute relevant agreements. The question is whether, upon the giving of the notification, they became legally bound to do so. In the weeks leading up to the execution and delivery of the Deed of Offer by Hooker-Harrahs on 13 June 1986, the solicitors for the Authority had been in constant touch with each of the consortia proposing to tender for the project. The form of the Deed of Offer itself had been drafted by the Authority's solicitors, as well as the Agreements and the Casino Agreements referred to in CL1(b)(aa)(i) and (ii) of the Deed. Changes had been suggested by solicitors for various prospective bidders, some of which were adopted as the rather complex documentation was, under the pressure of urgently getting the project under way, brought into suitable form. On 11 June 1986, the documentation was nearing WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S3¥ DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Priestley Jamahoney JA) finality. Further proposed amendments were circulated on that day to the various recipients of the draft documentation with a letter from the solicitors for the Authority. This letter said: "Tn accordance with our instructions from the Darling Harbour Authority we enclose Schedule | to the proposed Deed of Offer. The schedule comprises two parts: Part A repeats, subject to some minor drafting changes, the amendments advised to you on 6 June, 1986; and Part B sets out further amendments having regard to comments raised by one or more of the bidders. In view of the limited time available, we are circulating this schedule without the benefit of having received final confirmation from Mr Alex Carmichael that the Schedule accords with his instructions to us. We understand that Mr Carmichael will be in position to confirm this by noon on Thursday 12 June, 1986. Each bidder will be required to provide evidence to the DHA's satisfaction as to the corporate authority of the bidder to enter into and be bound by the Deed of Offer, and the authority of each signatory to execute and sign the Deed of Offer on behalf of the relevant bidder, e.g., an unqualified opinion from their solicitors addressed to the DHA and the Minister." It was in fact on the same day that Mr Carmichael confirmed the position by a letter written to, inter alia, Hooker, under the Authority letterhead and as Chairman of the Assessment Committee. I will set this letter out later. Because intending bidders were required to have the executed Deed of Offer in the hands of the Authority and the Government on 13 June 1986, there was no time to incorporate the amendments to the draft Deed of Offer in it before execution; instead, Schedule | enclosed in the Authority's solicitor's letter of 11 June 1986 was made a Schedule to the Deed. Thus the formal document upon which Hooker-Harrah's base their contract claim, when delivered by Hooker-Harrah's on 13 June 1986 embodied the Deed in its form prior to the amendments of 11 June and readily permits comparison between the Deed in that form and in its final form as amended by Schedule 1. The Deed of Offer was submitted by Hooker-Harrah's under cover of a letter dated 13 June 1986. Because this letter refers to the "final Supplement to the Proposal", later set out, it is as well to set it out too. It was addressed to the Authority, and, omitting formal parts said "RE: DARLING HARBOUR HOTEL/CASINO On behalf of the Casino 88 Consortium we submit herewith in duplicate executed Deed of Offer (including Schedule 1) and the executed final Supplement to our Proposal and the attachments therein referred to. Our Proposal comprises the following documents A. FINANCIAL Permanent Casino Our Financial Bid of 30th April, 1986 as supplemented and amended by the enclosed Final Supplement to our Proposal. Temporary Casino Our four page submission of 27th May, 1986 incorporating replacement page B. TECHNICAL Permanent Casino Our technical document captioned 'Hooker/Harrah's Temporary Casino' and dated May, 1986 together with supporting description." 38 UNREPORTED JUDGMENTS In its form immediately before the amendments of 11 June, the draft Deed contained seven clauses. I have already referred to CL1(a) and CL1(b)(aa) and have set out part of CL1(b)(aa). These were not changed by the 11 June amendments. Prior to the 11 June amendments CL1(b)(bb) read: "(bb) The Agreements and Casino Agreements shall be subject only to such modifications and additions as DNA may approve in writing ('Approved Changes') which DNA will approve only where satisfied in its absolute discretion that the modifications and additions taken as a whole do not materially adversely affect the interests of DNA and the State of New South Wales and do not contravene any applicable Commonwealth or New South Wales legislation, and subject as aforesaid, and without limiting the generality thereof also includes DNA approved modifications and additions to accommodate financing arrangements affecting the Owner/Developer or Operator or to accommodate a corporate structure approved by DNA in which the Owner/Developer or Operator proposes to hold the relevant interest. 'The Offer' shall be deemed accepted by the notifications hereinbefore referred to so as to give rise to binding legal obligations on the part of the Owner/Developer and Operator respectively and shall be to carry out in accordance with the Darling Harbour Casino Act 1986 (as amended) the obligations under and to exercise the rights, privileges and functions contained or contemplated by, the Agreements so far as these apply to the Owner/Developer and by the Casino Agreements as far as these apply to the Operator and Owner/ Developer and shall also include any obligations and functions undertaken under:- (i) documents, if any, accompanying same which have been initialled by the Owner/Developer and DHA but which shall not be inconsistent with the Agreements or Casino Agreements as the case may be nor detract from the obligations of the Owner/Developer or Operator thereunder and without limiting the foregoing shall set out and represent to DHA and the Minister so as to warrant the accuracy thereof, and up to date description as at the date thereof of all relevant facts and circumstances necessary to establish as at such date the position regarding control of the Operator and the Owner/Developer and their respective holding companies or any affiliates of any of the foregoing with an interest in casinos or gaming within the definition of 'Change of Control' in the Casino Operating Agreement and Continuity Agreement respectively and in particular also without limiting the foregoing shall include the owner of any substantial share- holding or holder of any significant voting influence falling short of control and any arrangements or understandings whereby effective control of the Board or Management thereof may be altered or influenced, as well as fully describing the existing Boards and existing principal management and in the case of an Operator or Owner/Developer which is in either case or both cases a trust, the other matters and things set forth in paragraph (c) of such definition, also as at such date, or as soon thereafter as the same are ascertainable, and (ii) a first schedule to this Deed containing such modifications and additions, if any as are proposed as essential by the Owner/ Developer and Operator respectively and as are capable of being approved as Approved Changes (but so that DHA may, but need not, give the Owner/Developer or Operator as the case may be the opportunity to withdraw or modify an item from the first schedule) and, if desired, a second schedule containing possibly desirable modifications or additions which will not be insisted upon by the Owner/Developer and Operator WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S39 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Priestley Jamahoney JA) (as the case may be) and which will be withdrawn if not agreed in writing by DHA or the Minister in the form proposed or modified form." I have set this out in full because the changes that were made to it by the 11 June amendments have given rise to construction arguments which are easier to follow if the relevant parts of the Deed of Offer are set out in the way in which they actually appeared in the executed document. One other part of the Deed of Offer documentation as it stood before the 11 June amendments which it is needful to mention at this point is the definition of "Proposal" in the draft Casino Operating Agreement. It was defined as meaning "the submission made on 30 April 1986 by the Operator and the Owner to the Darling Harbour Authority in respect of, inter alia, the Casino as supplemented and amended by subsequent correspondence and records of discussion as signed for the purposes of identification on behalf of the Minister, the Operator and the Owner." It is also convenient here to set out Mr Carmichael's letter of 11 June 1986, which in one sense at least became incorporated by reference in the Deed of Offer. The letter ran: "Under separate cover, Freehill Hollingdale and Page have despatched to you, dated today, a new Schedule | to the proposed Deed of Offer. This Schedule is a list of amendments, additions and deletions to the bound documents supplied to you on June 3. The changes have been supplied as a Schedule rather than redrafting the document. This is to assist you in examining the changes as quickly as possible. This new Schedule 1 has been prepared after careful examination of Schedule 1's and draft Schedule 1's provided by bidders last week and supersedes those Schedules. The new Schedule 1 is common to all bidders and as far as is possible at this stage, attempts to meet the various points raised by all bidders in a flexible way. As previously explained in discussions, the Agreements circulated are intended to be a consistent set of documents common to all bidders and cannot reflect the detailed corporate structures, financing arrangements and operating relationships of any individual bidder. It is for this reason that Clause 1(b)(bb) indicates that the various documents shall be subject to modifications and additions. The following indication of general principles in relation to such modifications and additions and corporate structures of necessity cannot be exhaustive or definitive nor can the DHA bind itself in advance as to how the discretions to approve will be exercised. The statement should assist bidders by indicating how, on the information currently before the DHA, it is presently anticipated discretion may be exercised. It is the desire of both the DHA and the Government that the project proceed as expeditiously as possible and therefore the successful bidder may anticipate reasonable cooperation. The following matters will be important in finalising additions and modifications. 1. The Owner/Developer and Operator entering the agreements on June 13, 1986 must be of demonstrated substance (either in their own right or by way of guarantee) adequate for the obligations required by all the agreements applicable to them. You are aware that the ability of the bidders to meet their obligations is one of the criteria on which the bids will be judged. The demonstrated expertise and competence to lawfully and properly carry out the obligations required by all 40 UNREPORTED JUDGMENTS the agreements, including consideration of the 'Control' of the Owner/Developer and Operator, have been and will continue to be an important factor in assessing bids. The ultimate party entering the Development Agreement and the Ground Lease must pass the same test of adequacy of substance, competence and control as in the bid submitted on 13 June 1986. For example, if the entity is a property trust, we will have to satisfied with the Trustee of the Trust and the Manager. If a Trust or other corporate entity enters the Agreement within 45 says it is acknowledged that at that time, the entity may not be of sufficient substance. This is likely to be acceptable providing the original bidders guarantee the Trust on a basis satisfactory to the DHA until it is of sufficient substance. We will also wish to examine the mechanisms available for adding to the substance of the property owning entity should this be necessary during the project. 2. The Operator proposed must be substantially the same entity as in the bid. For example, it may be a wholly owned subsidiary of the Operator in the bid which is either of sufficient substance in itself, or is guaranteed such that it is of comparable substance to that required of the Operator in the bid. 3. In giving its approval to a corporate structure, the DHA and the Government will have regard to the relationships between the entities and it may be necessary that those relationships and any changes to them will be subject to approval of the DHA or the Minister. For example, if the trading entity could not meet its obligations or was to fail, the Government could look to the property owning entity to ensure adequate replacement. We would anticipate that the property owning entity would have a similar interest in ensuring that its interests were protected. 4. There has been suggested to us a number of clauses which could be inserted in the Casino Operating Agreement which include, inter alia - the employment of the workforce by the Operator on behalf of the trading entity; - indemnities given by the trading entity to the Operator; - Trust accounts to be kept by the Operator on behalf of the trading entity; and - various administrative mechanisms. It is likely that these types of arrangements will be approved to reasonably accommodate the Owner/Developer and the initial Operator. Regard will however, be had to the requirements of CL803 of the Continuity Agreement in that any such arrangements must not be structured so as to make it very difficult or perhaps impossible to find a replacement operator. In this context it may be satisfactory to have some arrangements which apply only while the initial operator remains, but in which there is some flexibility if a new operator is appointed. 5. It is recognised that there may be a request that a property trust or trading trust have the liability of the trustee limited to the assets of the relevant trust and precluding the unit holder's liability beyond the amount unpaid on their units. Subject to the trust being of adequate substance and having appropriate mechanisms to ensure the continuity of this and to appropriate arrangements with respect to change of control, it is likely that such an arrangement would be accommodated. In summary, the arrangements to be entered into on 13 June provide a consistent and common basis fair and equitable to all bidders while providing adequate flexibility for the successful bidder to conclude its own arrangements with respect to financing and operating relationships and to have these reasonably WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'Stv DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Priestley Jamahoney JA) reflected in final documents so long as these, taken as a whole, do not materially adversely affect the DHA and the State of New South Wales. The DHA and the Government will work closely with the successful bidder to achieve the timely implementation of the project." It is next necessary to reproduce the relevant parts of Schedule | referred to in the two letters of 11 June 1986. These are as follows: SCHEDULE 1 This Schedule represents amendments or additions to the documents circulated by Freehill, Hollingdale and Page on 3rd June, 1986. PART A Substantially as previously circulated 1. Deed of Offer Paragraph 1(b)(bb):- Delete last 8 lines of such paragraph from the words commencing 'also includes ...' and replace with the following:- "DHA will not unreasonably withhold its approval to modifications and additions necessary to accommodate financing arrangements affecting the Owner/Developer or Operator or necessary to accommodate a corporate structure approved by DHA in which the Owner/Developer or Operator proposes to hold the relevant interest. All approvals in or contemplated by this Deed shall be in writing.' [Note: By letter dated as of 11th 1986 (sic) DHA is separately indicating the general principles likely to be applied to approval to such modifications and additions and in relation to such corporate structures, having regard to matters previously raised by various bidders.] 2 Casino Operating Agreement PART B Other Amendments or Additions 1. Deed of Offer A. The following shall be added as a new CL8: 'Rights of access to the site from notification of acceptance of this Offer are hereby given at the election of the Owner/Developer in the following terms:- 'In the event that this Offer is accepted, then the DHA shall if requested by the Owner/Developer make available to the Owner/Developer access to the Land upon the following terms: (a) The access shall be from the date of receipt by the Owner/Developer of formal notification of acceptance of this offer up to the date of execution of the Agreements; (b) Access shall be for the purpose of the Owner/Developer and persons authorised by it carrying out site testing, inspections, survey works, services diversion works and any other purpose considered reasonably necessary by the Lessee as being preparatory to construction (including without limitation, the demolition of existing structures upon the Land); (c) No fee shall be payable by the Owner/Developer for such right of access; (d) The provisions of Pt9 of the Development Agreement shall apply mutatis mutandis to the rights hereby granted; (e) The Owner/Developer shall comply with the requirements of all relevant authorities having jurisdiction in relation to the Land; (f) In the event that the DHA informs the Owner/Developer that it intends to undertake work on the Site which will be for the benefit of the Owner/Developer or the DHA determines it will undertake work that the Owner/Developer has 42 UNREPORTED JUDGMENTS indicated it wishes to undertake, the DHA may undertake that work and the Owner/ Developer will pay the costs and expenses of the DHA incurred on the work on demand from the DHA; (g) In the event that the Owner/ Developer fails within 45 days to execute the Agreements or fails to carry out the obligations hereby contemplated then the Owner/ Developer shall not be entitled to obtain reimbursement from the DHA of any costs or expenses incurred by the Owner/Developer pursuant to these rights and access to the Site shall be withdrawn.' B. The date of the Deed of Offer shall be '13 June 1986' and reference to the date of the Deed of Offer in any of the Related Documents shall be a reference to the Deed of Offer so dated, and the reference to 7 working days shall meaning 7 clear working days. C. Add paragraph '(c)' before 'The Offer' where first appearing on Page 4. D. Delete from CL1(c) the opening words 'documents, if any, accompanying same which have been initialled by the Owner/Development and DHA' and substitute the following: 'the Proposal (as defined in the Casino Operating Agreement) including "the final supplement to the Proposal" (as referred to in the DHA letter in Part Al above relating inter alia to financial terms) and in addition accompanied by the Control description elaborated below.' E. Delete sub-paragraph (ii) of CL1(c) and substitute: (ii) amendments and additions to the Agreements and Casino Agreements and this Deed of Offer contained in or contemplated by: (aa) the First Schedule dated as of 11 June 1986 sent to bidders, and (bb) any other Approved Changes as referred to in this Deed of Offer to the intent that reference in this Deed of Offer and the Offer to the Agreements and Casino Agreements shall be deemed to refer to those agreements as so amended and added to.' CASINO OPERATING AGREEMENT A D. CL101: 'Proposal' at the end of the definition add the words: 'up to twelve noon 13 June 1986, and where there is any inconsistency in such submission the most recent correspondence or such record of discussion shall prevail, and where there is any inconsistency between such submission and this Agreement or the Related Documents this Agreement and the Related Documents shall prevail'. The 11 June amendments changed that part of CL1(b)(bb) which began "The Offer" into CL1(c) and substituted new opening words in part (i) of what now became CL1(c). Although it takes some space I will set out the Opening and final part of CL1(c) in consolidated form, with a view to making it easier for a reader both to see the differences between the second last and last forms of the sub-clause and to see the last form at one glance. Consolidated, CL1(c) began and ended as follows, with the new parts underlined: "(c) 'The Offer' shall be deemed accepted by the notifications hereinbefore referred to so as to give rise to, binding legal obligations on the part of the Owner/Developer and Operator respectively and shall be to carry out in accordance with the Darling Harbour Casino Act 1986 as amended) the obligations under and to exercise the rights, privileges and functions contained or contemplated by, the Agreements so far as these apply to the Owner/Developer and by the Casino Agreements as far as these apply to the Operator and Owner/Developer and shall also include any obligations and functions undertaken under:- WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S43 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Priestley Jamahoney JA) (i) the Proposal (as defined in the Casino Operating Agreement) including 'the final supplement to the Proposal' (as referred to in the DHA letter in Part Al above relating inter alia to financial terms) and in addition accompanied by the Control description elaborated below but which shall not be inconsistent with the Agreements or Casino Agreements etc (as in the previous CL1(bb)(i)) (ii) amendments and additions to the Agreements and Casino Agreements and this Deed of Offer contained in or contemplated by: (aa) the First Schedule dated as of 11 June 1986 sent to bidders, and (bb) any other Approved Changes as referred to in this Deed of Offer to the intent that reference in this Deed of Offer and the Offer to the Agreements and Casino Agreements shall be deemed to refer to those agreements as so amended and added to." The notifications, which were not altered by the 11 June amendments were in the following form: " FORM OF NOTIFICATION TO OWNER/DEVELOPER FOR PURPOSES OF CL1 OF DEED OF OFFER You are hereby notified that your offer (see attachment) is approved and accepted with the consequences set out in the Deed of Offer, which notification is given in accordance with that Deed of Offer and on the basis that any additional formalities required for the purposes of the Darling Harbour Casino Act 1986 will be complied with." Dated day of, 1986" FORM OF NOTIFICATION TO OPERATOR FOR PURPOSES OF CL1 OF DEED OF OFFER You are hereby notified that your offer (see attachment) is approved and accepted with the consequences set out in the Deed of Offer, which notification is given in accordance with that Deed of Offer and on the basis that any additional formalities required for the purposes of the Darling Harbour Casino Act 1986 will be complied with and without limiting the generality of the foregoing subject to the final statutory or regulatory investigations being completed. Dated day of, 1986" Finally, it is material to set out "the final supplement to the Proposal" referred to in the Hooker-Harrah's covering letter of 13 June 1986 and in part (i) of CLI(c). "FINAL SUPPLEMENT TO THE PROPOSAL OF HOOKER CORPORATION LIMITED OF 175 PITT STREET, SYDNEY AND HARRAH'S OF RENO, NEVADA, USA (OWNER/DEVELOPER) HARRAH'S OF RENO, NEVADA, USA (OPERATOR) 1. WE OFFER THAT THE % OF GROSS REVENUE TO BE INSERTED IN CL1 OF Pt4 OF SCHEDULE 4 OF THE CASINO OPERATING AGREEMENT SHALL BE: 35% Note See attachment 700 module hotel (679 rooms) and new model. Hotel tower only has changed from technical brochure attached. 2. WE OFFER THAT THE OPERATOR'S FEE TO BE INSERTED IN SCHEDULE 5 OF THE CASINO OPERATING AGREEMENT SHALL BE: Basic management fee of 2% of gross gaming revenues plus an incentive fee of 6% of adjusted surplus revenues as described on attachment. 3. WE ATTACH AND SIGN FOR IDENTIFICATION, DETAILS OF THE CONTROL OF THE OPERATOR AND OWNER/DEVELOPER IN ACCORDANCE WITH CL1(c)(i) OF THE DEED OF OFFER. 44 UNREPORTED JUDGMENTS 4. WE ATTACH A COPY OF THE PROPOSAL AS DEFINED IN THE CONTINUITY AGREEMENT AND HEREBY WARRANT THAT THE COPY WITH THIS FINAL SUPPLEMENT 15 A TRUE, COMPLETE UP-TO-DATE COPY OF THE PROPOSAL AS DEFINED IN THE CASINO OPERATING AGREEMENT AS PREVIOUSLY SUBMITTED TO THE DARLING HOUR AUTHORITY. 5. WE ATTACH THE ORIGINAL OF THE BANK GUARANTEE REQUIRED TO BE SUBMITTED WITH THE DEED OF OFFER. 6. WE ATTACH SIGNED COPIES OF THE DEED OF OFFER INCORPORATING SCHEDULE 1 DATED AS OF 11 JUNE 1986 (WHICH SUPERSEDES ANY PREVIOUS DEED OF OFFER). 7. WE HEREBY AGREE THAT SCHEDULE | OR DRAFT SCHEDULE 1 SUBMITTED TO THE DEED OF OFFER PRIOR TO TODAY IS HEREBY WITHDRAWN. 8. WE HEREBY WARRANT DUE EXECUTION BY US OF THE DEED OF OFFER AND ATTACH AN UNQUALIFIED LEGAL OPINION CONFIRMING SAME. (Sgd) Signed for and on behalf of (Owner/Developer) (Sgd) Signed for and on behalf of (Operator) THE COMMON SEAL OF HOOKER CORPORATION..............55 (Sgd)...... LIMITED was hereto Director affixed by authority of) the Directors previously) (Sealed) given and in the presence Of?........ (Sgd)...... Director (Sgd) Secretary ATTACHMENT REFERRED TO IN ITEM 2 OF FINAL SUPPLEMENT 'Adjusted Surplus Revenues' shall mean Surplus Revenues as defined in paragraph 2 of Schedule 6 of the Casino Operating Agreement, with the following adjustments: (i) the Government's fee under CL801 and the basic management fee of 2% of Gross Gaming Revenues are to be deducted (ii) fixed charges such as insurance, property taxes and applicable ground rent are to be added back (iii) the final sentence of the definition of Surplus Revenues is to be disregarded. [Other attachments are not copied.]" My basic reason for thinking that upon the notifications being given to the Owner/Developer and the Operator, the Authority and the Government immediately became contractually bound to enter in due course into the Agreements and the Casino Agreements, once the Owner/Developer and the Operator had done so, is very simple. Upon the giving of the notifications the Owner/Developer became bound to enter into the Agreements within forty-five days. To my mind that means they were bound to enter into those Agreements in the sense that immediately upon entry they became bound to carry them out. They could only do this if the Authority and the Government were party to the Agreements. If the Authority and the Government were not parties then there were no Agreements for the Owner/Developer and the Operator to carry out. Putting it slightly differently, and for convenience restricting myself to the Agreements that the Owner/Developer covenanted upon notification to "enter into, be bound by and perform, " those were Agreements which the Owner/Developer could only "perform" if they were fully executed Agreements in the manner called for in the drafts attached to the Deed of Offer. The Agreements would not relevantly be agreements unless the Authority and the WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S4S DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Priestley Jamahoney JA) Government had agreed to them by executing them. For the Owner/Developer's covenants to have any content, the Agreements to be performed by the Owner/Developer must necessarily be agreements to which the Authority and the Government were parties. If Hooker- Harrah's as the Owner/Developer were contractually bound (which no-one disputes) then the Authority and the Government were contractually bound also. In my opinion, it was not possible for one side to be bound in the circumstances, in any meaningful sense, unless the other side was also to become bound. What I have just tried to explain involves the rejection of the construction arguments relied on by the Authority and the Government. The primary argument for the Authority and the Government was that although upon the notification being given, Hooker-Harrah's became bound to enter into etc. the Agreements, nevertheless the Authority and the Government were at all times until they executed the Agreements, if they did, free to decide whether or not they would do so. Only upon execution of the Agreements would they become contractually bound. Reliance was placed on the facts that the Authority and the Government were not parties to the Deed of Offer and that the deemed acceptance of the CLI(c) Offer was expressed only to give rise to binding legal obligations on the part of the Owner/Developer and Operator. Upon the simple approach I have indicated, this cannot have the result contended for. To illustrate my view by reference to specific example, one of the binding legal obligations on the Owner/Developer said to arise upon deemed acceptance of the Offer under CLI(c) was to carry out the obligations under the Agreements, the first mentioned of which in CL1(b)(aa)(i) was the Development Agreement. CL63 of that Agreement obliged the Owner/ Developer as soon as practicable after obtaining approvals, consents and authorities necessary for commencement of the project to cause the Works (which comprised the whole project complex) to be commenced and thereafter completed. It seems to me quite impossible to contemplate that such an obligation could lie upon the Owner/ Developer unless the Development Agreement were truly an agreement in the terms contemplated by the draft, that is, an agreement to which the Authority as well as the Owner/Developer was party. This kind of reasoning was explored in argument in this court on the footing that, if right, it required the implication of a term into the contract arising from the deemed acceptance pursuant to CLI(c) of the Deed. This was the way in which the argument proceeded in Bahr v Nicolay (High Court, unreported, 15 April 1988). Because the judgment was delivered only three days before the hearing of the appeals in this court began, it is not unnatural that it was not referred to in argument. Since the parties have not had an opportunity of addressing the court on the possible significance of the case, I have not relied upon it in my own reasoning. It was a much simpler case than the present one, and the point in which it is similar to the present does not appear to have been contested in the High Court. I mention it only because that similar point was treated as involving a process of implication. It may be that the simple idea upon which I am substantially basing my own conclusion in the present case is properly described as one involving implication, although I tend to think it is better described as one leading to a conclusion about the meaning of the words used in the Deed of Offer with its attached documents. Whatever the precise description of the process may be, it fundamentally involves the idea that the Agreements the Owner/Developer were going to be bound by were Agreements 46 UNREPORTED JUDGMENTS to which the Authority and the Government were going to be parties. That is what the language used in the documents conveys to me. The second main argument relied upon by the Authority and the Government drew attention to the words "deemed acceptance" in CL1(c) and the form of the notifications. It was then said that the notifications were not an unconditional acceptance of the offer comprised by the Deed of Offer. This, it was said, showed that the "deemed acceptance" did not constitute consideration moving from the Authority and the Government. If the meaning I have attached to the Deed of Offer is correct, then this argument can not succeed. On the view I take of the meaning of the documentation, the deemed acceptance at once imposed an obligation on the Authority and the Government to execute the Agreements immediately the Owner/Developer had fulfilled their CL1(b)(aa) covenants. This seems to me to be consideration abounding. Meeting the same argument somewhat differently, and casting the situation entirely in terms of offer by the Owner/ Developer accepted by the Authority and the Government, it seems to me that the offer took the form "We hereby offer to become bound to you on certain terms and conditions (necessarily involving both you and us in executing certain Agreements and procuring the execution of others) and we inform you that the offer can be accepted by giving us a particular form which, in the absence of the special definition of the acceptance we are inserting in the offer, would not ordinarily be an acceptance appropriate to bring a contract into existence, but which we inform you will for us be sufficient, once handed to us, to bring into existence the contract which will bind us both." Although the idea in the foregoing formulation can doubtless be better and more precisely expressed, its substance seems to me to be contained in CL1(b) and CL1(c). The Authority and the Government made submissions in this court based on what were said to be inconsistencies between the language in CL1(b)(aa) and CL1(c). These apparent inconsistencies indeed seem to have led Hooker-Harrah's in their submissions to Rogers J to attempt to maintain that CLI1(b) and CLI1(c) gave rise to separate contracts called contracts A and B, binding on the Owner/Developer, the Authority and the Government. A good deal of time seems to have been spent by Hooker and Harrah's in attempting to persuade Rogers J that contract B, said to spring from acceptance of the Offer in CL1(c), and which had some difficult features, represented the true construction of the documentation. Rogers J did not accept this submission, for reasons which he detailed, and with which, in many aspects, I respectfully agree. Contract A was said to flow from the giving of the notifications and the operation of CL1(b) There seems to have been less emphasis on this submission before Rogers J than there was on the contract B submission; however, in this court, although traces of the contract B argument surfaced, the principal emphasis was upon contract A. The view I have reached resembles the contract A conclusion for which Hooker-Harrah's contended. On this approach CL1(c) is explanatory, and not independent, of CL1(b); further, CL1(c) adds to the content of CL1(b) but does not in my opinion work independently of it. Although the contract A argument rejected by Rogers J appears to have been presented to him in a form somewhat different from the final form of Hooker-Harrah's argument in this court, it seems that his principal reasons for rejecting it were essentially the same as those advanced for the Authority and the Government against the finding of any binding agreement upon the Authority and the Government in this court. These were principally the first two of the arguments I have earlier discussed. The essential difference between the approach WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S¥ DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Priestley Jamahoney JA) of Rogers J and that which I favour, seems to be that whereas, in my opinion the Agreements the Owner/Developer were bound to enter into etc, were Agreements which could only be really accounted as Agreements if the Authority and the Government likewise entered into them, Rogers J thought the words of the documents were so strongly against such a construction that he was not prepared to take adopt it. There are other somewhat miscellaneous considerations which, although by no means decisive, have influenced what I think is the appropriate construction and which seem to me to be worth mentioning. The Hooker-Harrah's letter of 13 June 1986 which submitted the executed Deed of Offer and the executed final supplement to their Proposal is couched in a conventional form signifying the making of an offer the acceptance of which will bring into existence a contract between offeror and offeree. CL1(c) of the Deed of Offer, in its executed form, shows a particular emphasis on eliminating any sources of uncertainty in what was being offered. The provisions concerning the Proposal defined in the Casino Operating Agreement and the final supplement to that Proposal, together with the final form of the definition of that Proposal in CLI101 of the Casino Operating Agreement all demonstrate, as appears from other parts of the documentation in its final form, an intention to have the Deed of Offer and associated documentation in such a form, that, if accepted, a binding contract would result. This seems to me to be apparent from the operative parts of the final supplement to the Proposal delivered, together with the executed Deed of Offer, with the Hooker-Harrah's letter of 13 June 1986. Similarly, the provisions of Mr Carmichael's letter of 11 June 1986 seem to me to be directed to a more difficult aspect of the same objective. All parties were conscious of the shortness of time for getting the project under way. Binding contractual arrangements were essential before the project could get under way. The putting into final order of all the necessary documentation after the practical decision to choose Hooker- Harrah's as the successful tenderer might well take some time. Mr Carmichael's letter of 11 June 1986 fits in consistently with the whole of the Deed of Offer documentation as showing an intention to get on foot binding contractual arrangements, which would, nevertheless, permit revision and rearrangement of the contractual documentation, subject to the approval of the Authority and the Government. The idea quite clearly was, first to choose the successful consortium for the project, then to get binding contractual arrangements on foot and then within the framework provided by those arrangements to bring the detail of the documentation, if necessary and agreed to by the Authority and the Government, into a varied final form. This statement of the patent objectives of the Deed of Offer and its acceptance mechanism does not conclude the question whether Hooker, Harrah's, the Authority and the Government were all to be bound upon the notifications being given, or only Hooker and Harrah's. But the aspects of the documentation that I have last mentioned and those parts of the documentation I have reproduced, all seem to me to go better with the idea of all the parties being bound than only Hooker and Harrah's. The foregoing miscellany of considerations strengthens my opinion that what l earlier called the basic reason for my conclusion, leads to the most appropriate construction of the documents in the case. For reasons earlier explained, such a conclusion means that the appeal will have to stand over for further argument. This is so notwithstanding that the Hooker-Harrah's claims based on estoppel and restitution were fully argued, as 48 UNREPORTED JUDGMENTS was the claim by the Authority and the Government for breach of contract. The practical question presents itself, would it be useful or proper for me, having reached this point, to consider the arguments on the three other claims that were argued. In regard to estoppel and restitution, the answer seems to me to be clear. The first part of Hooker-Harrah's contract claim should, in my view, be decided in their favour. This conclusion would seem to put an end to the estoppel case. The first thing to be considered on the further hearing of the appeal will be whether the fact that Hooker and Harrah's did not jointly execute the Agreements within the forty-five days limited by the Deed of Offer to start running upon the giving of notification, provides an answer or the basis of an answer by the Authority and the Government to the Hooker-Harrah's contract claim. If it does provide an answer, that does not necessarily mean the estoppel case would again be open. If it does not provide an answer to the claim, then clearly it will not be necessary to consider the estoppel argument. Further, any consideration now of the estoppel argument involves the postulation of a set of facts, including at least one, the non-existence of contractual obligations upon the Authority and the Government, contrary to my own opinion. Had I come to the conclusion that Hooker-Harrah's failed on the first step of their contract argument, I would have been in a position to decide on an actual rather than a hypothetical basis, what were the facts upon which the estoppel argument should be considered. Thus the present position is that it is not only not necessary to consider the estoppel argument, but to do so would involve looking at the total factual situation in a way which at present I am not really content to do. The same considerations apply with added force to the restitution claim. To consider that at this stage would involve me in not only setting aside my actual conclusions on the first claim, but further setting aside my hypothetical conclusions on the second claim. I would be dealing with the restitution arguments at a second order assumption level. I prefer not to do that. The Authority-Government claim has similar problems. This claim alleges that Hooker and Harrah's failed to enter into and be bound by and perform the Agreements and Casino Agreements. It is then claimed that those breaches entitled the Authority and the Government to at least $25 million damages and to call upon the Bank Guarantee given pursuant to CL3 and CL4 of the Deed of Offer in the sum of $25 million. Since the question whether Hooker-Harrah's failed to enter into etc the Agreements and Casino Agreements has yet to be decided and since it was foreshadowed in the argument already heard by this court that questions either of estoppel or in the nature of estoppel or waiver will be relied upon by Hooker- Harrah's to show that even if the allegation of failure to enter into etc is literally correct nevertheless the Authority and the Government should not be heard to say so, any decision on this claim of the Authority and the Government at this stage would also be on a hypothetical basis. In short, it seems sensible to me to defer deciding each of the second, third and fourth claims until the fate of the first claim is decided. It will then be known which, if any of the remaining claims need to be decided and there should be a firm basis for reaching any necessary decision. Clarke JA Darling Harbour was a forgotten area of Sydney. The Government of New South Wales decided to revitalise it. It proposed to do so by a redevelopment plan which involved both privately and publicly funded projects. The public developments included an exhibition centre, convention centre, waterfront promenade, harbourside park, Chinese landscaped garden, National Maritime Museum and the Powerhouse Museum. The important private WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S49 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Clarke JA) developments included Harbourside Festival Markets, a monorail to link all of the attractions of Darling Harbour with the centre of the city and an international hotel in which a casino was to be operated. On 30 November 1985 the Government advertised in the daily press inviting the private sector to put forward proposals for the development of, inter alia, the international hotel and casino. The advertisement, in part, read: "The New South Wales Government will hold the licence for the casino and no other licensed casino will be allowed to operate in New South Wales. The Government will rent the casino facility from the property owner. The casino will be managed on behalf of the Government by an experienced casino manager of high repute who meets strict requirements for obtaining and annually renewing a permit to operate a casino in New South Wales." The appellant in each of the two cases which have been heard together, that is, Hooker Corporation Limited ("Hookers") and Harrah's were among those companies which registered expressions of interest. On 11 December 1985 a brochure providing additional information for registrants was distributed to those who might be interested. In its introduction it said "The (Darling Harbour) Development will be phased however the Government wished the casino, access and car parking, to be completed as soon as possible, preferably in The evolution of the tender by Hookers and Harrah's, the submission of the offer on 13 June 1986, the receipt of the notifications of acceptance and the announcement by the new Premier of New South Wales on 12 August 1986 that the Government would not be proceeding with its proposed agreements with Hooker and Harrah's has been traced in the judgment of Mahoney JA which I have had the privilege of reading. No point is to be served by traversing the same path. Furthermore, his Honour has set out in his judgment the salient features of the texts of the relevant documents. In order to avoid repetition and to assist an understanding of the reasons which lead me to my conclusion I propose to limit my quotation from the documents as far as possible. The initial question which was debated is whether the Government (which expression I have used in this judgment to include the Darling Harbour Authority, the Treasurer, Mr Booth, and the Nominal Defendant, Mr Haines) became contractually bound to Hookers and Harrah's by notifying acceptance of the offer of 13 June. The answer to this question depends essentially upon the construction of the offer, and the documents incorporated therein, and the notifications of acceptance. However, those documents must be understood in their context and it is desirable that I refer shortly to the circumstances which led to the submission of the deed of offer on 13 June 1986. Hooker/Harrah's submitted their final bid for the development of the hotel and casino on 30 April 1986. Following the submission of this bid the Government set in motion the investigations which it had earlier announced it would have carried out and at the same time involved itself in extensive negotiation with Hooker/Harrah's and the other consortia which lodged bids. The investigations are relevant mainly on the question whether the agreement, if any, concluded by the notification of acceptance of the Deed of Offer on 24 June was conditional upon the receipt by the Government of favourable reports from those bodies and persons who were, according to the Government announcement, to carry out the investigations. I agree with the conclusions of Mahoney JA that any agreement was not conditioned upon any favourable reports for the reasons which his Honour gives in his judgment. Accordingly it is unnecessary to concern myself any further with that aspect. 50 UNREPORTED JUDGMENTS The negotiations which took place between the Government and the various bidders concerned the terms of the respective bids and the proposed agreements which were intended ultimately to bind the Government and the successful bidder. Initially there was some uncertainty as to the nature of the agreements which would be signed but at a meeting between Hookers/Harrah's and the Darling Harbour Authority on 20 May Mr Carmichael, the Chief Executive of the Darling Harbour Authority, indicated the Government intention that draft documents setting out the relationship between the various parties should be prepared, signed by every bidder and submitted to the Government. When the Government decided which tender to accept then, according to Carmichael, it was proposed that the successful consortium and its financiers would negotiate any outstanding details and the integration of the financing into the structure of the agreements. What was then in mind was that the Government would grant a ground lease for 99 years to the owner/developer (although a draft development agreement seems also to have been in contemplation) who would in turn grant a sub-lease of the gaming parts of the complex for an initial period of ten years to a casino operator. There would, in addition, be an operating agreement between the owner/developer, the Government and the operator and a continuity agreement between the Government and the owner/developer concerning the appointment of an operator. On the next day Carmichael sent to Hookers a set of draft documents which he said should be regarded as first drafts. He sought from Hookers/Harrah's, and he made it plain that he was seeking the same information from the other bidders, an indication of those aspects of the draft documents which required further discussion and re-drafting. Included amongst the documents was a draft form of deed of offer of which Carmichael said: "T particularly draw your attention to the draft covering agreement which we would expect to get bidders to sign before papers are submitted to State Cabinet for decision." The Government was anxious that the development proceed with all possible haste and the bidders were conscious of the need for an early decision to enable them to adhere to the timetable which had been proposed. All negotiations took place in an atmosphere of extreme urgency which imposed great demands upon those who were involved in the re-drafting. However the magnitude of the task caused some rethinking of the proposed schedules although even at 30 May it was proposed that the so-called "Covering" Agreement should be signed by 5 June. Some idea of this urgency can be gleaned from the fact that as late as 3 June a set of revised draft documents was sent by the Government's solicitors to the bidders for their consideration although Carmichael had not reviewed those documents. Needless to say the drafting of the documents had not been concluded by 5 June and that date passed without the submission of signed covering agreements. On 11 June the Government solicitors sent a draft Schedule | to the proposed Covering Agreement which was then described as the Deed of Offer. The schedule was divided into two parts. Part A set out, with some small amendments, alterations to the draft agreements which had been advised on 6 June and Part B set out further amendments resulting from discussions after that date. Later on the same day Carmichael wrote to Hookers referring to the schedule and explaining that the proposed amendments had been collected in a schedule rather than WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'Ssv DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Clarke JA) incorporate into the draft agreements in order to assist the bidders to examine the changes proposed as quickly as possible. Carmichael also confirmed in the letter his earlier statements that as the agreements which were circulated were intended to be a consistent set of document commons to all bidders they could not reflect the detailed corporate structures, financing arrangements and operating relationships of each of the bidders. He then pointed out that this feature of the draft documents had led to the inclusion within CL1(b)(bb) of the Deed of Offer of a statement that the various agreements should be subject to modification and additions. In order to meet the exigencies of the situation on 13 June Hooker/Harrah's and, I gather, the other bidders each submitted executed Deeds of Offer, which were in the form submitted on 3 June, together with schedule 1 which set out all the agreed amendments. The Deed of Offer incorporated not only the Development Agreement and Agreement for Lease, the Ground Lease, the Casino Operating Agreement and Casino Lease, and the Continuity Agreement but in addition the bid of 30 April, which was described in the Deed as the proposal, and a final supplement to that Proposal. Two forms of notification and a bank guarantee which was referred to in CL4 of the Deed of Offer were also annexed to it. One form of notification concerned the notice to be given to the owner/developer and the other the notice to the operator. The notifications were identical except insofar as the latter conditioned the acceptance upon, inter alia, final statutory or regulatory investigations being completed. Two observations should be made at this stage about the deed of offer and associated documents. In the first place the number of persons involved in the drafting of the documents and the great urgency with which this was attended are more than sufficient explanation for the construction difficulties which have arisen. In the second place the need for an executed Deed of Offer which imposed an obligation upon one party, at least, to enter into the final agreements, drafts of which were incorporated in the Deed, is explained by the fact that none of the agreements was tailored to meet the requirements of a particular bidder. The draft agreements were drafted in a general form without regard to the financing and structure proposed by the successful bidder with the intention that the final agreement be modified, to the extent allowed in the Deed of Offer, so as to accommodate the corporate structure and financing arrangements proposed by the successful bidder. Obviously the Government wished to ensure that once a decision had been made the successful bidder would be contractually bound to proceed with the development. This was necessary because otherwise the Government may have found itself in a situation where the chosen consortium changed its mind. It is in that background that I come to consider the terms of the Deed of Offer and the notifications the giving of which are said to have contractually bound the Government. I have already indicated the Government's need to ensure that Hooker/Harrah's were contractually bound once they had been notified of the acceptance of their offer. There was, according to the Government's argument, no corresponding need for the successful bidder to have the Government bound prior to the execution of the finally agreed documents. It was then submitted that the combination of this fact and the terms of the Deed of Offer allow only of the conclusion that the Government was free to withdraw from the arrangement or negotiations at any time prior to the execution of final agreements. Hooker/Harrah's became contractually bound to carry out the provisions of the 52 UNREPORTED JUDGMENTS Deed of Offer upon notification of the acceptance whilst the Government remained free to withdraw from the arrangements for any reason at all. The contract was, it was put, a unilateral one under which one party only bound itself to perform the stated obligations. Rogers J accepted this view of the effect of the Deed of Offer and there is much in favour of it including the terms of the Deed of Offer. It nominates two parties only, Hooker/Harrah's as owner/developer and Harrah's as operator and expresses the Deed to be in favour of "Darling Harbour Authority (DHA) and Kenneth George Booth, Treasurer of the State of New South Wales (the Minister)". It contains express covenants by the owner/developer and the operator but no corresponding covenants by the Government. Acceptance of the offer comprised in the Deed was to be effected by notifications which relevantly read: "You are hereby notified that your offer is approved and accepted with the consequences set out in the Deed of Offer..." The consequences referred to are clearly those which appear in CL1(c) of the Deed of Offer: *(c) 'The Offer' shall be deemed accepted by the notifications hereinbefore referred to so as to give rise to binding legal obligations on the part of the owner/developer and operator respectively and shall be to carry out in accordance with the Darling Harbour Casino Act 1986 (as amended) the obligations under and to exercise the rights, privilege and functions contained or contemplated by, the agreements and shall also include any obligations and functions undertaken under: (i) the Proposal (as defined in the Casino Operating Agreement) including "the final supplement to the Proposal" and (ii) amendments and additions to the agreements and casino agreements and this Deed of Offer contained in or contemplated by: (aa) the First Schedule dated as of 11 July 1986 sent to bidders; and (bb) any other approved changes as referred to in this Deed of Offer to the intent that reference in this Deed of Offer and the Offer to the Agreements and Casino Agreements shall be deemed to refer to those agreements as so amended and added to." This clause contains, according to the Government's argument, an expression in the clearest possible terms of the fact that it is only the owner/developer and operator who are subjected to binding legal obligations upon giving of the notification. No where does there appear in this clause, or in any other part of the Deed of Offer, a statement to the effect that upon the giving of the notifications there arise legal obligations binding on the Government. In addition there are, not surprisingly, indications in the draft documents incorporated in the Deed of Offer, such as the draft development agreement, that steps are to be taken under the agreements only upon the execution of the relevant agreement. That feature of the draft documents is said therefore to support the view that the Government did not become contractually bound to the successful bidder until execution of the final agreements. It must be accepted that in principle the terms of draft documents which are incorporated in an executed agreement and which it is intended should form the basis of final agreements to be executed between the parties could have a bearing on the proper construction of the executed agreement itself. The extent of that bearing will depend very much upon the wording of the various documents and the circumstances of the transaction under consideration. In the present case I do WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'Ss3 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Clarke JA) not consider that the fact that expressions in the draft agreements to the effect that obligations arise under them upon execution lends any support to the Government's argument. On the contrary the normal expectation would be that obligations which arose under the agreements themselves only did so from the time of their execution. There was however, as will later be seen, an anomalous provision in Schedule 8 to the draft Operating Agreement which suggests, at least, that the Government and the owner/developer became bound upon the giving of notifications to take the particular steps referred to in the Schedule. Nonetheless the submission of the Government which were essentially based on the fact that the Deed of Offer expressly imposed (in CL1(c)) binding legal obligations on the owner/developer and operator, and not the Government, and was granted in favour of the Government have much force. On the other hand the procedures adopted whereby the bidders were required to submit Deeds of Offer with provision for acceptance by the Government appear unduly complex if all that was intended was to ensure that the successful bidder was contractually bound to proceed. It would appear to me that the object could have been achieved by extending the period of irrevocability of the offer for 45 days, for instance, from the date of notification. Indeed counsel for the Government at one stage submitted that that was the effect of the Deed of Offer although its terms provide scant support for that submission. If that had been done then after the selection of the successful bidder the Government would have been the beneficiary of an irrevocable offer by Hooker/Harrah's to develop the casino and hotel in accordance with the proposal which had been submitted on 30 April and upon terms which had been negotiated before the submission of the offer and were recorded in it. In my opinion the Deed of Offer was intended to have a greater effect than that. In determining the extent to which the Government became contractually bound upon giving the notification - it was undoubtedly bound to provide access under CL8 of the Deed of Offer - it is, I believe, important to keep firmly in mind that there never was at any relevant time any question of the Government's intention to proceed with the development. The Government had, in a sense, committed itself to the development of Darling Harbour and the hotel and casino constituted an important part of the development. All parties undoubtedly participated in the negotiations upon the basis that the hotel and casino would be built. Obviously a number of matters had to be settled before the Government contracted with a particular consortium for the completion of the project and the operation of the casino. The successful bidder had to be selected, the terms of the agreement or agreements had to be negotiated and the bidders had to pass the tests imposed in the four review mechanisms referred to in the Treasurer's media release of 16 April 1986. The media release made it quite plain that the review mechanisms were to be utilised in the selection of the successful bidder so that all parties to the negotiations were entitled to, and almost certainly did, proceed upon the basis that the bidder who was ultimately selected had met the standards demanded in the review mechanisms. Accordingly the expectation of both the Government and the bidders was that all that was delaying the project proceeding was the settlement of the terms of agreement and the selection of the successful bidder. It was simply not in contemplation that if a bidder was selected and terms agreed the project would not proceed. 54 UNREPORTED JUDGMENTS However, time constraints appear to have dictated the two stage scheme which was adopted by the Government. Although a bidder may not have wished to settle on a final corporate structure or to finalise the financial details prior to being notified of the success of its bid there was simply not enough time to enable negotiation of separate contractual documents satisfactory to each individual bidder which could be signed upon acceptance of the offer of the successful bidder. In these circumstances draft forms of agreement comprising terms satisfactory to the Government and conforming in principle with the wishes of the bidders generally were prepared upon the basis that approved amendments which took account of the needs and desires of the ultimately successful bidder would be effected after the giving of the notification. Accordingly the settling of the general terms of agreement and the selection of the successful bidder (by the Government) would have been regarded by all parties as signifying the Government's satisfaction with those terms and the acceptability of the successful bidder. In the light of the evidence which demonstrated the Government's continuing intention to proceed with the development no question would have been likely to arise in the minds of those involved in the negotiation as to whether the Government would proceed. These aspects of the negotiation might be thought to be supportive of the Government's submissions in that they explain the absence of any statement in the Deed of Offer signifying that the giving of the notification bound the Government to enter into the agreements with the successful bidder. In other words there was simply no need to bind the Government. But in my view they operate in quite a different way. They operate to point up the adequacy of those expressions in the Deed of Offer which suggest that the Government became bound to enter into the agreements upon the giving of the notifications. This view of the background of the submission of the Deeds of Offer and the giving of the notifications is strengthened by the fact that, as the Deed of Offer itself makes clear, the 45 day period allowed for entry into the final agreements was not to enable the Government to make further inquiries or require amendments to the documents but was to facilitate the adaptation of the general agreement to the particular needs of the successful bidder. It is in that context that I come to consider the terms of the relevant documents. Clause 1(b)(aa) of the Deed of Offer expresses the covenant by the owner/developer that it would within 45 days of notification by the Government "enter into, be bound by and perform agreements ('the agreements') substantially in conformity with the drafts attached". This expression imposed obligations upon the owner developer which necessarily involved the cooperation of the Government. The owner/developer could not unilaterally enter into the agreements referred to. It could, no doubt, have executed the agreements and tendered the executed copies to the Government by way of exchange without cooperation from the Government. However that is not what the clause provided for and in this respect it is worth comparing CL8(g) which adverted expressly to the execution of the agreements. The clause (CL1(b)(aa)) required the owner/developer to enter into the agreements and these words seem to me to provide a clear indication that the obligation was a mutual one. For the owner/developer could not strictly be said to be entering into the agreements if it tendered executed documents to a party which had already disclaimed any intention of participating in the agreements or at least had expressed doubts on WROOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'Ss& DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Clarke JA) the matter. Lest that approach be thought unduly technical support for it is to be found in the words immediately following. The phrase "perform agreements" is the most significant. The obligation undertaken by the owner/developer was "to enter into - and perform agreements" within 45 days. Performance necessarily assumes the existence of agreements which are binding on the parties. Thus the pertinent phrase provides the clearest possible indication that the owner/developer's obligation was not simply to execute and tender by way of exchange a document which would become a binding agreement upon receipt of a counterpart executed document from the Government. Implicit in the concept of "entering into and performing" the agreements is the notion that the other party will itself enter into the agreements within the stated, or any later agreed, time. The same idea arises from the use of the expression "be bound by". The owner/developer would not be bound by the terms of the agreement simply upon execution of the agreement, or tender of an executed copy by way of exchange, unless and until the other party performed its part in constituting the agreement one binding on all parties. Counsel for Hooker and Harrah's addressed arguments on the question whether the phrase under discussion should be regarded sequentially in the sense that the obligation lay upon the owner/developer to enter into the agreements and, once having done so, then accept their binding nature and perform them or whether there was an absolute obligation undertaken immediately upon notification of acceptance of the Deed of Offer to be bound by and perform the agreements. While I tend to the view that as a general proposition the sequential approach is the correct one it really does not seem to me to matter which is correct. On either view the owner/developer covenants to enter into and perform, which must mean, commence to perform, the agreements within 45 days. As I have sought to point out these obligations can only be complied with if the Government for its part enters into the agreements within the specified time. If this view is correct then the unqualified terms of the covenant in clause 1(b)(aa) necessarily means, or implies, that the Government will (in the sense that it is bound to) itself enter into the agreements. To put it another way the granting of the covenant in absolute terms and not conditioned upon, for instance, the Government's execution of, or entry into, the agreement involves an acceptance of the notion that the Government itself was bound, at least, to enter into the agreements within the specified period. As I have sought to point out this approach is consistent with CL1(b)(bb) which expressed the reason for the Deed of Offer, the notifications and the later execution of the agreements. That is, the binding of the parties to an obligation to proceed in accordance with agreements which, while agreed in principle, required modification to accommodate the particular situation of the owner/developer and operator. That clause, which is couched in terms indicating that amendments or modifications will emanate from the owner/developer or operator rather than the Government, expressly provides that the Government will not unreasonably withhold its consent to those amendments designed to accommodate financing arrangements affecting the bidding parties or necessary to accommodate a proposed corporate structure which was approved by the Government. In the context of the need to adapt draft agreements generally satisfactory to a number of tendering parties to the particular circumstances of the successful bidder the Deed of Offer should be seen as an offer which upon acceptance constituted an outline agreement between the parties which made its own 56 UNREPORTED JUDGMENTS provision for the necessary amendments. If that is the underlying reason for the preliminary agreement constituted by notification of acceptance of the Deed of Offer submitted by Hooker and Harrah's then no reason appears why the Government should not itself have been bound by that agreement. There are in addition other features of the documentation which provide support for the view I have expressed. In CL1(c) the offer, which is referred to in the Deed on a number of occasions, is defined in these terms: "'The Offer "...Shall be to carry out in accordance with the Darling Harbour Casino Act 1986 (as amended) the obligations under and to exercise the rights, privileges and functions contained or contemplated by, the agreements....". The agreements therein referred to are clearly enough those which are set out in CL1(b)(aa) and accordingly the offer is to undertake the relevant obligations and exercise the specified rights etc under those agreements. Even though the clause speaks of binding legal obligations on the part of the owner/developer and operator its whole thrust is to equate the giving of the notifications with acceptance of an offer under which the offeror undertook obligations and became entitled to exercise rights and privileges. Those rights and privileges, or at least many of them, could not be exercised without the cooperation or consent of the Government. Consequently the giving of the notification constituted the acceptance by the Government of an offer containing terms entitling the offeror to exercise rights under the incorporated draft agreements and necessarily bound the Government to accede to the offeror those rights once it accepted the offer. Seen in this light the notification should be regarded as binding the Government at least to the extent necessary to enable the owner/developer and operator to exercise those rights. Further significant support for the bilateral nature of the contract is to be found in CL8 of the Deed. Under this clause the owner/developer was given, at its election, "rights of access to the site from notification of acceptance of this offer". This clause is capable of being viewed only as imposing upon the Government the obligation to accord those rights. This was undoubtedly a contractually binding obligation. The owner/developer could not have obtained access for the preparatory works referred to in the clause without the permission of the Government and by this clause the latter bound itself to make access available. The clause stands as a clear barrier to the suggestion that the Government did not become contractually bound in any respect upon notification of the acceptance of the Hooker/Harrah's offer. Rogers J considered that although contractual rights did arise under the clause they concerned only the period between notification and the execution of the final agreements. In other words the clause should be regarded as severable from the rest of the Deed of Offer and as granting the owner/developer contractual rights in respect only of the interregnum between notification and execution of final agreements. I prefer the view that the clause expresses part only of the contractual obligation undertaken by the Government upon the giving of notification. The need for access prior to the execution of the final agreements arose from the urgency with which the development was attended. If the owner/developer were to conform with the timetable which had been laid down it was essential for it to have early access to the site. For this reason the Government expressly granted the necessary rights to enable work to proceed prior to execution of the final agreements. WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S5¥ DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Clarke JA) Furthermore the Deed of Offer contains a strong indication that the rights were to be granted on the basis that the Government would itself execute the agreements. This indication arises from the fact that the only reference to the contingency that the agreements might not eventually be executed (set out in sub-clause (g)) directs attention to a failure by the owner/developer to execute the agreements within 45 days or to carry out the obligations contemplated under the Deed. The provision which is made for the withdrawal of the right of access and the lack of an entitlement of the owner/developer to obtain reimbursement for the costs or expenses incurred in the preparatory work carried out under its rights of access applies only if the owner/developer is responsible for the breakdown. The absence of a provision concerning the rights of access and the costs of preparatory work in the event that the Government doesn't proceed suggests to me that no one contemplated a Government withdrawal. I have earlier indicated that the terms of the draft agreements which were incorporated in the Deed of Offer are not of substantial assistance in the construction of the Deed of Offer. There are however some provisions in the operating agreement dealing with the temporary casino which tend to be more consistent with the construction for which I opt than the alternative one. The parties contemplated that prior to the completion of that part of the hotel in which the casino would be sited the operator would open and conduct a temporary casino. Such a casino would facilitate an early inflow of cash receipts and provide for the training of those operators who would be working in the new casino. Furthermore it was hoped that the temporary casino would commence operations by 1 January 1987. The relevant portion of the Operating Agreement was pt13 which read: "13.01 Temporary Casino Forthwith after entering into this Agreement, the Minister, the Owner and the Operator shall consult with a view to agreeing upon a Temporary Casino Site upon which the Operator will be authorised to conduct gaming operations and establish a Temporary Casino as contemplated by s65 of the Act until the Opening Date of the Casino and the Minister agrees to use reasonable endeavours to make a decision whether or not to approve a proposed site for the Temporary Casino with reasonable promptness upon a submission being made by the Owner as to the proposed site for the Temporary Casino. 13.02 Application of this Agreement to the Temporary Casino Except as modified by the provisions of Schedule 8 hereto, the provisions of this Agreement in relation to the Casino apply with equal force to the Temporary Casino as though the Temporary Casino were the Casino." (The words underlined were introduced by Schedule 1 which was notified on 11 June.) Schedule 8, which is referred to in CL1302, was headed "Modifications to Agreement for Temporary Casino" and contained two clauses of particular significance. They were (1) and (2): 1. On being advised that it is the successful bidder the Owner will forthwith consult with the Minister with respect to alternative locations and arrangements for a temporary casino. 2. With the benefit of guidance received from the Minister, the Owner will proceed to negotiate the best possible commercial terms for location at a site or sites recognising that the Minister must in his discretion designate a casino as the Darling Harbour Casino for the purposes of the Darling Harbour Casino Act 1986 58 UNREPORTED JUDGMENTS on a temporary basis. The parties agree that they will use all reasonable endeavours to decide on a site by 31 July 1986 and to commence operations by Ist January 1987." (The broken underlining is mine and the sentence underlined was introduced by Schedule 1.) The obligation upon the parties to consult arose on the giving of the notification. In addition, bearing in mind that the offer was submitted on 13 June and that it was unlikely that the 45 day period which commenced on the giving of the notification of acceptance would have expired by 31 July 1986 there is an overwhelming inference that the parties accepted that they were obliged to use the endeavours referred to and to consult prior to the execution of the Operating Agreement itself. No doubt the operating agreement would not have any force or effect until execution. The binding nature of those obligations could arise only from the contract constituted by the acceptance of the Deed of Offer and, in particular, CLI(c). If that clause is to be interpreted as binding only the owner/developer then the obligations which CL1 and CL2 of Schedule 8 to the operating Agreement cast upon the Government would be incapable of enforcement. The clauses would be no more than empty statements by the Government. This is a most unlikely conclusion. If on the other hand CLI1(c) of the Deed of Offer is to be interpreted as imposing corresponding obligations on the owner/developer and operator on the one hand and the Government on the other to enter into and perform the operating agreement then it operates to bind the parties to comply with the obligations expressed in those clauses in accordance with the terms and notwithstanding the non-execution of the operating agreement. Before concluding I would observe that like Rogers J I would reject an approach that propounded the existence of two contracts as a consequence of the notification of the acceptance. His Honour dealt at some length with the submission that each of CL1(b)(aa) and CL1(c) of the Deed of Offer gave rise to an independent contractual obligation. The reasons given by his Honour for rejecting those arguments seem to me to be persuasive. However, that approach was not maintained on the appeal. Rather the appellants argued, correctly in my opinion, that the notification of the Deed of Offer created Contractual obligations binding on both the Government and the owner/developer and operator to enter into, be bound by and perform agreements substantially in the form of the documents referred to in the Deed of Offer subject only to the modifications alluded to therein. A necessary consequence of this conclusion is that the Court will now be required to consider those aspects of the appellant's case which it was not necessary for Rogers J to deal with. A Particular issue which arises is whether there was any obligation on the part of the Government to enter into the agreements in the light of the happenings between 24 June and 12 August. This issue will, or may, involve factual considerations of a nature similar to those which arise under the alternative claims of estoppel and restitution which were pressed unsuccessfully by the appellants before Rogers J and submitted to detailed argument in this court. The conclusion that the Government, by notifying acceptance of the Hooker/Harrah's offer, became contractually bound to enter into the various agreements means that it is strictly unnecessary to consider either of these claims which were relied on in the alternative by the appellants The question then arises WRQOKER CORPORATION LIMITED v DARLING HARBOUR AUTHORITY; HARRAH'S59 DARLING HARBOUR AUTHORITY; DARLING HARBOUR AUTHORITY v HOOKER CORPORATION LIMITED (Clarke JA) whether it is desirable to consider these alternative claims at this stage upon the hypothesis that the Government was not contractually bound upon delivery of the notifications of acceptance. Like Priestley JA I do not think it is and wish to add only some observations on the restitution claim. The principle upon which this claim was based was expounded by Goff J (as he then was) in British Steel Corporation v Cleveland Bridge and Engineering Co Ltd, [1984] 1 All ER 504, at 511. Rogers J, who observed that the law of restitution was still in an evolutionary stage (Pavey and Matthews Pty Ltd v Paul, 61 ALJR 151), ultimately posed the question - "Would it be unjust not to recompense Hooker and Harrah's for the expenditures they made in furtherance of the project at the insistence of the Government that the dates in the proposal be adhered to?" His Honour held that it would not be unjust for two reasons. Firstly, in the circumstances the consortium members accepted the risk and secondly, Harrah's failed to disclose that it was the subject of pending investigations in the United States which failure disentitled both Hooker and Harrah's from successfully maintaining the claim. These findings were said to be incorrect but with respect to the arguments to the contrary a conclusion that his Honour erred in these two respects would not necessarily lead to the upholding of the restitution claim. Accepting for the moment that his Honour posed the correct question it seems to me that the answer depends, in part at least, on an evaluation of all the circumstances up to 12 August when the Government expressed its determination not to proceed with the project. Those circumstances, at least those which arose after 24 June, will be subjected to careful analysis during the breach/repudiation argument and it seems to me therefore quite inappropriate to proceed at this stage to consider the restitution claim while the possibility remains that factual findings will be ultimately made which might falsify the bases of any conclusion. Similar considerations apply to the Government claim for $25,000,000 liquidated damages. For these reasons I agree with Priestley JA that it is more appropriate to defer a decision on the issues of estoppel, restitution and the Government's damages claim. I would propose therefore that the appeal be stood over to a date to be fixed for the giving of directions for the hearing of the outstanding issues. Appeal stood over.