The South Australian Government circulates in the Tenders on Call list for the Departmentof Planning, Transport and Infrastructure (DPTI) a public tender call as follows:

Pt Adelaide Maritime Museum Complex Bond Store Air Conditioning Upgrade

Contract Name

Pt Adelaide Maritime Museum Complex Bond Store Air Conditioning Upgrade

Trade Contractor Air Conditioning

Selection of successful tender will be based on most competitive price.

Specifications can be downloaded at www.exope.titoog/sol

Tender Close Date 17 June 2019 5.00pm

ConditionersRBute submits a fixed price lump sum tender of $3.2 million to supply, fit andinstall industrial air conditioning to the Port Adelaide Museum, dated 17 June 2019, bycourier. ConditionersRBute's tender contains the following clauses:

This tender is valid to 5pm 27 July 2019.

Public liability insurance will be provided to the value of Ten (10) million dollars.

During the weeks following ConditionersRBute's tender submission, the CommonwealthGovernment announces in a media announcement they are introducing a Bill for carbon taxto apply to suppliers of products that use carbon energy. The proposed carbon tax will applyto suppliers and installers of air conditioning units. The scheme will increase the cost ofsupplying and installing air conditioning units to ConditionersRBute by 30%. The mediaannouncement did not come as a surprise as ConditionersRBute has been part of anindustry campaign group lobbying against carbon tax from applying to air conditioning andheating sales. Concerned that the tender they submitted was priced too low and that theywould make a substantial loss, ConditionersRBute sends a letter to DPTI on 16 July 2019stating:

Due to the application of the Federal carbon tax imposed on ConditionersRBute, weregret to advise that our tender regarding air conditioning upgrades at Port AdelaideMaritime Museum dated 17 June 2019 is withdrawn with immediate effect.

This letter arrives at DPTI's offices five days later on 21 July 2019.

On 19 July 2019, DPTI had mailed via Australia Post a letter to ConditionersRBute stating:

We are pleased to accept your tender dated 17 June 2019, subject toConditionersRBute increasing public liability insurance cover to Forty ($40) milliondollars. Please confirm your readiness to commence work asap to DPTI's emailaddress: DPTI.sa.gov.au

DPTI's letter arrived at ConditionersRBute's offices on 22 July 2019.

After intense media scrutiny and public backlash, the Federal Government officiallywithdraws the Bill proposing carbon tax to apply to suppliers and installers of airconditioners on 23 July 2019. Upon discovering that carbon tax will not apply to the supplyand installation of air conditioning systems, ConditionersRBute wants to reinstate the dealto install and supply the air conditioning system at Port Adelaide Maritime Museum. On thesame day, ConditionersRBute sent the following email to an email address provided by theDPTI:

We have negotiated with our insurance agent to increase public liability insurance toforty ($40) million dollars and would now be prepared to provide our services to theState Government of South Australia in accordance with terms and conditions set outin tender dated 17 June 2019.

The email was not read by a DPTI representative until 25 July 2019 as the network serverwas not working and the administrative assistant was away on sick leave.

On 24 July, DPTI had sent a letter by email to ConditionersRBute's trade rival, AirConditioners R Us, who made a competitive tender bid on 15 June 2019 in the lump sumamount of $3.0 million. AirConditioners R Us' tender incorporated public liability insuranceof Fifty (50) million dollars. The email sent by DPTI to AirConditionersRUs' email addressstated:

We are pleased to notify AirConditioners R Us that your tender bid dated 15 June2019 for the supply and installation of air conditioning systems at Port AdelaideMaritime Museum was successful.

When hearing that AirConditioners R Us have been awarded the contract, the directors of

ConditionersRBute are furious and assert that:

- a binding contract already exists between ConditionersRBute and the StateGovernment for the supply and installation of air conditioning systems at PortAdelaide Maritime Museum; and

- the State Government is in breach of that contract.

Advise whether a contract has indeed been formed between ConditionersRBute and theState Government to supply, fit and install the industrial air conditioning at Port AdelaideMaritime Museum and, if so, whether there has been a breach of this contract by the StateGovernment.