A decision to enter into a controversial land deal at Gillman was “unlawful”, ignorant and made with disregard to “prudent commercial principles”, the Supreme Court has ruled.

The judgment of Justice Malcolm Blue on an application for judicial review of the contract awarded – without a tender process – to Adelaide Capital Partners paints a scathing picture of the procedure by which the deal was done.

It is particularly scathing of the role played by then-Renewal SA chief Fred Hansen, who was moved on by Premier Jay Weatherill last May. Half of Renewal SA’s board resigned almost immediately after the government agreed to sell 400 hectares in Gillman, north of Adelaide.

Justice Blue found “the decision by the Chief Executive to enter into the Contract was a decision that no reasonable person in his position could rationally have made”.

“The decision … was made in ignorance of matters that were fundamental prerequisites to making an informed, prudent or rational decision,” Justice Blue found.

“It was an irrational decision.”

The court determined that the alternative course of “marketing and selling the Land in an open and competitive process was not considered beyond being identified as an alternative, nor were its advantages and disadvantages considered”.

“The Chief Executive failed to have regard to prudent commercial principles in deciding to enter into the Contract.”

However, the court found that while the contract was entered into unlawfully, it was not void.

The action was brought by Acquista Investments and Veolia Environmental Services.

InDaily understands there is likely to be an appeal.

The Gillman deal was the subject of an upper house inquiry. Adelaide Capital Partners had until the end of December to accept an exclusive option to develop the site. The Government confirmed they took up the option in the last week of December.

Planning Minister John Rau said that “other than to say that the Deed was upheld by the Supreme Court and the plaintiff’s action was dismissed, I do not propose to comment on the judgment given the plaintiff has indicated that it will appeal”.

“Renewal SA has undergone significant change in the past 12 months, including the appointment of a new Chief Executive and change in senior management,” he said.

“I am confident this agency will deliver significant projects for this State into the future. The State Government has also implemented new guidelines on unsolicited bids.”