The members of the Port Phillip Association did not intend the treaty to be a fair commercial transaction, but a means of obtaining permission from the Aboriginal peoples to avoid resentment (and subsequent violence) after settlement, whilst convincing the colonial and imperial authorities that they should be allowed to settle the land.
The association knew that existing British policy (the Nineteen Counties Order) was designed to prevent such settlement, but hoped to challenge the authority of the New South Wales government, who held jurisdiction of the Port Phillip area.
According to Batman’s petition to the Lieutenant Governor of Van Diemen's Land George Arthur, he and Wedge would proceed immediately to the district with stock, and only married servants (with their wives) would be allowed to accompany them.
On 26 August the Governor of New South Wales, Sir Richard Bourke issued a proclamation that effectively voided Batman's treaty, whatever its merits, as the British government did not recognise Aboriginal title to the land.
When they returned to the Yarra River site on 2 September, they found the area already occupied by an independent expedition financed by a Launceston businessman, John Pascoe Fawkner, which had landed on 30 August.
While the government in London was deciding what steps it should take in relation to the unlawful occupation of this remote and unsettled part of the existing colony of New South Wales, other settlers from Van Diemen’s Land followed suit, and soon Port Phillip became inundated with stock, squatters and servants, including escaped convicts.