My understanding is that no matter what preference they gave, all applicants are considered equally for the course. I guess that if they're both over the cutoff, they'd both get offers, and if the uni doesn't have enough spaces they'd adjust the cutoff accordingly.
I have the answer for this:
Say that there is a cutoff of 100 students for a certain course, and the ATAR cut off is 90.00. The course is almost full and currently has 99 students in the course so far. However, there are another two applicants with the same ATAR which is 90.00 (perhaps they have ATARs of 85.00 and are getting an offer in the third round, regardless the two applicants are the last two that could possibly fit in the course). Now, the university has to treat these two candidates equally and will either reject both applicants or the admissions director will contact the Dean and request if another position can be made to accommodate the extra student.
It is likely that the Admissions officer would take the second route, and most likely approved by the Dean of the faculty, since there is only one extra applicant being admitted. If, however, there were 5 applicants (or more - don't take my word on the amount of students) in the same situation then the outcome may be different.
If someone were to reject an offer or defer, who was already qualified for that course with an ATAR of, say, 93.50, then there would of course be room.
I hope this helps a little with the technical aspects of offers.
Good luck to all.
I just met the cut-off ATAR (based on last yr) for UNSW Comm/Law but was unsure whether I should put USyd Comm/Law as a higher preference over UNSW in the slight chance that the ATAR cutoff for the USyd course decreased slightly this year. Hopefully ATAR cutoff for UNSW Com/Law doesnt increase this yr! 