At this meeting, Forrest tabled an offer believed to be worth in the vicinity of $50 million, with a significant portion of the funds allocated to grass roots rugby.
Forrest also gave an unconditional guarantee that the Force would be no financial burden on the ARU if the team was retained in the competition, meaning he would bankroll any potential losses.
But Vaux said the ARU did a backflip and rejected the proposal, leaving Forrest stunned.
"It is now clear that the ARU did not attend the meeting in Adelaide with the intention of resolving a mutually acceptable agreement, as said previously by ARU Chairman Cameron Clyne," RugbyWA chairman Tony Howarth said.
The Force enjoyed a minor victory on Wednesday morning when they were granted the right to appeal the ARU's decision to axe the team.
The hearing was conducted in the NSW Supreme Court later that day, and a decision is expected to be handed down within a fortnight.
RugbyWA argued the ARU had no right to axe the Force under the terms of the 'alignment' deal that was struck last year.
In that deal, which was effectively a takeover, the ARU guaranteed the Force's future until at least the end of the broadcast deal in 2020.
But the ARU successfully argued in arbitration that a new broadcast deal is now in place given the competition will go from 18 teams to 15 in 2018, thus giving them the right to axe the Force.
If the Force's appeal is unsuccessful, Forrest has pledged to start up a new international rugby competition that will see the franchise compete with teams from Asia.
Ross Xenos, the chief executive of the Rugby Union Players' Association, said he was stunned and bewildered the ARU didn't accept Forrest's offer.
"We feel it was an opportunity for the game to put itself back on financial footing and to save the game, rather than saving face," Xenos said.
