Betfair Pty Limited & Anor v State of Western Australia

[2007] HCATrans 165

[2007] HCATrans 165

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Canberra  No C2 of 2007

B e t w e e n -

BETFAIR PTY LIMITED

First Plaintiff

MATTHEW EDWARD ERCEG

Second Plaintiff

and

STATE OF WESTERN AUSTRALIA

Defendant

Directions

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 26 APRIL 2007, AT 11.55 AM

Copyright in the High Court of Australia

MR S.J. GAGELER, SC:   If your Honour pleases, I appear for the plaintiffs.  I also appear on the directions hearing for the Attorney-General of Tasmania intervening in the interests of the plaintiffs.  (instructed by Gilbert & Tobin)

MR R.J. MEADOWS, QC:   May it please the Court, I appear for the defendant with MR R.M. MITCHELL and I also have instructions to appear on behalf of the Attorneys‑General for Victoria, Queensland and South Australia at this directions hearing.  (instructed by State Solicitor’s Office WA)

HIS HONOUR:   Yes.  There is no involvement of New South Wales yet, is there?

MR GAGELER:   Not at this stage.

MR MEADOWS:   My understanding, your Honour, is that they are proposing to intervene.

HIS HONOUR:   In whose interest?

MR MEADOWS:   In the interests of the defendant.

HIS HONOUR:   Thank you.  Yes, Mr Gageler.  I would be assisted before we get too far into it.  I have the 2006 Act here.  That is the Betting and Racing Legislation Amendment Act 2006. If you could take me through that statute and explain briefly what you say is the impact of, firstly, section 92 and, secondly, section 118 then I will ask Mr Meadows if he wants to add anything to what you have said.

MR GAGELER:   Yes.  If your Honour goes to section 7 of the amending Act it inserts section 24(1aa), the effect of which is to prohibit a person in Western Australia betting with a betting exchange.

HIS HONOUR:   That is because one reads, in accordance with ordinary concepts, I suppose, a person who bets is a person who bets in Western Australia.

MR GAGELER:   Yes, that is right.  There are some provisions in the Criminal Code (WA) that make that even clearer. It is the common understanding of the parties that properly construed it prohibits a person in Western Australia betting through the use of a betting exchange wherever situated. If your Honour then goes to the definition of “betting exchange” which is inserted by section 6 of the amending Act inserting section 4AA into the principal Act, your Honour will see the definition and your Honour will also see that part of the definition is the exclusion of somebody betting only with a bookmaker, meaning a registered Western Australian bookmaker or a totalisator, which is another form of betting facility, again registered and regulated under Western Australian law.

That is one of the two prohibitions that is challenged as being contrary to section 92 of the Constitution, that is. The prohibition in section 24(1aa) is said by us to be discriminatory in two ways. One is when one reads the whole context of the Western Australian legislation together, this Act and another Act that establishes and controls the operation of a body called RWWA, a bookmaker or RWWA is not prohibited from setting up a betting exchange. This is a form of facial discrimination, although it involves reading a number of bits of legislation together. The effect is that a person is prohibited by section 24(1aa) from betting with a betting exchange outside Western Australia but not with such betting exchange as may be established by a bookmaker or RWWA within Western Australia.

HIS HONOUR:   Just stopping there for a minute, the definition of “betting exchange” talks about enabling persons to place bets, to put it basically.

MR GAGELER:   Yes.

HIS HONOUR:   Is that understood as meaning to place bets in Western Australia?

MR GAGELER:   No, your Honour.  As I said, it is the common understanding of the parties that the prohibition in 24(1aa) involves the person acting in Western Australia but allows the betting exchange to be situated somewhere else.

HIS HONOUR:   Yes, I see.

MR GAGELER:   So there is the facial discrimination and there is also a practical discrimination of the kind that was considered in Castlemaine Tooheys, in our submission, because there is only one betting exchange currently operating in Australia and that is the betting exchange operated from Tasmania by Betfair, and so far as the protectionist character of the legislation is concerned, your Honour, we say it emerges from a number of features of the legislation and of the context that we have set out fairly fully in the pleading. So that is the first prohibition challenged on the basis of section 92.

If your Honour then goes to section 9 of the amending Act, it inserts a number of provisions including section 27D, and your Honour will see that section 27D prohibits a person in Western Australia or elsewhere from publishing a Western Australian race field, and for the definition of “WA race field” you need to go back to section 27C, and it means:

information that identifies . . . the names or numbers of the horses or greyhounds –

running in a race. What that does is purport to prohibit, amongst others, Betfair in Tasmania publishing to persons throughout Australia information about Western Australian horses and greyhounds running in races. That gives rise to its own section 92 issues and, perhaps more interestingly and fundamentally, it also gives rise to a direct conflict between the Tasmanian legislation which authorises Betfair to publish such information in Tasmania on the Internet, available to anyone using the Internet, and the Western Australian provision that prevents or purports to prevent Betfair from so acting in Tasmania.

HIS HONOUR:   Insofar as that is the correct construction of the impact of the prohibition in 27D upon activities countenanced under the Tasmanian statute, how do you say that conflict is resolved, that clash is resolved between the two State statutes?

MR GAGELER:   Your Honour, we are conscious of the difficulties that have been raised in relation to that issue.  I did not, for the purposes of directions here, I am afraid come up with a fully formulated plan

HIS HONOUR:   It is in the statement of claim, is it not?

MR GAGELER:   Of course, yes.

HIS HONOUR:   That talks, does it not, about section 118?

MR GAGELER:   Section 118 is a possibility, yes.

HIS HONOUR:   I think the defendants have got to know sooner or later.

MR GAGELER:   I would not say that the text of 118 necessarily resolves it.  Of course I will be saying it should be resolved in favour of the Tasmanian statute.

HIS HONOUR:   The reason why I raised it with you is it does not seem to be crystal clear in your pleading at the moment.

MR GAGELER:   No.

HIS HONOUR:   It would be embarrassing if the State would be required to plead to it now.

MR GAGELER:   No, we really did not see it as a matter for pleading your Honour.  It will be a matter for submission and I did not want to come along ‑ ‑ ‑

HIS HONOUR:   No, I do not think that is right.  I think it is a matter of amending your statement of claim when you have got your clarity of vision as to what you want to put as the legal construct.

MR GAGELER:   I am happy enough to do that, yes.

HIS HONOUR:   It has to be taken into allowance in the timetable, that is all.

MR GAGELER:   Yes, we will do that, your Honour.

HIS HONOUR:   All right. So the second section, as to section 92, you say that is facial as well as practical or whatever the correct label is?

MR GAGELER:   Yes.  I think this is, when you go through the processes that are involved in being able to publish the Western Australian race field, one needs the consent of the Minister and before getting the consent of the Minister one needs the consent of RWWA.  So it ties back in to a particular Western Australian entity, in effect, having control of the publication of information that is necessary to allow for betting to occur on Western Australian events.  So, yes, facial but also practical.  Of course, the interstate trade involved here is not just interstate trade between Tasmania and Western Australia, unlike the earlier prohibition it looked at.  Here the effect of the prohibition will be to prevent the publication of the information from Tasmania available to persons in other States as well.

HIS HONOUR:   Just explain that distinction between the two sections again.  I understand what you are saying about 27D but as to 27B.

MR GAGELER:   Section 27D, your Honour?

HIS HONOUR:   No, I understand what you have just said about 27D.

MR GAGELER: The other section I was referring to was section 24(1aa). That is a prohibition on a person in Western Australia betting through the use of a betting exchange, so it affects interstate trade between Western Australia and Tasmania. The effect of the other provision insofar as section 92 is invoked is to affect interstate trade between Tasmania and other States in Australia.

HIS HONOUR:   Yes, I see what you are saying.  With that background, why is there no stated case?  There was one in Castlemaine, I understand.  It was 86 paragraphs long.

MR GAGELER:   I thought it was a special case, your Honour.

HIS HONOUR:   You may be right.  I will just have another look.  Yes, you are quite right.  Agreed certain facts in the special case, yes, you are quite right.  What is your understanding as to why this is the appropriate way to go?

MR GAGELER: Because the nature of a section 92 case post Cole v Whitfield is one that involves the characterisation of the legislation as protectionist or not.  The great difficulty with a case stated is with crystallising facts in a way that will allow for argument at the appropriate level, whatever that is, about that form of characterisation.  The parties are content, subject to the most minor of refinement, that the facts as have been agreed will allow them to make such arguments as they wish to make about the character of the legislation.  To attempt to do it as a case stated without the possibility of inference, your Honour, we think would be fraught with difficulty.

HIS HONOUR:   It does seem to bring in its baggage train three huge folders.

MR GAGELER:   Yes, but what will be distilled from that material by each party will be a number of fairly succinct propositions.  Neither party would feel comfortable, I think, with those propositions simply being asserted without the context from which they are drawn.

HIS HONOUR:   Yes, I understand that.  Why do you need 50 pages?  Sir Maurice Byers used to say if you need more than five, you are in trouble.

MR GAGELER:   Your Honour, I do not need 50 pages to deal with the legal arguments. 

HIS HONOUR:   Yes.

MR GAGELER:   For the purposes of putting the legislation in context, I am afraid that we need to tell the Court quite a lot about the structure of the Western Australian industry.  The Court also unfortunately needs to know something about the way in which betting occurs and can occur.  Much of that is set out in the special case but the special case has been deliberately confined by the parties to the facts.  To get the full picture, one needs to put the facts with a rather complex set of legislative provisions.

We would be happy enough, your Honour, to say that 25 of those 50 pages that we thought might be necessary would be devoted to setting out that industry structure.  We do not want that many pages for argument and your Honour is not going to get an unduly complex set of submissions from us.

HIS HONOUR:   It is a matter for you, but to the people who have to read these submissions in advance of the hearing, it helps to be able fairly immediately to perceive a legal skeleton, as it were, without too much fat on it.

MR GAGELER:   Of course, yes.

HIS HONOUR:   Maybe the submissions can be divided into parts and some of this material put in a schedule to the primary submissions.  It is a question for the parties really.

MR GAGELER:   We would be happy to do that if your Honour would ‑ ‑ ‑

HIS HONOUR:   The end result is cognition by me and my colleagues.

MR GAGELER:   Of course.  We are generally bound by the structure that is forced upon us by the practice note, but if your Honour would allow us to depart from that structure simply for that purpose, we would gladly do so.

HIS HONOUR:   Yes, I would.

MR GAGELER:   The 20 pages in reply, if I could mention that, is simply because we expect a lot of interveners.

HIS HONOUR:   Yes, I understand that.  I hope they do not turn up with folders of how they arrange their betting operations.

MR GAGELER:   We have been pretty careful, your Honour.  I think we have covered that off in our own material, apart from the legislation of course.

HIS HONOUR:   All right.  How long would you need to amend your statement of claim to deal with the clash point?

MR GAGELER:   Your Honour wants me to do some profound thinking well before the submissions.

HIS HONOUR:   Yes.  There is plenty of time.  Perhaps I should indicate that it is a question really of looking at the Court’s commitments.  It is a question really of the second week of the August/September sittings, by which time we should have seven Justices again.  That would be the week of Tuesday, 4 September, or the September/October sittings.  But the timetable should be prepared as against the prospect of the week starting 4 September.  I think it is a seven‑Justice case myself.

MR GAGELER:   Your Honour, the parties were not sure about the length of time.  We inserted four days in this draft.  We have just had some discussions and suggest three days may be enough.

HIS HONOUR:   I would have thought three; I would not have thought two though.  I will ask Mr Meadows what he says about these things in a minute.

MR GAGELER:   Your Honour sees the second proposed direction has the parties having leave to file an amended special case on or before 28 May.  I will mention why that is there in a moment, but if your Honour would also allow that date for the amended statement of claim, we could work towards that.

HIS HONOUR:   All right, I will ask Mr Meadows.  Mr Meadows, is there anything you want to add at this stage to these points that Mr Gageler was making in taking me through the 2006 Act as to the general landscape of the case?

MR MEADOWS:   I think the way in which he has explained the way in which the plaintiffs put their case is a fair summary.  We would not accept though that a licensed bookmaker or a totalisator agency in Western Australia could operate a betting exchange.  In other words, we do not accept his construction of section 24(1aa).

HIS HONOUR:   Just explain that a bit more to me.

MR MEADOWS:   We say that under regulations under the Betting Control Regulations a licensed bookmaker could not lawfully operate a betting exchange and also that a licensed bookmaker is not authorised to accept a bet that a participant in a race or sporting event will not be successful or that a contingency will not occur by virtue of section 4B of the Betting Control Act.  We also say that it is not possible to conduct a betting exchange by means of a totalisator because totalisator betting is a parimutuel system of betting under which all bets of the same kind in relation to the event are pooled.  Anyway, that can be left for another day but we certainly do not accept that ‑ ‑ ‑

HIS HONOUR: Does that mean that on some contested construction of the Act no section 92 facial problem would arise?

MR MEADOWS:   That is right, your Honour.

HIS HONOUR:   Yes, I see.  But the practical discrimination might still arise.  That may be the argument, I do not know.

MR MEADOWS:   That would be the argument, your Honour.

HIS HONOUR:   Is that so, Mr Gageler?

MR GAGELER:   I think on any view RWWA is not prevented from running a betting exchange in Western Australia so even if what Mr Meadows submits is correct – and it seems to us to turn on delegated legislation rather than the legislation itself – then a bookmaker in Western Australia is unable to conduct a betting exchange.  That is not so for the entity known as RWWA.  It can do so.

HIS HONOUR:   All right.  Thank you.  Yes, Mr Solicitor.  Is there anything else?

MR MEADOWS:   We would take issue with that, your Honour, because RWWA could not accept a bet which is one which would operate through a betting exchange as a matter of construction, but I suppose these arguments can be left for another day.  I think, as I have said, my learned friend has outlined the nature of the issues, I think, fairly and squarely.

HIS HONOUR:   As to 27D and the phrase “or elsewhere” there, regardless of whether he is right or wrong as to validity, but do you accept that that is how the Act should be read?

MR MEADOWS:   It applies not just to Tasmania.

HIS HONOUR:   No, but it does apply to Tasmania.

MR MEADOWS:   It would apply to Tasmania.

HIS HONOUR:   And, he says, Tasmania, Victoria or Tasmania, Queensland.

MR MEADOWS:   Yes, we would accept that that is right.

HIS HONOUR:   I am just trying to find out what the parameters are of the arena.

MR MEADOWS:   Yes, I understand.  With regard to the directions, we have no objection to an amended statement of claim by 28 May.  We have nothing to say about the length of the proposed submissions on behalf of the plaintiffs.  So far as we are concerned, we would be content with 30 pages mainly because we would see that the facts would have been outlined fairly comprehensively by the plaintiffs.

HIS HONOUR:   Yes.  Shall I make that 30 in 4?

MR MEADOWS:   Yes, we would be content with that, your Honour.  As to the duration of the hearing, we would agree that three days should be sufficient and we would be amenable to the hearing commencing in the week of 4 September.

HIS HONOUR:   I cannot be sure that is possible, but I think the first available is not before then, put it that way.

MR MEADOWS:   I understand that, your Honour.

HIS HONOUR:   Now, the parties at the moment are unresolved as to some paragraphs of the draft I have been supplied with, is that right?

MR MEADOWS:   Yes, your Honour.

HIS HONOUR:   Paragraphs 25 to 26 and 86.  Can that be sorted out fairly soon?

MR MEADOWS:   We believe so, your Honour.  You will note that we are hoping to resolve outstanding differences by 30 April.

HIS HONOUR:   Yes, all right.  Now, what is the idea behind suggested direction number 2, an amended special case?  What would the amendments be?

MR MEADOWS:   Perhaps Mr Gageler should address you on that, your Honour.  We understand what they are but it would be better if he put it.

MR GAGELER:   They are his issues, your Honour, but I am happy enough to explain.

HIS HONOUR:   I do not like giving blank cheques.

MR GAGELER:   Your Honour may have seen that the defence raises a couple of non-constitutional issues and they are issues about whether Betfair’s Tasmanian licence confirms to the requirements of the Tasmanian

Act. They do not have any bearing on the section 92 issue. They may have a bearing on the issue arising from the conflict of State laws. One possible way of removing those issues entirely might be to take some administrative steps in Tasmania and if those administrative steps were to be taken, then it would seem appropriate to update the facts recorded in the special case.

HIS HONOUR:   I would still want to see it though.

MR GAGELER:   Of course, your Honour.  It would be possibly adding an extra paragraph explaining what has occurred in relation to the Tasmanian licence.  Your Honour would wish to see it before granting leave I understand?

HIS HONOUR:   Absolutely, yes.  All right, but I could give the leave in chambers if need be.  Do you need to put on an amended defence, Mr Solicitor, to this amended statement of claim?

MR MEADOWS:   It might be wise to give us the opportunity your Honour.

HIS HONOUR:   Yes, I think so, yes. 

MR MEADOWS:   I think something like 10 to 14 days after what is proposed.

HIS HONOUR:   Thank you.  Just give me a minute.  If counsel could look at the draft they have, paragraph 1:

1.The Court notes that the parties will file a special case pursuant to Part 27.08 of the High Court Rules substantially in the form of the current draft on 30 April 2007.

2.An amended special case may be filed on or before 28 May 2007 but only with the prior leave of a Justice.

3.The plaintiffs have leave to file an amended statement of claim on or before 28 May 2007 and any amended defence may be filed on or before 11 June 2007.

4.The plaintiffs and any interveners in support of the plaintiffs file written submissions on or before 6 July 2007.  The plaintiffs have leave to file written submissions of up to 50 pages in length and to vary the usual structure of such submissions as they may be advised.

That covers you, I think, Mr Gageler.

MR GAGELER:   Thank you, your Honour.

HIS HONOUR:  

5.The defendant and any interveners supporting the defendant file written submissions on or before 20 July 2007.  The defendant have leave to file written submissions up to 30 pages in length.

6.The plaintiff file written submissions in reply on or before 3 August 2007.  The plaintiff have leave to file written submissions in reply of up 20 pages.

7.Costs of today be costs in the action.

I will not make any formal order as to listing or duration of the appeal but I have given those informal indications.  Is there anything else, gentlemen?  Yes, 11 June which appears in proposed order 3 should become the 12th.  The 11th is the Queen’s Birthday Holiday.

MR MEADOWS:   Not in Western Australia, your Honour.

GUMMOW J:   It is at headquarters.  I thank counsel for their assistance and I will now adjourn.

AT 12.32 PM THE MATTER WAS ADJOURNED