CANBERRA & DISTRICT BOCCE CLUB INC. AND ACT GAMBLING & RACING COMMISSION
[2007] ACTAAT 19
•29 August 2007
AUSTRALIAN CAPITAL TERRITORY
ADMINISTRATIVE APPEALS TRIBUNAL
CITATION:CANBERRA & DISTRICT BOCCE CLUB INC. AND ACT GAMBLING & RACING COMMISSION [2007] ACTAAT 19 (29 AUGUST 2007)
AT07/06
Catchwords: Gaming machine licence – review of decision to cancel licence issued to a club – failure of club to operate for period longer than period approved by the respondent – club ceasing to be an eligible club – criteria relevant to deciding what disciplinary action to be taken.
Administrative Appeals Tribunal Act 1989, s 37
Gaming Machine Act 2004, ss 35, 55, 57, 58, 59, 62, 173, Sch 1, item 8
Tribunal:Mr M H Peedom, President
Date:29 August 2007
AUSTRALIAN CAPITAL TERRITORY )
ADMINISTRATIVE APPEALS TRIBUNAL ) AT07/06
GENERAL DIVISION )
RE: CANBERRA &
DISTRICT BOCCE
CLUB INC.
Applicant
AND: ACT GAMBLING
& RACING
COMMISSION
Respondent
DECISION
Tribunal : Mr M H Peedom, President
Date : 29 August 2007
Decision :
The decision under review is set aside and substituted by a decision that the club be reprimanded.
………………………..
President
AUSTRALIAN CAPITAL TERRITORY )
ADMINISTRATIVE APPEALS TRIBUNAL ) AT07/06
GENERAL DIVISION )
RE: CANBERRA &
DISTRICT BOCCE
CLUB INC.
Applicant
AND: ACT GAMBLING
& RACING
COMMISSION
Respondent
REASONS FOR DECISION
29 August 2007 Mr M H Peedom, President
The decision under review
This is an application to review a decision made by the respondent, the Gambling and Racing Commission, on 20 February 2007. The decision, made pursuant to section 62(3) of the Gaming Machine Act 2004 (“the Act”), was to take disciplinary action against the applicant, the Canberra and District Bocce Club Inc. (“the club”). The disciplinary action was to cancel the gaming machine licence that had been granted to the club under the Act. The decision is made reviewable by section 173(1) and item 8 of Schedule 1 of the Act.
Background
2. The club has operated as a licensed club under the Act for about 20 years. Its licence authorises it to acquire, install, operate and dispose of six Class C gaming machines at its former club premises at Kaleen in the Australian Capital Territory.
3. The respondent was advised in October 2004 by the club that it was planning to relocate its premises from its Kaleen site. On 1 November 2004 Ms Kelley Reay was authorised by the club to represent it in discussions with the respondent. By letter dated 8 November 2004 the respondent provided advice as to the legislative requirements that the club would need to address in order to relocate the club. On 18 January 2005 the club president, Mr Spagnolo, was reminded of those requirements in a meeting with Mr David Spencer, an officer of the respondent.
4. On 4 May 2005, in response to a request from Ms Reay, Mr Spencer forwarded to her an extract of the letter dated 8 November 2004 which set out the statutory requirements for relocation of the club.
5. By email dated 8 August 2005 Ms Reay advised the respondent as follows:
We are currently working with Tony Spagnolo in putting together the Bocce Club’s transfer of gaming licence for their new premises ………
(7)We are also in the process of compiling a social impact assessment as required under the Act – we can only submit this once the ballot is conducted?
6.On 12 August 2005 Mr Spencer responded to Ms Reay indicating, inter alia:
7.A formal application to relocate the premises must be lodged with the Commission. In addition to other legislative requirements, the application must include the result of the ballot and the Social Impact Assessment (SIA). Please note that the Ballot must be conducted over a three week period. Then upon lodgement of the application showing the Ballot result, there is a period of six weeks in which the public can lodge objections to the move. Subject to a majority YES vote by members and no objections from the public regarding the SIA, the application will then be formally considered.
7. The respondent received an application dated 26 September 2005 from Mr Marek Bilski, acting on behalf of the club, to temporarily store its gaming machines from the end of September 2005 for a period of six months pending the relocation to the new premises. An earlier version of this application canvassed the option of a 6 month extension “if delays are experienced” however this request did not appear in the revised letter.
8. By letter dated 20 October 2005 the respondent advised the club that approval had been granted for the temporary storage of machines for the requested period of 6 months. The club was also advised (with reference to section 57(1)(f)(ii) of the Act) that the temporary closure of the club premises for a period longer than 3 months would need to be the subject of a separate application to the respondent. It was suggested that this application be made closer to the end of the 3 month period so that the club would have a better idea of the closure period required when seeking an extension. The club was also reminded about the other legislative obligations consequent to a relocation, including the need to conduct a social impact assessment (“SIA”).
9. By letter dated 27 October 2005 Mr Bilski confirmed to the respondent that the club’s gaming machines had been placed into storage on 21 October 2005.
10. On 2 February 2006 Mr Spencer faxed to Mr Bilski a letter enclosing the letter of 20 October 2005 and noting that the club premises had been closed for three months but that no formal request for permission to extend this period had been made. The letter continued:
Would you please as a matter of urgency provide the Commission with a written request to continue the closure and indicate as accurately as possible the anticipated opening date of the new premises. This request must be submitted to the Commission by close of business on Friday 10 February 2006.
11. By letter dated 2 February 2006 Mr Bilski made a request that the respondent extend the period of storage of the club’s gaming machines until 30 June 2006. The letter advised that construction work on the new building site had commenced but that delays occurred due to Christmas and unforeseen circumstances. The respondent accepted this application to extend the storage time of the machines to also be an application to extend the closure period of the club facilities beyond the initial three month period which had now expired.
12. By letter dated 28 February 2006 the club was advised of the approval to extend the closure period until 30 June 2006. The club was also advised that:
Given that members will have been without any club facilities for nine months at the expiration of the 30 June period, the Commission must emphasise the importance of the Club doing everything possible to ensure the closure does not extend beyond this date. Will you please keep the Commission informed of the progress of the new club premises ………
13. On 5 July 2006 the respondent wrote to Mr Bilski expressing concern that there had been no written or verbal advice from the club about progress of the new club premises. The letter stated:
The Commission is extremely concerned that the Club allowed the deadline of 30 June to pass without any attempt to consult with the Commission.
Accordingly the Commission requires an immediate written explanation from the Club as to why it failed to comply with the Commission’s specific instructions outlined in its 28 February 2006 correspondence. In addition, the Commission requires full details of the current progress of the new building and an accurate time-frame in which the new premises are expected to be completed and the Club re-open for business.
The respondent again reminded the club of the requirement to progress its SIA as required by the Act.
14. By letter dated 11 July 2006 Mr Bilski advised the respondent that the construction of the new premises would not be completed until November or December 2006. Mr Bilski also advised that he would provide the respondent with updates of progress every two months “so the current situation is not repeated, and any further delays identified immediately”. Mr Bilski also advised that “with regard to the SIA, the Board is aware of the timeframe needed to complete this and will allocate funds to complete this shortly”.
15. By letter dated 27 July 2006 the respondent indicated to the club:
The advice that the Club will now remain closed for a further period of at least six months is a most disturbing change of circumstances. Accordingly, I must warn you that the Club’s eligibility to hold a gaming licence is under close scrutiny. In this regard, the Commission has considered the request for a further extension of the Club’s shut-down and has agreed to an extension of the closure until 31 December 2006. If the Club is not in a position to commence trading early in 2007, the Commission may consider taking action to cancel the gaming machine licence.
With regard to the Social Impact Assessment (SIA) this document must be checked by the Commission for statutory compliance before it is released for public comment. The period for public comment is six (6) weeks and therefore it is imperative that the SIA be completed sooner rather than later to avoid any further delay in the opening of the Club.
16. On 11 December 2006 the respondent advised the club’s solicitor, Mr F Giles, that the club was expected to commence trading in its new premises in early 2007 and that nothing had been heard regarding the progress of the building or of the SIA.
17. On 15 December 2006 the respondent provided Mr Giles with a copy of the letter to the club dated 27 July 2006.
18. On 15 December 2006 Mr Giles advised the respondent that the 31 December 2006 deadline for opening the new premises would not be met and that a further extension of another 6 months was requested. Mr Giles advised that the club was hopeful of the premises being opened in April 2007 however an extension to 30 June 2007 was being sought. Mr Giles also advised that Mr Bilski would be attending to the SIA.
19. By letter dated 8 January 2007 the respondent advised the club that its request for a further extension of closure for another 6 months had not been accepted and that the respondent was considering taking disciplinary action against the licensee by way of cancellation of their gaming machine licence. The club was advised that the grounds for the disciplinary action were:
(i)under section 57(1)(f)(ii) of the Act in that the club had not operated for three months or a longer period approved by the Commission; and
(ii)under section 57(1)(f)(iii) of the Act as the club had ceased to be an eligible club as it no longer provided premises or facilities for the benefit of the members of the club.
The letter indicated that the club had three weeks in which to provide a submission in relation to the proposed disciplinary action.
20. On 1 February 2007 Mr Giles advised of the construction delays experienced with the new premises and that the club estimated that it would be able to commence trading in its new premises in mid to late May 2007. He also advised that Mr Bilski would be submitting the club’s SIA on 12 February 2007.
21. On 11 February 2007 the respondent received an application from Mr Bilski on behalf of the club to transfer gaming machines to its new premises. The application included a proposed SIA.
22. The respondent resolved to cancel the club’s gaming machine licence, effective from 26 March 2007, and advised the club on 23 February 2007 of its decision. It gave as the grounds for its decision the grounds specified in the letter to the club dated 8 January 2007.
The hearing
23. At the hearing of the appeal the club was represented by Mr C Erskine, of counsel. The respondent was represented by Mr S Whybrow, of counsel. The Tribunal had before it the documents lodged by the respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1989 (“the T documents”) and documents tendered in evidence on behalf of the parties. Evidence was given on behalf of the club by Mr A Spagnolo, Mr J Morgan and Mr M Bilski. Written statements of Mr Giles and Mr G Gambacota were admitted in evidence on behalf of the club. Evidence was given on behalf of the respondent by Mr G Jones.
The club’s evidence
24. Mr Spagnolo is the president of the club. In a written statement tendered in evidence he said that the club was a small volunteer-run club. It had been formed in 1985 for the primary purpose of promoting and fostering the sport of bocce in the ACT and district. In the earlier years of its operations, the club’s membership numbered 2,500 and was very active in both sport and social events. A separate club called The Canberra and District Petanque Club (“Petanque Club”) was formed for the primary purpose of promoting and fostering the sport of petanque in the ACT and district. The Petanque Club had acquired a lease of land in Kaleen in 1984 and built a small clubhouse with a bocce and petanque arena in about 1987. The club had been its tenant. The club had held liquor and gaming licences and ran commercial and sporting activities. In about 1990 the club sold off half of the Kaleen property to clear its debt.
25. Mr Spagnolo said that by about 1990 the level of bocce and petanque participation amongst members and invited guests had tapered due to a reduction in its original predominantly ethnic membership and with the growth of younger generations requiring more diverse and up-market social facilities as well as the opening of competing clubs in the Kaleen area. Bocce arenas in Queanbeyan and Forrest had closed and the club was the only one that would provide combined arenas and clubhouse facilities in the ACT. To address the problem of declining patronage the club sold its Kaleen site and secured a block in the commercial area of the Belconnen Town Centre.
26. When the club ceased operations in Kaleen in September 2005 its membership had fallen to 306 but it was confident that, with the acquisition of new premises and the appointment of Mr M Bilski, a management consultant, to market and manage the club’s activities, its membership should reach 2,000 within the first two years.
27. Mr Spagnolo said that the construction of the new premises was well advanced and nearly at lock-up stage. He produced a collection of photographs depicting the building work on the new premises which had been taken on 31 May 2007.
28. The new premises were to include bocce and petanque arenas, a gaming room, a suite of five commercial offices to be rented out and full member social facilities. He also produced a construction program setting out the timing of the remaining stages of construction to completion. He said that the club expected to open in September 2007 if there continued to be delays in the supply of labour and materials of the kind that had been experienced over the past six months. However, if construction trades were more available they would open earlier.
29. Mr Spagnolo acknowledged that in the past the club had breached various gaming statutory requirements but said they had not been acts of conscious wilfulness and had arisen because of his ignorance or misunderstanding of the precise statutory requirements and having his focus on the practicalities of physically transferring the club from its old premises and on seeking to save the club money by minimising its expenditure on consultants. He acknowledged that there had been failures to prepare an SIA for the club’s relocation to Belconnen in a timely way; to formally request an extension of the respondent’s permission for closure of the club in Kaleen; to make a timely request to the respondent for a further extension of time for the club to remain closed; to address the requirements for preparing the SIA and to instruct the club’s consultant to prepare two monthly progress reports to the respondent. He realised now that he needed the ongoing services of a consultant to assist him to ensure compliance with statutory requirements, to be fulsome and accurate in the club’s predictions for a completion date of its new premises and to complete an SIA well in advance of the club’s move to Belconnen.
30. Mr Spagnolo expressed his remorse for the waste of resources that he had caused by allowing the club to get into a mess with the respondent which had culminated in the proceedings before the Tribunal. He recognised that he did not have the capacity or requisite skills to ensure the club’s due compliance with the various legislative and management requirements which are imposed on modern-day clubs and considered that Mr Bilski’s appointment would address these problems. In relation to the club’s delays in achieving relocation of its premises, he said that the initial application for relocation had been based on construction programs presented by two building contractors which transpired to be too expensive for the club to accept. The club had been forced to rely to a large extent on volunteer labour. The club had initially intended to continue trading at the Kaleen property while it pursued construction of the new premises but the continuing decline in its activities at Kaleen made that not a viable alternative.
31. In about December 2005 the club had encountered difficulties with the steel fabricator and erector engaged in the construction of the new premises. This had resulted in a legal dispute and termination of the contract. It had taken about 8 months to engage a replacement steel fabricator and erector but the contractor engaged could not start work on the site until late August 2006 due to work pressures resulting from the ongoing construction boom in Canberra. The work was now proceeding well. The construction boom had not only caused delays but dramatically increased the costs of construction and it had become apparent in mid-2005 that the club’s original estimate of $600,000 for the cost of construction was going to exceed its original budget. Applications to banks for loans had been made but rejected in September 2005, November 2005, January 2006 and April 2006. In September 2006 a loan was negotiated with a mortgage broker but in February 2007 the mortgage broker advised that it was unable to provide the club with the requisite loan. A loan was eventually arranged in April 2007 but the delays encountered had exacerbated problems caused by earlier delays with respect to the progress and cost of construction of the new premises. Now that funds had been obtained, the work was proceeding as fast as the availability of trades and materials could be arranged.
32. Mr Bilski had submitted an SIA to the respondent on 12 February 2007. On 18 April 2007 the club’s solicitor, Mr Giles, had spoken to Mr Spencer and asked him for advice as to what aspects of the SIA did not comply with legislative requirements. Mr Spencer had responded by saying that as the club was no longer eligible the respondent would not provide the advice requested. Mr Giles had challenged this approach in dealing with the club’s SIA. The club had noted a number of comments that had been written by an officer of the respondent on the SIA and instructed Mr Bilski to address them. If agreement could be reached as to the amendments necessary to be made to the SIA the club could make the necessary amendments and advertise it and release it for public comment.
33. In cross examination Mr Spagnolo agreed that the club required more money to complete the building project for the new building in which the club premises were to be located. He said that Mr Bilski had been engaged to assist the club some time ago but that he had only worked for it on a part-time basis as and when required. He disagreed that the club had given misleading advice to the respondent as to when the new club premises might be able to open and said that it had always done its best. He said that the club hoped to open its club facilities and gaming area in September 2007. The continuing work on the bocce arena and offices could then continue and without interruption to the club operations. He said that the arena now required the roof to be installed and for asphalt and sand to be laid on the floor surface. He hoped that this work would be completed by December 2007.
34. Mr Giles is a legal practitioner who acted on behalf of the club in its dealings with the respondent. He said in his statement that he had spoken with Mr Spencer on 18 April 2007 and asked him for guidance in relation to the SIA that had been submitted to the respondent by the club. Mr Spencer had told him that he would not give the advice because the club was no longer eligible under the Act. When asked if he could indicate any matter that might need to be addressed, Mr Spencer said that the document was a bit light on with its material and it needed more fleshing out as per the regulations. He had made a similar complaint to the Government Solicitor’s Office, which represented the respondent in the proceedings before the Tribunal, on 17 May 2007 about the respondent’s negative attitude to reviewing the club’s SIA. The Government Solicitor had responded by saying that the respondent was unable to consider it because the club was not currently licensed.
35. Mr G Gambacota is the secretary and vice-president of the club. He said that in 2005 the club had conducted a ballot of members which had given approval for the club to relocate its premises to a site in Belconnen. He said that the amount of work involved in setting up and running a modern club was very demanding, particularly when there was such much government compliance at all levels that had to be attended to. The club’s directors had supported Mr Spagnolo in retaining an experienced consultant to manage and assist the running of the club’s affairs. They considered that with the ongoing assistance of Mr Bilski the club would always be in compliance with its legislative obligations. He expected the club to shortly enter into a contract with Mr Bilski to that end.
36. Mr Morgan is a chartered professional engineer and is registered as a building certifier in the ACT and New South Wales. In a written report admitted in evidence Mr Morgan said that, on or about 20 May 2005, a development application for the design and siting of the club’s new premises at Belconnen was approved by the planning authority. On or about 23 June 2005 a building approval was given and a building surveyor appointed by the club. An amendment to the development application was approved on 5 April 2006.
37. Mr Morgan said that the building in which the new club premises were to be located was a two storey building. The ground floor accommodated the club facilities including a gaming area and the first floor contained offices and a care-taker’s unit that would not be associated with the club’s activities. The project also included site works such as a roadway, carparking and landscaping and a bocce stadium consisting of a roofed court arena. The use of the club’s facilities on the ground floor of the building would not be dependent upon the completion of these works.
38. Mr Morgan had undertaken site inspections of the new building on 1 May 2007 and 30 July 2007. He produced in evidence a number of photographs that had been taken by him of the building. He had prepared a Gantt chart showing the time required to complete critical activities associated with the completion of the club premises. The Gantt charge showed completion within a period of 10 weeks.
39. At the inspection on 30 July 2007 Mr Morgan had determined that a small amount of roof-capping work was required to be completed and the storm water system had been substantially completed except for the installation of downpipes and tanks. The roof-capping would take about two days to complete. He had been advised by the building surveyor that a partial certificate of occupancy and use for the ground floor club area could be forwarded to the relevant authority to enable use of the club gaming area as soon as these activities had been completed. A lift was required to be installed to obtain access to the upper floor level but was unnecessary to enable the club gaming area to be used and occupied. The structural engineer had provided a certificate certifying the structural sufficiency of the building components for the building and bocce arena steel works. At the site inspection on 30 July 2007 he had observed normal building activity and saw no evidence of deterioration of the partly constructed building that required rectification work. He considered that the bocce arena did not need to be completed to enable the club gaming area to be used and occupied.
40. At the hearing of the appeal Mr Morgan said that he had made a further inspection of the club’s new premises on 6 August 2007. He found that the fascia work was 80% complete and about one day’s work was required to complete other work on the roof which had been scheduled to be undertaken on the day of the hearing. Refrigeration and other equipment had been delivered to the premises for installation. Some work was required to be done on the upper floor where the offices were located but this would not prevent the use of the club’s premises on the ground floor. The bocce arena required roof sheeting, capping, fascia and guttering to be installed but that work was not elaborate. There was no internal sheeting for the roof. Asphalt and sand were required to be installed on the floor of the arena. At the time of his inspection a plumber was on site and according to his observations, building activity had been undertaken during the previous week.
41. Mr Morgan had seen a report prepared by a building consultant at the request of the respondent. The report had concluded that the club’s new premises could not be completed by the end of 2007. He said that the report lacked detail and failed to distinguish those parts of the building necessary for the club’s activities as distinct from those that were not.
42. In cross-examination Mr Morgan said that not all of the work that had been scheduled by his Gantt chart for its first week had been completed but that there was not much of that work outstanding. He considered that the downstairs area of the building would be able to be occupied by the end of September 2007. A lift to provide access to the first floor was unnecessary to enable club activities to be conducted. It would take about two weeks to install and might involve some screening off of the area immediately outside the lift on the ground floor but would not disrupt club activities. Any work required to be undertaken upstairs could occur out of sight of the club and without disruption to it. It was possible that work to be completed on the outside of the building could be delayed by unfavourable weather conditions. It would be necessary for the club to arrange for the transfer of its liquor licence but in his experience this could be achieved quickly. He agreed that there had been delays in undertaking the construction of the club’s new premises but, based on his observations of progress, he considered that it was likely that the club’s premises would be completed by the end of September 2007.
43. Mr Bilski is the managing director of Josi Australia Pty Ltd, which trades as ‘Contract Club Management’. In a written statement tendered in evidence on behalf of the club Mr Bilski said that he had had 12 years’ experience in the licensed club industry as a club general manager and involved in gaming services compliance, promotion and management. He expected to shortly sign a consultancy agreement with the club to regularise the provision of his services to it. Once the agreement was signed he expected to be actively involved in overseeing and programming the finalisation of the fit-out of the club’s new premises in conjunction with Mr Spagnolo and completion of the SIA.
44. Mr Bilski said that he had first been retained on a casual basis in about September 2005. The restricted retainer on which he operated was largely driven by the club’s and Mr Spagnolo’s heritage of operating what was a small ethnic-based sports club, staffed largely by committed volunteer labour and having a relatively small commercial turn-over. The responses which he had made to correspondence which he had received from the respondent and the timeliness of them was limited due to the absence of proper instructions from the club.
45. Based on his experience Mr Bilski considered that within the period of two years from the commencement of trading, the club would be able to grow its membership to a number in the order of 2,000. The experience on which he had based his opinion included his management of the Canberra Services Club for the past two and half years during which period its membership had increased from 3,500 to 5,800 over a period of three years. He believed the club was well situated in its new location and would market to a growing patronage that would come from the increasing number of residential apartments being built in the immediate vicinity along with a growing number of businesses both opening and expanding their operations in the Belconnen area. He believed that after three years of trading the club should show a turn-over of $751,894.
46. Mr Bilski had delivered the club’s SIA to the respondent on 12 February 2007. He had asked Mr Spencer when he could expect to get his comments on it and had been informed that it would not be reviewed until the Board decided whether or not the club had a licence. On 15 May 2007 Mr Spencer had advised him that the SIA was not being considered because of the appeal to the Tribunal.
47. In cross-examination Mr Bilski agreed that when he wrote to the respondent in September 2005 requesting temporary storage of the club’s machines for six months he had been aware that there had been problems associated with the building work that may lead to delay. He said that the information which he had given to the respondent was provided on the basis of information given to him by the club.
48. He said that when he had received the letter dated 5 July 2006 from the respondent he had brought it to the club’s attention. He would have advised the club to give a full explanation of the situation regarding the delays with the construction work and that his letter to the respondent dated 11 July 2006 was based upon the information that the club had provided to him in response to this advice. He agreed that he had not given advice on a two-monthly basis as he stated he would in his letter dated 11 July 2006 but he had phoned Mr Spencer on a regular basis. He had not been aware that the club had not obtained approval to the loan which it had sought but he knew that it was in difficulty and involved in court proceedings. He had not provided additional information to the respondent because he had not been contacted by the club. He accepted that he should have done so in writing. He knew that there was a six week consultation process associated with an SIA and he had advised the club of this. He agreed that the process of transferring a licence was likely to take about 2-3 months. He said that the club had been unable to obtain a loan and, as a result, had not been in a financial position to pay him for his services. He had advanced the SIA to a point where it was about three-quarters completed in late 2005 but the club had encountered financial difficulties and had asked him to put the project on hold. After he received the SIA with some handwritten comments from the respondent in relation to it, he made some changes to the SIA that took account of those comments.
The respondent’s evidence
49. Mr Jones is the chief executive officer of the respondent. In a written statement admitted in evidence, he said that Class C gaming machines were the most popular gaming machines in the ACT and therefore the most lucrative. They were only available to clubs. Clubs paid a lower gaming machine tax rate than hotels and taverns. The maximum number of machines permitted in the ACT under the Act was 5,200 and this number was reached in December 2006. Holders of licences that permitted the use of Class C gaming machines had a number of responsibilities which included a requirement that 7% of net gaming machine revenue must be provided in eligible community contributions; the premises occupied by the club and the facilities and property of the club must be kept and maintained for the benefit of members generally; clubs must have eligible objects; they must be operated for the benefit of all members and not for individual profit or gain; only club members and signed-in guests could play gaming machines in the club and other requirements as outlined in section 55 of the Act.
50. Mr Jones said that in considering a request by a club that it not operate for a period of time the respondent considered that there should be a good reason for it not to do so because of the requirement of licensees to provide facilities for the members generally.
51. The club had been granted a gaming machine licence in the late 1980s to operate six gaming machines. In 2003-04 and 2004-05 the club had earned an average total gross profit of $404 and $270 respectively from each of their gaming machines. This compared with the ACT average gross profit per gaming machine in 2003-04 of $37,954 and in 2004-05 of $36,508. The profit was higher when averaged across Belconnen clubs only.
52. Mr Jones said that the respondent had decided to cancel the club’s licence because of:
the seriousness of the club’s failure to reopen its premises in accordance with extensions of time that were granted;
the seriousness of the club’s failure to provide its members with premises, facilities and property for their benefit;
the club had been closed for 14 months and was unlikely to reopen in the near future;
the unlikelihood of the club meeting the statutory eligibility criteria in the near future;
the need to comply with the provisions of the Gaming Machine Act 2004 in order to meet their members’ requirements and to justify the privileged position that clubs have in operating Class C gaming machines;
the failure to keep the Commission informed of the issues that were being experienced with the construction delays; and
failure to seriously progress the development and undertaking of the mandatory SIA so as to avoid further delays in reopening.
53. On 22 March 2007 Mr Jones had agreed to the club’s request not to re-allocate any of the club’s gaming machines following cancellation of the licence and pending determination of the proceedings before the Tribunal. If he had not done so, the club’s machines would have been re-allocated to another gaming machine licensee and the club would have need to wait until more gaming machines became available through either the Minister agreeing to an increase in the maximum number of machines in the Territory or another licensee surrendering machines.
54. The respondent had monitored progress on the construction of the new club premises and had engaged an expert builder, Mr P Enders, to provide advice on the likely completion date of the new premises. The builder had advised that the premises were unlikely to be ready for occupation until the end of 2007 at the earliest and may not be completed until well into 2008.
55. Mr Jones said that if the decision of the respondent to cancel the club’s licence was affirmed, the six gaming machines in respect of which the licence was held by it would become available for allocation to other clubs wishing to secure a licence for additional gaming machines. In determining whether to issue a gaming machine licence the respondent would ordinarily take into account, inter alia, the club membership and its potential for growth. It was accepted that the grant of a gaming machine licence may be a catalyst for growth. If the respondent’s decision was reversed it would necessary for the respondent to consider whether the club now met the eligibility criteria and whether its application for transfer of the licence to the new premises should be approved. Consideration of that proposal had not progressed due to the respondent’s decision to cancel the existing licence. It would be necessary for that purpose for an SIA to be prepared and approved by the respondent to ensure that it complied with the requirements of the Act and Regulations. The respondent would also have to consider any responses to the SIA.
56. In cross-examination Mr Jones agreed that the respondent had, on a number of occasions, granted temporary licences to clubs to permit them to store their gaming machines whilst renovations were undertaken to their club premises. Approval had been given to the storage of 70 gaming machines licensed to the Canberra Workmen’s Club when it was taken over by the Labor Club. The machines had been approved for storage for more than three years during which time its facilities had not been available to its members. The Dickson Tradesmen’s Club had 60 gaming machines in storage for a period of about two years in 2005 and 2006 due to progressive renovations being undertaken and machines being moved off-site at various times. During that period part of the club’s facilities had not been available to members. Thirty gaming machines licensed to the Benjamin Club had been in storage for a period of at least 14 months. That club had been under administration for a number of years and the administrator had been advised that, unless the position was resolved, the club’s licence would be cancelled. His understanding was that the Benjamin Club did not presently have financial members and was therefore an ineligible club.
57. Mr Jones accepted Mr Morgan’s evidence that the finishing of the club’s premises was not far off. He said that if the decision to cancel the club’s licence was affirmed, it would have to apply for a new licence to operate any gaming machines. It would, however, take some months for the application to be processed and there may not be then any gaming machines available for allocation to it.
Relevant legislation
58. The grounds for taking disciplinary action against a licensee under section 57(1) of the Act include:
(f) for a licence issued to a club―
……….
(ii)the club has not operated for 3 months or, if the commission approves a longer period, that longer period; or
(iii)the club has ceased to be an eligible club;
Section 146 relevantly to these proceedings provides:
146 Eligible clubs
A club is an eligible club if―
…………..
(g)the premises occupied by the club, and the facilities and property of the club, are kept and maintained for the benefit of members generally.
59. The disciplinary action which may be taken under the Act is set out in section 58 of the Act. It provides:
58Disciplinary action
(1)Each of the following is a disciplinary action when taken against a person:
(a)reprimanding the person;
(b)imposing conditions on, or amending the conditions of, the person’s licence;
(c)ordering the person to pay to the Territory a financial penalty of not more than $100 000;
(d)suspending the person’s licence for a stated period or until a stated thing happens;
(e)cancelling the person’s licence.
(2)A reprimand may include a direction by the commission that the licensee, within a stated time―
(a)cease contravening this Act; or
(b)rectify something that contributes to the ground for disciplinary action.
(3)A financial penalty imposed under this section may be recovered as a debt payable to the Territory.
60. Section 59 specifies the criteria that must be considered in deciding what disciplinary action should be taken. Section 59 provides:
59 Criteria for disciplinary action
(1)In deciding what disciplinary action to take under section 58, the commission must consider the following:
(a)whether disciplinary action has been taken against the licensee before;
(b)whether the disciplinary ground on which the disciplinary action is to be taken endangered the public or the public interest;
(c)the seriousness of the disciplinary ground;
(d)the likelihood of further disciplinary action needing to be taken.
(2)The Commission may also consider any other relevant matter.
Section 62 provides:
62 Commission may take disciplinary action against licensee
(1)This section applies if the commission is satisfied that a licensee has contravened a direction in a reprimand.
(2)This section also applies if―
(a)a licensee has been given a disciplinary notice; and
(b)after considering any responses given within the 3-week period in relation to the notice under section 61, the commission is satisfied that a ground for disciplinary action exists in relation to a licensee.
(3)The commission may take disciplinary action against the licensee.
(4)To remove any doubt, the disciplinary action may consist of 2 or more of the actions mentioned in section 58.
(5)Disciplinary action takes effect when the licensee receives written notice of the action, or on a later stated date.
Reasons for decision
61. Mr Erkine submitted on behalf of the applicant that the disciplinary action taken by the respondent was excessive. In his submission, when the matter was assessed by reference to the considerations set out in section 59(1) of the Act and when regard was had, inter alia, to the club’s acknowledgement of the need to restore facilities to its members, the progress that had been made to near completion of the new club premises and the cost that the club had incurred in conducting the proceedings in the Tribunal, a less severe form of disciplinary action was appropriate.
62. Mr Whybrow submitted on behalf of the respondent that the failure of the club to operate for a period in excess of the period approved by the respondent and its failure to provide facilities for its members for a prolonged period was a serious matter and that, on the evidence, the period of continuation of those failures was a matter of uncertainty. He submitted that improvement in the management of the club in the completion of the building of the new premises and reporting of progress to the respondent would not necessarily occur as the result of Mr Bilski’s appointment as a consultant because he had been associated with the club since September 2005 without positive result. There was not, in his submission, sufficient change in the circumstances that had given rise to the decision under review to justify any change of that decision.
63. In considering the matters which the Tribunal is obliged by section 59 of the Act to take account of, I note that the club has not previously been the subject of disciplinary action under the Act nor was there evidence to suggest that the grounds for taking disciplinary action had involved any danger to the public.
64. The grant of a licence to a club under the Act confers a potential financial benefit upon the club and those sections of the community which receive contributions from it in accordance with Part 12 of the Act. To the extent to which section 35 of the Act imposes a limit upon the conferral of such benefits, there would appear to be a public interest in the gaming machines licensed for use by a club, in fact being used by it or, if not used, made available to another club with the capacity and willingness to do so. In this case, however, the public interest should also take account of the fact that there is only a small number of gaming machines licensed for use by the club as a proportion of the total number able to be licensed under the Act and that there is a potential for the club’s presently strained financial position and forecast improved prosperity to be adversely impacted upon by the loss of its licence.
65. The club acknowledged the seriousness of its failure to comply with its obligations under the Act and its associated failure to keep the respondent informed of its progress towards meeting them. I accept that the club did not act with deliberate disregard of its obligations and that its failure to discharge them was attributable, in part, to the lack of expertise of its internal management. It was also affected by the unavailability of resources in the construction industry which was beyond its control. The engagement of a specialist management consultant to manage the club’s affairs on a more business-like basis than has operated to date provides a basis for some confidence that there is not a likelihood of further disciplinary action needing to be taken.
66. In arriving at its decision, the Tribunal is required to have regard to the evidence before it and to the facts that are relevant to its decision at the date of the decision. The factual basis for its decision will not necessarily be the same as that on which the respondent based its decision. In this regard the evidence before the Tribunal shows that significant progress has been made in the building works since the date of the respondent’s decision. In particular, the evidence of Mr Morgan which was not available to the respondent in making its decision provides a more optimistic forecast of the length of time required for completion of the club’s facilities thereby restoring the capacity of the club to provide some of the usual facilities to members and enhance its financial capacity to complete the bocce arena. I am also satisfied on the evidence that the construction work necessary to complete that part of the building not required for the club’s activities will not interfere with those activities.
67. I take account also of the fact that, while the manner in which the respondent has dealt with applications by other clubs for approval to the storage of gaming machines for lengthy periods of times is not a matter that calls for comment by the Tribunal, an even-handed approach to dealing with such matters supports a conclusion that cancellation of the club’s licence would be a relatively disproportionate response to the grounds that have given for taking disciplinary action in this case.
68. I consider that the imposition of a financial penalty on the club or the future suspension of its licence could adversely impact upon its capacity to complete the costly building project which it has undertaken and therefore be counter-productive in achieving that objective. Neither party formulated any conditions that might appropriately be imposed on the club’s licence. I accept the submission made on behalf of the respondent that the prolonged failure of the club to comply with its statutory obligations does not warrant taking no disciplinary action against it.
69. In all the circumstances, I consider that the correct and preferable decision for the Tribunal to make is to reprimand the club, pursuant to section 58(1)(a) of the Act. Should any further disciplinary action against the club be called for and established the respondent would, in addition to other relevant considerations, be required to take account of the fact that disciplinary action had previously been taken against the club.
FORM 33
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Member's Staff
________________________________________________________________________
PART A FILE NO: AT07/06
APPLICANT: CANBERRA & DISTRICT BOCCE CLUB INC.
RESPONDENT: ACT GAMBLING & RACING COMMISSION
PARTY JOINED: N/A
COUNSEL APPEARING: APPLICANT: MR C ERSKINE
RESPONDENT: MR S WHYBROW
PARTY JOINED:
SOLICITORS: APPLICANT: S & T LAWYERS
RESPONDENT: ACT GOVERNMENT
SOLICITOR
PARTY JOINED:
OTHER:APPLICANT:
RESPONDENT:
PARTY JOINED:
TRIBUNAL MEMBER/S: MR M H PEEDOM, PRESIDENT
DATE/S OF HEARING: 7 & 8 AUGUST 2007 PLACE: CANBERRA
DATE OF DECISION: 29 AUGUST 2007 PLACE: CANBERRA
_______________________________________________________________________
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION (X)
COMMENT:
0
0
0