Lottoland (Australia) Pty Ltd v Minister for Racing, Gaming and Licensing

[2020] NTSC 65

CITATION:Lottoland (Australia) Pty Ltd v Minister for Racing, Gaming and Licensing & Anor [2020] NTSC 65

PARTIES:  LOTTOLAND (AUSTRALIA) PTY LTD

v

MINISTER FOR RACING, GAMING AND LICENSING

and

NORTHERN TERRITORY RACING COMMISSION

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION:  SUPREME COURT exercising Territory jurisdiction

FILE NO:  2020-03129-SC

DELIVERED ON:  1 October 2020

HEARING DATE:  23 September 2020

JUDGMENT OF:  Grant CJ

CATCHWORDS:

ADMINISTRATIVE LAW – Remedies – Interlocutory injunction

Application for interlocutory injunction to preclude variation to the conditions of the sports bookmaker licence issued to the plaintiff – Plaintiff established a serious question to be tried, or in the alternative a prima facie case – Balance of convenience favours the grant of an injunction to maintain the status quo until the determination of the application for judicial review – Injunction granted.

Racing and Betting Act 1983 (NT) s 4, s 19, s 90, s 92, s 109H

Castlemaine Tooheys v South Australia (1986) 161 CLR 148, Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, referred to.

REPRESENTATION:

Counsel:

Plaintiff:  S Hartford Davis with D Reynolds
          Defendants:  C Jacobi

Solicitors:

Plaintiff:Addisons

Defendants:Solicitor for the Northern Territory

Judgment category classification:    B
Judgment ID Number:  GRA2010
Number of pages:  11

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Lottoland (Australia) Pty Ltd v Minister for Racing,

Gaming and Licensing & Anor [2020] NTSC 65

No. 2020-03129-SC

BETWEEN:

LOTTOLAND (AUSTRALIA) PTY LTD

Plaintiff

AND:

MINISTER FOR RACING, GAMING AND LICENSING

First Defendant

NORTHERN TERRITORY RACING COMMISSION

Second Defendant

CORAM:    GRANT CJ

REASONS FOR JUDGMENT

(Delivered 1 October 2020)

1. The plaintiff has brought proceedings against the Minister for Racing, Gaming and Licensing (the Minister) and the Northern Territory Racing Commission (the Commission) seeking relief to preclude the Commission from varying the conditions of the licence issued to the plaintiff on 18 June 2020 authorising it to conduct the business of a sports bookmaker under the Racing and Betting Act 1983 (NT) (the Act). 

2. On 23 September 2020, I made programming orders for the filing and service of affidavit material and submissions, and listed the matter for hearing before this Court on 26 November 2020.  At that same time, I heard argument in relation to an application by the plaintiff for an interlocutory injunction to preserve the status quo pending the hearing and determination of the substantive proceedings.

3. The factual matrix is largely uncontentious and may be summarised as follows.

4. On 22 December 2015, the plaintiff was issued a sports bookmaker licence pursuant to s 90 of the Act. That licence expired on 30 June 2020, but prior to its expiry the plaintiff was issued with a fresh licence on 18 June 2020 pursuant to the same provision. There is no material difference between the conditions of those licences for the purpose of these proceedings.

5. The Act defines a “sporting event” to mean an event or contingency, whether or not of a sporting nature, declared by the Racing Commission under s 4(2) to be a sporting event. At all material times, national and international stock market indices have been declared as a sporting event. The plaintiff’s betting product portfolio is constituted almost entirely by stock market indices. In general terms, customers win a bet when their chosen number matches designated parts of specified financial indices at a designated time. So, by way of example, the winning result for the product which is described as the “Monday Jackpot” is determined by a 10 digit compilation of the first two decimals of the opening value of five major financial indices as at 9:30 AM on each Monday morning. With some minor variations, the plaintiff’s other products are designed along similar lines.

6. On 11 November 2019, the Minister wrote to the Commission advising of concerns raised with her office regarding wagering products described as “jackpot betting” which gave the impression of a lottery but were not in fact a lottery. The Minister expressed the view that there should be stronger regulation around products which may cause confusion or otherwise mislead consumers into believing they were purchasing a lottery product when they were not. The letter then made express reference to the plaintiff, and expressed the belief that its operations had a negative effect on the business of newsagencies both in the Territory and nationally, presumably in their sales of lottery products. The letter then directed the Commission pursuant to s 19 of the Act to take any necessary steps to prohibit the offering or acceptance of a bet on a declared sporting event which is presented, marketed or displayed in such a way that a reasonable person might believe they were purchasing a ticket in a lottery (the direction).  The direction included that the change take effect on 1 January 2020.

7. On 20 December 2019, the Minister wrote once more to the Commission making reference to discussions between the Commission and the Department of the Attorney-General and Justice concerning advice by the Chairperson of the Commission on the best means of implementing the policy intent of the direction. Having considered that advice, the Minister amended the direction to direct the Commission specifically to vary the licences of sports bookmakers and betting exchange operators to impose two additional conditions. That direction recognised that the Commission would need to follow the statutory procedure for the variation of licences prescribed by ss 92 and 109H of the Act. The first of those provisions was of relevance to sports bookmakers and required the Commission to provide not less than 28 days’ notice before exercising its powers to vary a licence.

8. The first condition proposed was, in essence, that a sports bookmaker must not market its bet types in a manner that would lead a reasonable person to infer that the bet constituted or approximated a lottery.  The second condition proposed was, in essence, that a sports bookmaker must not offer or accept a bet based on a combination of contingencies where the selection of those contingencies does not allow the customer to make a specific evaluation or decision about them, or where that selection arises from the extraction, matching or adaptation of data generated by the relevant sporting event.

9. The Commission wrote to the plaintiff by letter dated 23 December 2019 providing notice of the intention to insert the two additional conditions into the licences of all sports bookmakers.  The plaintiff subsequently wrote to the Minister by letter dated 28 January 2020 advising that if the second condition was imposed on the licence it would mean the plaintiff’s jackpot betting products would have to be withdrawn immediately and result in the immediate loss of 95 percent of its revenue.  The letter further advised that the plaintiff had in 2019 sought and obtained a declaration from the Supreme Court of New South Wales that its jackpot betting products did not contravene the Interactive Gambling Act 2009 (Cth), and as a consequence were not lotteries or lottery betting products within the meaning of that legislation.  The letter concluded by requesting a meeting with the Minister to seek confirmation that the prohibition of its jackpot betting products was consistent with the policy intent of the Minister’s direction.

10. On 14 February 2020, the plaintiff made detailed written submissions to the Commission asserting that there were no substantiated reasons for the imposition of the conditions; that the conditions were directed solely at Lottoland and would destroy its business; that the process by which the proposed conditions were sought to be imposed was unlawful; and that there should be further and meaningful consultation over a reasonable period.

11. On 13 May 2020, the Commission wrote to the plaintiff advising of a proposed variation to the second proposed condition.  The proposed variation removed any reference to lotteries in the second condition, and would appear on its face to be in response to the plaintiff’s previous advice that the Supreme Court of New South Wales had effectively determined that the plaintiff’s betting products were not lotteries.  On 9 June 2020, the plaintiff wrote to the Commission reiterating its opposition to the imposition of the second condition, including as varied.

12. On 7 August 2020, the Commission wrote to the plaintiff advising that it intended to amend the licence by inserting the two new licence conditions as previously advised, and that the amended licence conditions would be effective from 31 October 2020 (the decision).  On 14 September 2020, the solicitors for the plaintiff served an Originating Motion commencing the proceedings against the Minister and the Commission described at the outset of these reasons.  In brief, the grounds for the application are that the proposed imposition of the conditions is ultra vires because:

    (a)s 92 of the Act may only be employed to impose additional conditions relating to a licensee’s “structure and assets”;

    (b)s 92 of the Act may not be employed to effectively destroy the rights created by the licence;

    (c)s 92 of the Act may not be employed to exclude a specified kind of bet;

    (d)the direction and the consequent decision were made for the improper purpose of promoting and preferring the business of newsagents to the detriment of sports bookmakers; and

    (e)the process breached the requirements of procedural fairness by not providing the plaintiff with an opportunity to be heard before the direction was made, by not considering the plaintiff’s submissions, and/or by not affording the plaintiff opportunity to comment on the advice provided by the Commission to the Minister in December 2019.

13. Against that background, the conventional test in Australia for determining whether an interlocutory injunction should be granted, as expressed in Castlemaine Tooheys v South Australia (1986) 161 CLR 148, is that the applicant must establish a serious issue to be tried as to the interest claimed and the balance of convenience must favour the grant of the injunction. The precise content of the first limb of that test is rendered less certain by the fact that in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, Gummow and Hayne JJ at [65]-[72] expressed the view that on proper analysis the Australian authorities require the plaintiff to make out a “prima facie case”. 

14. However, there is little practical difference between the formulations of a “prima facie case” and a “serious question to be tried”, and under either test it is unnecessary for the plaintiff to establish a probability of ultimate success.  Rather, the plaintiff must show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending trial of the substantive issues.  The strength of the likelihood required will depend on the nature of the rights the plaintiff asserts and the practical consequences likely to flow from a refusal to grant the injunction: see Australian Broadcasting Corporation v O’Neill at [66], [71].

15. The defendants do not assert that there is not a serious question to be tried, although they do not concede that the prima facie case is a strong one.  That submission accords with my assessment of the matter.  Rather, the defendants’ opposition to the grant of an injunction is predicated on two limbs.  First, it was suggested that the substantive proceedings could and should be heard and determined before the decision takes effect on 31 October 2020.  Second, it was asserted that there has been undue delay by the plaintiff in bringing the proceedings given that it first received notice of the proposed variations in December 2019.

16. As to the first matter, the business of the Court at the present time is such that the hearing of the substantive issues cannot be conducted until November 2020, after the decision is due to take effect. In any event, the preparation of the necessary affidavit material and submissions, and the subsequent hearing and determination of that matter, would not be accommodated comfortably and reasonably in the period of one month before the variation is to take effect. As to the second matter, the plaintiff commenced proceedings within five weeks of being notified that the variation to the licences were to take effect on 31 October 2020, and within the 60 day time limit for the commencement of proceedings for judicial review prescribed by order 56 of the Supreme Court Rules. 

17. Such delay as there was is not of the type which would militate against the exercise of the discretion to grant an interlocutory injunction as was described in Castlemaine Tooheys.  Although the plaintiff first had notice of the matter in December 2019, there ensued a course of consultation and submission during which the position ultimately to be adopted by the Commission remained uncertain.  The Commission did not advise of the proposed variation to the proposed second condition until 13 May 2020.  The plaintiff made further submissions in relation to that proposal on 9 June 2020.  The Commission did not advise its final position until 7 August 2020.  Up to that point in time the plaintiff was entitled to harbour the hope that its submissions would find favour with the regulatory authority.  Moreover, it was not open to the plaintiff to commence proceedings prior to 7 August 2020, and nor was it incumbent on the plaintiff to commence proceedings immediately upon receipt of that final notice.

18. That same chronology is also relevant to the assessment of the balance of convenience.  It is plain from the Minister’s correspondence that the concerns said to underlie the direction had been expressed some time before November 2019, and perhaps well before.  There is no material before the Court which would suggest that the public interest will suffer if the implementation of the additional conditions is deferred until the determination of the substantive proceedings.  In particular, there is no material on which the Court might conclude on even a provisional or preliminary basis that consumers are being misled by the plaintiff’s products, or that there has in fact been some deleterious financial effect on newsagencies as a result of the availability of those products.  The defendants themselves will suffer no detriment if they are enjoined from implementing those variations prior to the determination of the substantive proceedings, except perhaps the need to advise other licence holders that the variation is to be deferred.

19. Ranged against those matters, it would seem uncontentious that the plaintiff was granted and operated the licence on a certain business model and has conducted its business accordingly for almost five years.  The conditions as varied would preclude the plaintiff from continuing to offer the products which comprise, if not the entirety of its business operations, then the very greater part of them.  Although the defendants contend that the plaintiff could restructure and re-style itself as an orthodox sports bookmaker, to do so would almost certainly require substantial changes to its software and business strategies.  In practical terms, its current business would be prohibited even if in the technical sense it would retain the bare right to conduct business as a sports bookmaker in a manner permitted by the licence as varied.

20. It would also seem uncontentious that if the variations to the licence were to take effect from 31 October 2020 the plaintiff would be obliged to withdraw its jackpot betting products immediately, with the resultant loss of the bulk of its revenue until the determination of the substantive issues.  Even if the plaintiff is successful in the proceedings, it might be expected to suffer a loss of goodwill and a diminution in its customer base by reason of the interruption of its business in the interim period, for which there would be no recourse in damages on account of administrative invalidity.

21. For these reasons, the balance of convenience favours the grant of an injunction.  I grant an interlocutory injunction in the terms of paragraph 1 of the Summons on Originating Motion filed in these proceedings on 14 September 2020.  The defendants do not require the usual undertaking as to damages given the nature of the proceedings and the limited consequences of the grant of the injunction. 

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