Office of Liquor Gaming and Racing v Tabcorp Holdings Limited

[2016] NSWLC 25

Local Court

New South Wales

Medium Neutral Citation:	Office of Liquor Gaming and Racing v Tabcorp Holdings Limited [2016] NSWLC 25
Hearing dates:	14,15 July 2016; 10 October 2016
Decision date:	16 December 2016
Jurisdiction:	Criminal
Before:	McIntyre LCM
Decision:	All offences proven
Catchwords:	CRIMINAL PROCEEDINGS – offences relating to publishing gambling related advertising - gambling activity – credit – reward – inducement STATUTORY INTERPRETATION – construction of Racing Administration Act and regulations – whether punitive or beneficial in nature
Legislation Cited:	Racing Administration Act 1998 Racing Administration Regulation 2012
Cases Cited:	R v Lavender (2005) 222 CLR 67 Roads and Traffic Authority of New South Wales v Baldock [2007] NSWCCA 35 Wallace v Walplan Pty Ltd (1985) 5 FCR 315 Waugh v Kippen (1986) 160 CLR 156
Category:	Principal judgment
Parties:	Office of Liquor Gaming and Racing (prosecution) Tabcorp Holdings Limited (defendant)
Representation:	Counsel: Mr Gray (for the prosecution) Mr Lancaster (for the defendant) Solicitors: Hunt and Hunt Solicitors (for the prosecution) Gadens Solicitors (for the defendant)
File Number(s):	2015/340513, 2015/340520, 2015/340529

Judgment

1. The Office of Liquor Gaming and Racing (OLGR) brings prosecutions against Tabcorp Holdings Limited (Tabcorp) for the offences of publishing gambling related advertising that offers a credit voucher or reward as an inducement to participate, or to participate frequently in any gambling activities, including as an inducement to open a betting account, in contravention of subclause 12(1)(h) of the Racing Administration Regulation 2012 (NSW) (as it was then known) in force as at 27 and 28 August 2015. It is convenient to provide herein the entirety of the relevant clause.

12 Prohibitions on gambling-related advertising

(1) A non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not publish any gambling advertising:

(a) that encourages a breach of the law, or

(b) that depicts children gambling, or

(c) that is false, misleading or deceptive, or

(d) that suggests that winning will be a definite outcome of participating in gambling activities, or

(e) that suggests that participation in gambling activities is likely to improve a person’s financial prospects, or

(f) that promotes the consumption of alcohol while engaging in gambling activities, or

(g) that is not published in accordance with decency, dignity and good taste and (in the case of a television commercial) in accordance with the Commercial Television Industry Code of Practice, registered by the Australian Communications and Media Authority, as in force at the time the gambling advertising is published, or

(h) that offers any credit, voucher or reward as an inducement to participate, or to participate frequently, in any gambling activity (including as an inducement to open a betting account).

Maximum penalty: 50 penalty units.

(2) A non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not publish any gambling advertising in writing in a newspaper, magazine, poster or other printed form that does not contain the following:

Think! About your choices

Call Gambling Help

1800 858 858

penalty: 50 penalty units.

(3) A person other than a non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not publish any advertising that does any of the things referred to in sub clause (1) (a)–(h).

Maximum penalty: 50 penalty units.

(4) Sub clause (3) does not apply if the advertising relates to a non-proprietary association or licensed wagering operator and the publication of the advertising was approved in writing by the non-proprietary association or licensed wagering operator or an employee or agent of the non-proprietary association or licensed wagering operator.

(5) A non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not enter into or extend the duration of any contract or arrangement for the publication of gambling advertising that does not comply with this clause.

Maximum penalty: 50 penalty units.

2. The prosecution is brought pursuant to section 35 of the Racing Administration Act 1998 (NSW) (as it was then known) as in force as at 27 and 28 August 2015. It is uncontested that the alleged breaches are invoked via subclause 12(3), on the basis that Tabcorp the defendant is not a non–proprietary association or licensed wagering operator as defined in the Act.

Construction of the Legislation

3. The matters before the court carry monetary penalties of up to $5,500 upon conviction. Before embarking upon any factual determinations the court is urged to interpret or classify the nature of the legislation itself. There is a contest between the parties as to whether the regulations are punitive or beneficial in nature. Should the contentious parts of the regulations be read narrowly against the prosecution, given that breaches carry monetary penalty and potential reputational damage? Or is the legislation remedial or beneficial in nature, does it have a protective social function such that wide interpretations are appropriate?

4. Tabcorp contends that due to its punitive nature, any ambiguity in the legislation should be read narrowly against the prosecution. This was historically the position, as recalled by Kirby J in R v Lavender (2005) 222 CLR 67, given that in ages past the death penalty loomed large in the punitive regime, and the defendant was to be afforded the protection of a narrow construction against the prosecution. Such principles developed alongside the need to” level the field of combat” between the state and the defendant, to enhance the presumption of innocence, the right to silence and the need to put the Prosecution to strict proof. (at 89)

5. However, it is submitted by Mr Gray, and I accept, that the approach has changed over the years, particularly in light (again, per Kirby J in Lavender) of democratically elected parliaments and the proliferation of legislation that speak to so many aspects of everyday life. Thus, when legislation appears to address social ills, to set frameworks, to have a beneficial or protective purpose, strict construction against the prosecution is one of last resort: Waugh v Kippen (1986) 160 CLR 156 at 165.

6. Rather than comparing and contrasting each and all of the cases presented as support for the parties’ positions, I turn to the decision of Spigelman CJ as he then was, in Roads and Traffic Authority of New South Wales v Baldock [2007] NSWCCA 35. His Honour offered a clear and measured approach in relation to statutory interpretation which I adopt hereunder.

7. He stated (at [15]) that:

It is well established in Australian law that statutory interpretation requires a Court to have regard to the context of the legislation in the first instance and not merely after some kind of ambiguity is established. [emphasis added]

8. It is my firm view that on “both a broad and particular basis” the relevant parts of the Racing Administration Act and its regulations are concerned to address and alleviate the social ills that may flow from gambling advertising. As per the objects of the Act, it aims to “minimise the adverse social effects of lawful gambling”. The regulation deals broadly with what is described in the explanatory note as responsible gambling practices.

9. The relevant parts of the Act and regulation for our purposes appear to delineate how and under what circumstances the public may be informed of gambling opportunities through the various advertising mediums – be that television, newspapers, posters within gambling establishments, magazines, or the internet.

10. Clearly, one of the most potentially destructive effects of gambling advertising is its ability to entice and capture those gamblers or would-be gamblers that are prone to addiction, over spending, and problematic gambling behaviours. Thus, when amendments to the Racing Administration Act in relation to the advertising of betting services were introduced to Parliament on behalf of the then Minister Ian McDonald in 2008, reference was made to recent advertisements by interstate betting operations that were offering inducements in the form of free bets to persons opening betting accounts. It was stated:

The Government is concerned that such advertising may contribute to problem gambling by luring persons who can ill afford to bet or persons with a gambling problem to open betting accounts. The bill will address these concerns by amending the regulations to provide that wagering operators must not publish any gambling advertising that offers any credit, voucher or reward as an inducement to participate, or to participate frequently in any gambling activity, including offering an inducement to open a betting account. (New South Wales Legislative Council, Parliamentary Debates (Hansard), 25 November 2008)

11. Not only does clause 12 prohibit advertising of inducements to gamble, it prohibits the depiction of (inter alia) children gambling, the promotion of alcohol being consumed whilst gambling, and the suggestion that winning is a likely outcome or will make you financially better –off.

12. Other parts of the regulations require (inter alia) the provision of problem gambling brochures, warnings and information about gambling responsibly in multiple languages, and even the printing of warnings on every betting ticket issued.

13. It is in my view patently clear that the legislation is correctly described as beneficial in nature. Its provisions should be interpreted widely and embrace its focus on the protection of the public from gambling advertising that may contribute to the various social ills associated with problem gambling.

Elements of the offences

14. Originally six court attendance notices were before the court and had been laid in the alternative. On the first day of the hearing, the Prosecution elected to withdraw CANs B1-B3 on the basis that Tabcorp accepted that it was a person otherwise than a non-proprietary association or licensed wagering operator or an employee thereof within the meaning of clause 12(3) of the Regulation.

15. The defendant Tabcorp argues that at least some of the elements required are lacking in relation to each of the advertisements before the court.

16. According to subclauses 12(3) and 12(1)(h) the prosecution must establish the following elements in relation to each CAN before the court:

1. That Tabcorp is not an agent of a non-proprietary association (as defined in the Regulation) or licensed wagering operator (this element is conceded in each CAN);

2. Tabcorp has acted to publish (this is conceded in each CAN);

3. The publications are gambling advertising;

4. Each advertisement offers a credit voucher or reward;

5. Each offer was an inducement to participate in gambling activity including opening a betting account.

17. There are multiple issues raised in relation to how the court should assess advertising, and whether or not it offends the Regulation.

18. I have determined that I shall deal with each advertisement in turn, according to its corresponding court attendance notice. The disputed elements will be addressed (as referenced in the list above) and determinations made accordingly. It will become apparent that my findings in relation to contested elements are applicable to a number of the advertisements.

CAN A – 1 – Website Advertisements x 4

1. Ignite Your Friday Night – a 25% bonus on the price when backing a player to be the 1st try score on a Friday NRL match.

19. On 27 August 2015 Tabcorp published on the website by exhibiting an advertisement entitled “Ignite Your Friday Night”. A screenshot of the advertisement is found at tab 8 of Exhibit 1.

20. It is uncontested that the domain of the website is registered to the defendant Tabcorp.

21. The reader is given an opportunity to click on “find out more”, or “bet now” as per the screen shot. The reader would then be taken to the list of Friday night NRL matches in August, and presumably (although there is no screen shot) the “bet now” tab would provide the list of players as they then were within the market, and their “price”. I draw these conclusions on the basis of a comparison with exactly the same advertisement as it appeared in the Daily Telegraph on 28 August 2015, which forms part of CAN A-3.

22. It is the prosecution’s contention that this advertisement offends the legislation as a breach of elements 4 and 5 – in offering a credit voucher or reward as an inducement to participate in gambling activity including to open a betting account.

23. Tabcorp concedes that it is a publication, and concedes that it is a promotion which does constitute gambling advertising. It denies however that it is an offer of a credit voucher or reward as an inducement to participate in gambling activity including to open a betting account.

Offer

24. Much of the argument around these elements (in relation to this and other advertisements named in the CANs) revolves around the term “offer” at it appears in subclause 12(1)(h), and the way the term should be construed by the court vis-à-vis the advertisement itself. The court is not assisted by any definition within the Act or regulations themselves, and the parties have submitted that there is no previous judicial consideration of the term within the context of this legislation.

25. Tabcorp contends that the term should be narrowly construed against the prosecution, in accordance with their broad submission that any ambiguity in what they describe as this penal legislation should be read down to benefit the defendant.

26. It is thus submitted that the word “offer” should be interpreted as having a meaning more in line with that of the law of contract – the advertisement would have to display an offer immediately capable of acceptance, whereby the reader would need to be informed on the face of the advertisement exactly what needed to be done to be eligible to receive the benefit, and what benefit will be received if those things are done. As I understand the argument, Tabcorp suggests that the ads may fall short in this regard.

27. Mr Gray for the prosecution invites instead an interpretation more in line with the social or remedial nature of the regulations as I have found them to be. He argues that the regulations are akin to consumer laws, as they seek to set the parameters of permissible advertising and “protect” gamblers or potential gamblers from exposure to advertising that may promote the social ills connected with gambling behaviours. That is a contention that I entirely accept, given the finding that the court has made as to the purpose and nature of the legislation itself.

28. In that vein, the court was helpfully referred to Spender J’s reasoning in Wallace v Walplan Pty Ltd (1985) 5 FCR 315– a prosecution under the Trade Practices Act 1974 (Cth) involving prohibition of “bait” advertising. There it was held that the word “offer” simply meant “to make available”, that it was inappropriate in the context of consumer law and trade practices legislation to go beyond that non-technical meaning and venture into what offer may mean in the contractual sense.

29. I therefore accept the contention that the word “offer”, in the context of these regulations, is not to be used in the strict contractual sense but used in the ordinary non-technical sense of “make available”.

30. It is my firm view that clause 12 is explicitly focused on the gambling public as the consumer or potential consumer of the activity referred to in the gambling advertising. It is entirely appropriate to construe the term “offer” as simply to “make available”.

31. The court is left in no doubt that the “Ignite your Friday night” promotion constitutes an “offer” according to that wider definition. It certainly “makes available” a gambling construct for the reader to participate in at the click of a button. In any event, even if the offer was viewed in a contractual sense, it is patently clear what the reader needs to do to get the benefit (place a bet in the first try scorers market) and what the benefit will be – 25% of the set price – if their player is indeed the first try scorer.

32. I find this element proven in relation to the 25% bonus bet advertisement.

Credit, Voucher or Reward

33. Tabcorp contends that the bonus 25% offer is not a credit voucher or reward for the purposes of the regulation. It is suggested that all that the term “25% bonus on the price” really reflects is the betting odds- that they simply form part of the wager and do nothing outside of that. The court is once again invited to read down the terms against the prosecution.

34. It is of note however that the regulations are expressed in vary wide terms – “any” credit voucher or reward. That word, in my view, requires the court to “dig deeply” in relation to the prohibition.

35. It may well be that Tabcorp itself calculates and incorporate this 25% bonus so that it is in no different financial position vis-à-vis the customer than it would be without the bonus advertised, but it is patently obvious in my view that the regulation is concerned with the viewer or reader of the advertisement, not what actually occurs on Tabcorp’s books.

36. In my view the wording of the advertisement speaks volumes- its characterisation as an offer of a reward or credit could not be clearer. The reader will get 25% more, described as a bonus, than the advertised price if they place a winning bet on the first try scorer. It is indeed offered in terms of an added contingency, a hope or an expectation– plainly the language reflects those potentialities.

37. I find this element proven in relation to the 25% bonus bet advertisement.

As an inducement to participate …. in gambling activity or open a betting account.

38. Whilst there is no legislative definition of the term inducement, its dictionary definition is most helpful– an inducement is “Something that induces or persuades; an incentive”.

39. Counsel for Tabcorp submitted that the prosecution’s case had been vague in relation to this element. He argued that the regulation has subsequently been amended to widen the prohibition on inducements in gambling advertising, and to delete the reference to a credit voucher or reward. However, he stated that the OLGR published fact or guidance sheets in relation to the new regulations which reveal that the ads as they appeared in August 2015 would not offend the current regulation. With respect, it is not for the court to involve itself in this type of reasoning process – it can only deal with the facts and the regulations that are before it.

40. In any event, it is my firm view that the language of the advertisement offers a bonus financial return as an incentive to place a specific type of bet on a specific day. It is correctly and obviously in my view described as an inducement to participate in the gambling activity, that is, the Friday night first try scorers market.

41. I find each of the elements proven beyond a reasonable doubt in relation to the “Ignite your Friday night” promotion as it appears at number 1 on CAN A1.

CAN A1 – 2, 3, and 4

2. Make your Socceroo Debut – a chance for TAB Rewards members to win and experience including VIP tickets.

3. Owner for a Day - an opportunity for TAB Rewards members to experience the thrill of owning a race horse.

4. TAB Rewards – earn points and gain access to exclusive benefits.

42. Each of these advertisements or promotions appeared on the TAB website on 27 August 2015. Tabcorp contends in each case that neither element 3, 4 or 5 as listed above is made out by the prosecution.

43. A copy of the screen shots in relation to “Socceroo Debut” is exhibited at Tab 11 of Exhibit 1. Its terms and conditions are at Tab 12. A copy of the screen shot for “Owner for a Day” is exhibited at tab 13 of Exhibit 1, and its terms and conditions at Tab 14. A copy of the screen shot of TAB Rewards is exhibited at Tab 9, and its terms and conditions at Tab 10.

Element 3 – The publication is gambling advertising

44. Tabcorp disputes this element in relation to all three promotions as above.

45. Clause 11 defines gambling advertising as “advertising that gives publicity to, or otherwise promotes or is intended to promote participation in gambling activities”.

46. Tabcorp contends that the definition of gambling advertising encompasses placing a bet or opening a betting account, but that it does not mean any conduct associated with gambling. Again, it is submitted that it too wide a definition in favour of the prosecution.

47. According to Tabcorp, it cannot be the case that advertising the rewards programme and the various offers within it (Socceroo debut and owner for a day) incite betting or gambling per se, or is an inducement to open a betting account. Mr Lancaster submits (at T.58, 30):

… there is no connection made between these benefits that come from being TAB rewards program on the one hand and laying a bet on the other hand.

48. There is, with respect, a basic flaw in this argument. It is patently clear from the material exhibited before me that in order to be a member of TAB Rewards and have the promotions available, a person must do one of two things –

1. Open a betting account; or

2. Bet in cash at participating venues.

49. These are absolutely necessary preconditions. They are found throughout the terms and conditions (as exhibited) that must be read in conjunction with the advertisements as exhibited. The reader is directed to them through the website promotions.

50. It is inconceivable that the promotions and terms and conditions of membership attached to them are mutually exclusive, or can be read in isolation. They must, to make any sense to the reader at all, be incorporated into the advertisement. What indeed would be the point of advertising membership of the rewards programme without telling the reader how to go about becoming a member?

51. It is in my view incontrovertible that the promotions are indeed gambling advertising- you cannot partake in the promotions unless you are a TAB Rewards member, to be a TAB Rewards member you must open a wagering account with TAB limited or bet in cash (and thus hold a Cash loyalty card) at participating TAB venues.

52. It is also clearly the case, as submitted by Mr Gray, that quite apart from the necessary preconditions of membership, the advertisements in and of themselves promoted wagering. Thus, in “make your Socceroo debut”, placing a bet gets the reader an extra entry into the competition; in “owner for a day”, the prize winner receives the equivalent points of any prize money won by the horse, which could be redeemed for bets or wagers. In the TAB Rewards programme, points are earned through placing of bets or wagers and could be redeemed for bets or wagers.

53. It is my firm view that the publications are indeed gambling advertising and that element number 3 is made out in relation to the rewards programme and offers within it.

Elements 4 and 5 – offers a credit voucher or reward as an inducement to participate or to participate frequently in betting activity, including to open a betting account.

54. These two elements are conveniently dealt with together. The prosecution must prove that each advertisement both offers a credit voucher or reward, and that that such a credit voucher or reward is an inducement to participate in gambling activity including to open a betting account.

55. Tabcorp contends that neither the “owner for a day “or “make your Socceroo debut” promotions, nor the TAB Rewards membership itself are an “offer” of a credit voucher or reward. It is contended that it is merely advertising that promotes membership of the rewards programme.

56. All the a TAB Rewards promotions appear as a matter of fact to offer rewards. On either a wide or restrictive view of the term “offer” as used in the section, the advertisements offer, to those people willing to sign up for membership, or those that are already members, the rewards as listed in the ads. It is crystal clear to the reader what needs to be done in order to participate, and what benefits exist as part of that participation.

57. TAB Rewards membership brings with it many and varied items – all of which are fundamentally and obviously couched in terms of “rewards”. They are many and varied - VIP Tickets, hospitality in corporate suites, gift cards, merchandise, racing tickets and so on. A rewards member can make their Socceroo debut, or be an owner for a day. You must however be a TAB Rewards member to be involved; to do that you must either open a wagering account or have a cash loyalty card which comes from placing cash bets. It is crystal clear in my view that the Rewards program is advertised as an inducement to open an account or to bet – indeed you cannot participate in the potential spoils of membership without doing so.

58. Clearly the prosecution has made out both elements 4 and 5 in relation to the TAB rewards programme and the promotions within it.

59. I find each element in relation to the particular ads numbered 2, 3 and 4 made out in CAN A-1.

CAN A-2 – Luck of the Draw

Back any English Premier League Team in the Result market during august 2015 and we will replace the stake with a bonus bet up to $50 or TAB Rewards points if the game ends in a draw.

60. On 28 August 2015 an advertisement, Luck of the Draw, appeared in the newspaper publication the Daily Telegraph. It is exhibited at tab 6. The advertisement included the words “TAB bonus bet, T and C’s apply”. A copy of the terms and conditions is exhibited at tab 7.

61. As to the disputed elements, it is conceded by Tabcorp that the advertisement does constitute gambling advertising.

62. The remaining elements are contested.

Offer

63. As to whether or not the advertisement is an offer, the court is again invited by Tabcorp to read the term restrictively, a reader is not adequately informed on the face of the advertisement as to the terms, in a contractual sense, of what they must do to participate and potentially benefit. As per my findings above, on any reading – narrow or wide - I am convinced that an “offer” is made out, the reader is informed, in precise terms actually, what is available to them if they choose to participate in the result market during August.

Credit Voucher or Reward

64. Tabcorp argue that there is nothing within the advertisement in terms of an offer of credit voucher or reward. My understanding of the advertisement is that if a bet is placed that the relevant game ends in a draw, and it does end in a draw, then the better will receive a bonus bet – that is (as per Mr Gray’s submission) a token to place another bet in a different market or to be converted to a TAB Rewards points. The very language in which the ad is couched - in terms of the giving of “extra”, a “bonus”, most certainly reflects that the advertisement is indeed in terms of a credit or reward upon placing a winning bet – over and above the bet itself. Again, whether or not Tabcorp’s financial position would in fact be any different upon payment of the bonus is not to the point, it is the advertisement itself, and its effect on the reader that is determinative here.

As an inducement

65. As per the “ignite your Friday night” advertisement, it is my firm view that the bonus bet is viewed properly as an inducement to participate in gambling activity or indeed to open a betting account. This ad refers to a specific market, during the month of August; clearly there are a number of dates and matches available for one to frequently place their bets, on the premise of the added bonus available as found herein. Membership of a TAB Rewards is promoted here also; you can have your extras paid into bonus points, but of course you must bet in cash or operate a wagering account to be eligible.

66. I find that each of the elements is made out in relation CAN A-2.

CAN A-3 - Ignite your Friday night

67. On the 28 August 2015 an advertisement, “Ignite your Friday Night”, appeared in the newspaper publication the Daily Telegraph. A copy of the advertisement is exhibited at tab 5.

68. The content of this advertisement was in exactly the same terms as the website, except that the players’ names appeared next to the advertisement and the terms and conditions appear in smaller writing next to an asterisk beneath the main ad.

69. Tabcorp conceded that elements one, two and three were made out here.

70. It is convenient to state here that I make the same findings as to each and every contested element of the offence being made out by the prosecution as applied to the website advertisement, in that it is an offer or a credit voucher or reward that is an inducement to participate in gambling activity.

The defence: subclause 12(4)

71. In an interlocutory judgement on 15 July 2016 this court held that subclause 12(4) was indeed to be construed as a defence and not an element to be established and negatived by the prosecution. Tabcorp then went on to invoke the defence. It is in these terms -

(4)  Subclause (3) does not apply if the advertising relates to a non-proprietary association or licensed wagering operator and the publication of the advertising was approved in writing by the non-proprietary association or licensed wagering operator or an employee or agent of the non-proprietary association or licensed wagering operator.

72. It is Tabcorp’s contention that even if (as I have found) the advertisements breach the regulations, the application of subclause 12(4) renders the findings nugatory. As I understand the submissions Tabcorp’s position is as follows:

1. The advertising does relate to a licensed wagering operator – TAB Limited. This is conceded by the prosecution and without controversy and is clear on the face of each of the adverts that they relate to TAB Limited.

2. The publication of the advertisements was, in each instance approved in writing; and this was done

3. By an employee or agent of TAB Limited - in the form of Tab Limited’s legal counsel.

73. Each of these propositions must be dealt with in turn. Before doing that, I pause to make these observations – the exercise that the court is being asked to embark upon here involves inferences being drawn vis-à-vis Tabcorp, its corporate regime and employees in the form of legal counsel within and apparently across its various subsidiaries.

74. At first blush, these propositions do not sit comfortably with the fairly straight-forward wording of the clause itself. As Mr Gray for OLGR contended, the clause appears simply to address the actual publishers of the advertisements (newspapers, magazines, internet sites). It seeks in my view to remove the prospect of prosecution for those entities as long as they have approval in writing from those that placed the ad. Reading on to subclause 12(5) lends weight to this observation. It states:

(5)  A non-proprietary association or licensed wagering operator, or an employee or agent of a non-proprietary association or licensed wagering operator, must not enter into or extend the duration of any contract or arrangement for the publication of gambling advertising that does not comply with this clause. [emphasis added]

75. In my view, this subclause, when read as it must be together with the whole of the clause, and particularly with subclause 12(4), speaks to the arrangements (contractual or otherwise) between the publishers and the licensed wagering operator vis-à-vis the placements of the advertisements themselves.

76. That being said, Tabcorp is named as the domain name holder for the internet advertisements relating to TAB Limited. The defendant contends that Tabcorp is thus entitled to invoke the defence in relation to having approval in writing for the advertisements from TAB Limited. As for the newspaper ads, it is also contended that Tabcorp can invoke the section, because Tabcorp placed the ads in the newspaper, with the written approval of employees of TAB Limited.

Contention 1: Legal Advisers are employees of Tab Limited

77. It is trite to observe that this is somewhat of a convoluted proposition. Tabcorp contends that Mr Hornigold (from whom the court heard and whose statement is exhibited at 2) and the various lawyers on his team are correctly described as employees of TAB Limited, for the purposes of invoking the defence. This on the basis that although their employment contract, as tendered, describes their employer as Tabcorp Assets, a subsidiary of Tabcorp itself, the legal advisers advise and act for all the subsidiaries named within the corporate structure, including TAB Limited. Thus, Mr Lancaster invited the court to accept this proposition at T.61, 50:

So while it can't be said that there was more than one employer because Tabcorp Assets is the employer, as stated, it can be said that the obligations and the exercise of each employee’s obligations is something that the related parties have the benefit of and the employees act in their interests and the obligations under the employment contract can be enforced by those other entities in the corporate group. So while not formally the employer, it’s the next best thing because you have TAB Limited and Tabcorp Holdings and the other companies in the group have the benefit of receipt of the obligations of these employees with this provision in their agreement. That includes all of the authors, Mr Hornigold and the other authors of the emails that we rely on as constituting the approval.

78. I am of the firm view that this proposition ought to be rejected. As per Mr Gray’s submissions, there is nothing before me to indicate that TAB Limited has anything to do with the employment of the legal advisers, quite the reverse. Each of the legal team is employed by Tabcorp Assets (as per the contract and offer of employment at exhibit 2). They are not TAB Limited, and not employees of TAB Limited. It is but wishful thinking to suggest that TAB Limited can be seen as “the next best thing” to the employer and thus “fit in” to the definition under subclause 12(4).

Contention 2 – Legal advisers are agents of TAB Limited

79. Whilst Mr Lancaster’s submissions mainly revolved around the legal advisers as employees of Tab Limited, the legal advisers as potential agents for Tab Limited must be dealt with.

80. As per Mr Gray’s written submissions, a solicitor can of course act as agent for his or her client. Again however, there is no evidence before the court to suggest that TAB Limited was at any time the client of these legal advisors. There is no communication between anyone from TAB Limited and the legal team before the court. Each piece of email correspondence seeking input from the legal team in relation to the advertisement or promotions, as exhibited, comes from a person employed by Tabcorp Assets. Nothing before the court reflects any instruction to or from TAB Limited.

81. Mr Hornigold himself never suggested that he considered TAB Limited to be his client or he its agent. Indeed, as Mr Gray submits, if each individual lawyer were indeed an agent of TAB Limited, they would each be opened up for prosecution under subclause 12(1) if they as its agents published the offending material.

82. Finally, it is highly relevant to observe that claims of legal privilege were initially made by Tabcorp over the purported approvals correspondence now exhibited as part of their defence. That was on the basis that it was confidential communication between Tabcorp and a lawyer, or between two or more lawyers acting for Tabcorp, or comprised a confidential document prepared by Tabcorp, a lawyer or another person, for the dominant purpose of Tabcorp being provided with professional legal advice. It seems clear to the court that the position has now been revised to “fit” into the contention that the lawyers are somehow employees or agents of TAB Limited. It is a revision not correctly pursued in my view. I reject either proposition as to the status of the lawyers being employees or agents of TAB Limited.

Emails from legal advisers to various recipients constitute written approval for publication

83. Tabcorp submits that the email correspondence exhibited through Mr Hornigold between lawyers and the marketing department constitutes approval for publication. Of the advertisements or promotions for the purposes of subclause 12(4).

84. The court is asked to accept that Mr Hornigold and his legal team are in fact tasked with such approval, that their input represents the final step in the publication process. It is submitted that whilst the legal team do give legal advice as to content to employees in the marketing area, they do more than that – they are the “sign-off” and the last step in the process for publication.

85. Thus, rather than publication itself being a business decision taken elsewhere within Tabcorp, it is really the legal sign- off that is the final approval for publication. It is submitted that (at T. 63):

It entirely makes sense for the lawyer cog to be the last stage in the process because a business would fall apart under the weight of its own inefficiency if the lawyers were giving advice on drafts that the marketers never intended to send out. In our submission, there is a strong inference available that when it gets to the lawyers the business has decided to publish, subject to what the lawyers would say. In that sense, when the lawyers give their approval and then when it's published in a form that reflects that approval, that shows that TAB Limited, in our respectful submission, has given approval in writing to the publication of the advertisements.

86. With respect, this is an inference and a construction that the court rejects entirely. Apart from piecing together these few emails, there is no solid evidence of a written approval for publication. It is unavoidable that is what the clause speaks to. The court is not privy to where it is these emails end up, and with whom. Are they somehow passed on via marketing to the publisher? How is that done? Is there a standard form? Who is the recipient in each case? These unanswered issues in my firm view point to the legal input being just that, legal advice given and taken (or not) as a step towards publication – not publication approval itself.

87. Moreover, the court is being asked to construct the legal input as written approval for publication. It is suggested that they somehow co-exist (at T.63, 30) as per Mr Lancaster’s submissions:

So when he says, "Nice work, all you have to do is change the permit number" or whatever, on the one hand or whenever he says, "This looks good, I've just got a couple of deletions," in each instance what he's doing has at least a dual character, in our submission. The approval in writing is constituted by his legal signoff. The fact that it is legal advice to Tabcorp Holdings is one thing but the fact that the lawyer doesn't have at the front of his mind cl 12 of the regulation is not to the point.

88. The court is at a loss to understand how to reconcile these propositions – whilst it is legal advice that is given, it is also allegedly approval for final publication in line with subclause 12(4). I find that the two cannot arise out of the one statement or suggestion in an email by the lawyer to the marketing department.

89. Mr Lancaster went on to suggest to the court that the author of the various emails containing legal advice need not appreciate what the role actually entails– apparently Mr Hornigold wasn’t really aware of his dual role, as submitted:

Mr Hornigold said that he didn't have clause 12 in mind for his part when he said what he said in respect of the ads he legalled. There does not need to be - there does not need to have been a subjective appreciation of the consequences of the legalling. In our respectful submission, the defendant is entitled to say, as appears from the natural inference and from the documents, that when he was saying, effectively, "This ad is good to go, subject to these minor matters being corrected," he was giving written approval on behalf of companies within the group to which he owed obligations for the publication of the advertisement.

90. It is trite to observe that if one is adopting responsibility for publication approval, one would be expected to have clearly defined and understood what that entails, given the consequences of breach.

91. I accept absolutely the contention of the prosecution that the email chain in evidence before me falls far short of written approval for publication under subclause 12(4). I find that those communications are, purely and simply, legal advice on aspects of the promotions. In accordance with Mr Gray’s analysis, the content of the emails themselves revolve around changes and adaptations that speak to compliance with the regulations around gambling advertising. When the word “approval” appears in that advice, it is in my view inescapably approval in terms of being legally compliant.

92. The convoluted inferences that the court is being asked to make are in my view simply not reflective of the reality of the situation. I reject that such inferences are available. Subclause 12(4) is not made out as a defence.

93. Each of the offences is made out beyond a reasonable doubt. CANs A1 to A3 are proven beyond a reasonable doubt.

Magistrate S McIntyre

Downing Centre Local Court

16 December 2016

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Decision last updated: 02 February 2017