TAB Limited v Racing Victoria Limited; TAB Limited v Greyhound Racing Victoria
[2009] VSC 338
•13 August 2009
IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
List C
No. 4643 of 2009
| TAB LIMITED (ACN 081 756 308) | Plaintiff |
| and | |
| RACING VICTORIA LIMITED (ACN 096 917 930) | Defendant |
No. 5045 of 2009
No. 6042 of 2009
No. 6529 of 2009
| TAB LIMITED (ACN 081 756 308) | Plaintiff |
| and | |
| GREYHOUND RACING VICTORIA | Defendant |
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JUDGE: | DAVIES J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 – 26 June 2009 | |
DATE OF JUDGMENT: | 13 August 2009 | |
CASE MAY BE CITED AS: | TAB Ltd v Racing Victoria Ltd and TAB Ltd v Greyhound Racing Victoria | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 338 | |
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STATUTE – Construction of transitional provision between repealed and current legislation – Whether transitional provision created a statutory fiction that “approval” under earlier section amounts to a “grant of approval” under later section – Cl 18.2 in Part 18 of Schedule 7 Gambling Regulation Act 2003 – Division 5A Gambling Regulation Act 2003.
STATUTE – Construction – Power to vary approval – Imposition of a fee as a condition of approval – Validity – Whether specification of an actual amount was required by statute – Whether the fee imposed was sufficiently certain – Whether a requirement that the fee be a fair and reasonable economic contribution – Division 5A Gambling Regulation Act 2003.
ADMINISTRATIVE LAW – Retrospective operation of decision – Whether retrospective component severable.
ADMINISTRATIVE LAW – Procedural fairness – Whether duty to afford the opportunity to be heard owed – Whether imposition of a fee condition a policy decision not attracting the requirement of procedural fairness.
CONTRACT – Variation of terms – Whether unilateral variation of the fee condition permissible.
WORDS AND PHRASES – “Under”.
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APPEARANCES: | Counsel | Solicitors |
| Proceeding No.4643 of 2009: For the Plaintiff | Mr A Archibald QC with | Freehills |
| For the Defendant | Mr C Caleo SC with Mr M Collins | Clayton Utz |
| Proceeding Nos. 5045, 6042 and 6529 of 2009: For the Plaintiff | Mr A Archibald QC with | Freehills |
| For the Defendant | Mr S McLeish SC with Mr J Davis | Minter Ellison |
HER HONOUR:
TAB Ltd (“TAB”) is the licensed totalisator for New South Wales and also operates a totalisator in Victoria. It has approval to publish race fields from Racing Victoria Ltd (“RVL”) and Greyhound Racing Victoria (“GRV”), the controlling bodies for thoroughbred horse racing[1] and greyhound racing[2] in Victoria respectively. TAB obtained these approvals before Division 5A of the Gambling Regulation Act 2003 (Vic) (“the GRA”) was legislated. After Division 5A became effective,[3] both RVL and GRV imposed fees on TAB as a condition of their approvals, relying on Division 5A as the source of power. In these proceedings, TAB challenges the validity of the fee conditions. I have concluded that RVL and GRV were authorized under Division 5A to impose fees on TAB as a condition of their approvals, but find that neither RVL or GRV exercised that power validly.
[1]Racing Act 1958 (Vic) s 83F; s 2.5.19A Gambling Regulation Act 2003 (Vic).
[2]Racing Act 1958 (Vic) s 83F; s 2.5.19A Gambling Regulation Act 2003 (Vic).
[3]On 4 September 2008.
A. Approvals and Decisions
Appended to the judgment are the relevant terms of the approvals in force when Division 5A became applicable and the notices of variation.
(a) RVL Approval (Appendix 1)
The approval for the period 1 August 2008 to 31 July 2009 is recorded in a letter dated 11 July 2008 from RVL to TAB. The grant of approval was subject to the terms of an agreement comprising four documents, including a document styled the “Economic Contribution Agreement” and a document containing general terms and conditions.
(b) RVL Decision (Appendix 2)
RVL notified TAB by letter dated 4 December 2008 that it had a new fees policy and, with effect from 1 December 2008, that it was a condition of approval that TAB pay a fee based on 10% of revenue derived from betting on Victorian thoroughbred race fields (less GST). RVL relied on s 2.5.19D(7)(a) in Division 5A of the GRA as the source of power to impose the fee as a condition of approval. RVL also stated , “for the avoidance of doubt”, that it was exercising “its contractual right to vary the Economic Contribution Agreement” to impose the fee.
(c) GRV Approval (Appendix 3)
The relevant approval from GRV is contained in a letter dated 16 November 2005. Although the initial approval period was until 31 March 2006, GRV has treated the approval as continuing to the present time.
(d) GRV Decision
There are three letters from GRV that TAB challenges as decisions in these proceedings. The letters are dated 24 December 2008 (“the first GRV letter”), 16 February 2009 (“the second GRV letter”) and 8 April 2009 (“the third GRV letter”). GRV claims that the relevant decision is contained in the first GRV letter and that neither the second nor third GRV letters constitute the decision to vary the approval by imposing a fee as a condition of approval.
(i) the first GRV letter (Appendix 4)
The first GRV letter made TAB aware of changes that GRV was making to its policies and conditions for approval and informed TAB that GRV would continue to approve TAB to use and publish race fields on an interim basis until 30 June 2009, provided that TAB complied with, amongst other things, a condition that it pay GRV 10% of the gross profits that TAB received in connection with, or any contingency relating to, GRV greyhound races.
TAB responded by raising concerns with GRV about the validity of the fee and its ability to calculate the amount of the fee. A letter followed, dated 10 February 2009, in which TAB referred to an interim arrangement made with GRV, which was “not a formal variation under the Act”, for TAB to pay race field fees to GRV on the basis of 1.5% of turnover.
(ii) the second GRV letter (Appendix 5)
The second GRV letter was in response to the 10 February 2009 letter from TAB. GRV noted that TAB was seeking clarification of certain matters about the computation of the fee but asserted its view that the fee condition was “not unlawful”. Although GRV did not accept the legitimacy of the concerns raised by TAB, GRV went onto to state that it was “willing to accept fees from TAB Limited … on the basis of 1.5% of gross turnover on GRV races (or contingencies relating to GRV races)” to apply to the end of the current approval period, 30 June 2009, subject to compliance with certain conditions. The letter went onto state that:
The terms of this letter shall constitute a variation to TAB Limited’s publication and use approval (as specified in the December Letter) pursuant to section 2.4.19D(7) [sic] of the Act and is effective on and from the date of this letter.
(iii) the third GRV letter (Appendix 6).
The 5 March 2009 letter from TAB was the genesis of the third GRV letter. The third GRV letter purported to clarify the issues raised by TAB about the computation of the fee.
B. Grounds on which validity is challenged
The grounds of challenge are that:
(a)RVL and GRV did not have power under Division 5A of the GRA to vary an approval granted before the enactment of Division 5A;
(b)the fee conditions operate retrospectively, which is not authorised under Division 5A;
(c)the fees imposed were not for specified amounts as is required by s 2.5.19D(4) of the GRA;
(d)the fees were not determined on the basis that they are a fair and reasonable economic contribution from TAB for its use of race fields in its business;
(e)TAB was denied procedural fairness because it was not given an opportunity to be heard before the fee conditions were imposed; and
(f) the fees are not ascertainable with certainty.
Further, TAB challenges the RVL decision on the basis that the variation was not authorised by the contractual terms governing RVL’s approval.
The orders sought include the repayment to TAB of the fees that it has paid, under protest, to RVL and GRV. RVL accepts that TAB is entitled to the return of the payments made to it if the fee condition is invalid. GRV and TAB have agreed that the question as to whether GRV must refund the payments made to it if the GRV decision is found to be void should be dealt with separately from the determination of the validity of the fee condition.
C. Legislative background
(a) Section 2.5.16A of the GRA
Division 5A of the GRA became effective on 4 September 2008, on the repeal of s 2.5.16A of the GRA by s 5 of the Gambling Legislation Amendment (Problem Gambling and Other Measures) Act 2007 (Vic).
Under s 2.5.16A, which had applied from 30 November 2005, it was an offence for a “wagering service provider”[4] (“WSP”) to “publish or otherwise make available” a race field[5] without approval of the appropriate controlling body, unless exempted by s 2.5.16A(2). Section 2.5.16A provided as follows:
[4]GRA s 2.5.19A; prior to 4 September 2008, GRA s 2.5.16A(3).
[5]Defined in s 1.3 of the GRA to mean:
“any information that identifies, or is capable of identifying, the names or numbers of the horses or greyhounds-
(a)nominated for, or which will otherwise take part in, an intended horse race, harness race or greyhound race to be conducted in Victoria; or
(b)that have been scratched or withdrawn from an intended horse race, harness race or greyhound race to be conducted in Victoria.
2.5.16A Restrictions on publication of race fields
(1)A wagering service provider must not, in Victoria or elsewhere, publish or otherwise make available a race field in the course of business without the approval of the appropriate controlling body.
Penalty: 60 penalty units.
(2) Subsection (1) does not apply to –
(a) the licensee within the meaning of Chapter 4; or
(b) the wagering operator; or
(c) an approved bookmaker; or
(d) a publication that is approved under section 2.5.19.
TAB’s business operations in Victoria qualified it as a WSP for the purposes of s 2.5.16A(1), not exempted by s 2.5.16A(2), and thus TAB required the approval of the relevant controlling bodies in Victoria to publish race fields. RVL and GRV both gave TAB their approval for the purposes of s 2.5.16A.
(b) Division 5A of the GRA
Division 5A introduced new measures for the regulation of race fields. The restriction on publication of race fields was re-enacted in s 2.5.19B of Division 5A but in broader terms to s 2.5.16A. Section 2.5.19B makes it an offence for a WSP to use, as well as to publish or otherwise to make race fields available in the course of business unless the WSP has the approval of the appropriate controlling body and complies with any conditions of approval. Division 5A additionally regulates the grant and terms of approval. The approval must now be a “publication and use approval” granted by the relevant controlling body under s 2.5.19D of the GRA. The relevant legislation is as follows:
·“Publication and use approval” is defined in s 2.5.19A:
2.5.19A publication and use approval means an approval granted under section 2.5.19D
·The offence is contained in s 2.5.19B:
2.5.19B Restrictions on publication and use of race fields
(1)A wagering service provider must not, in Victoria or elsewhere, publish, use or otherwise make available a race field in the course of business unless –
(a)the wagering service provider has obtained the publication and use approval of the appropriate controlling body; and
(b)the wagering service provider complies with the conditions (if any) to which the approval is subject.
Penalty: 60 penalty units.
(2) Subsection (1) does not apply to –
(a) the licensee within the meaning of Chapter 4; or
(b) the wagering operator; or
(c) an registered bookmaker; or
(d) a publication that is approved under section 2.5.19.
·An application for a publication and use approval must be made in accordance with s 2.5.19C as follows:
2.5.19C Application for race field publication and use approval
(1)A wagering service provider may apply to an appropriate controlling body for publication and use approval.
(2)An application for approval must-
(a)be made in the prescribed time; and
(b)be in the prescribed form; and
(c)contain or be accompanied by any additional information the controlling body requires.[6]
[6]The Gambling Regulation (Race Fields) Regulations 2008 contain the prescribed times and form.
·Section 2.5.19D regulates the powers and authority of a controlling body on an application for race field publication and use approval as follows:
2.5.19D Publication and use approval
(1)An appropriate controlling body may grant an approval to a wagering service provider to publish, use or otherwise make available in the course of business, in Victoria or elsewhere, a race field if the wagering service provider makes an application for that approval in accordance with section 2.5.19C.
(2)For the purposes of determining an application for publication and use approval, an appropriate controlling body-
(a)must consider the prescribed matters (if any);
(b)may consider any other matters the appropriate controlling body considers to be relevant.
(3)An appropriate controlling body must-
(a)determine an application by either granting or refusing publication and use approval in the prescribed time; and
(b)notify the applicant in writing of its decision to grant or refuse publication and use approval in the prescribed time.
(4)Publication and use approval may be granted subject to any conditions the appropriate controlling body thinks fit, including a condition that the wagering service provider pay a fee or a series of fees of an amount or amounts and in the manner specified in the approval.
(5)Any fee that is payable as a condition of the approval is a debt due to the appropriate controlling body that granted the approval and may be recovered in any court of competent jurisdiction.
(6)Publication and use approval-
(a)takes effect on the day specified by the appropriate controlling body in the approval; and
(b)remains in force for the period specified by the appropriate controlling body in the approval, unless revoked earlier under subsection (7).
(7)At any time the appropriate controlling body, by written notice to the wagering service provider, may-
(a)vary the publication and use approval (including a variation of the conditions to which the approval is subject); or
(b)revoke the publication and use approval for any reasonable cause stated by the appropriate controlling body in the notice of revocation.
·A decision of a controlling body to refuse or revoke an application or to impose or vary a condition of a publication and use approval, other than a condition relating to the payment of a fee or series of fees, is made reviewable by VCAT pursuant to s 2.5.19E.
·Section 2.5.19F authorises controlling bodies to agree to appoint an agent to collect fees payable to the controlling bodies under a publication and use approval for the purposes of the Trade Practices Act 1974 (Cth) and the Competition Code.
(c) Transitional provision: Clause 18.2
It is not in issue that the approvals held by TAB, which RVL and GRV sought to vary by the imposition of fee conditions, were not approvals that TAB had applied for under s 2.5.19C or that RVL or GRV had granted under s 2.5.19D. RVL and GRV rely on a transitional provision, cl 18.2 in Part 18 of Schedule 7 to the GRA, to bring those approvals within the ambit of Division 5A and, specifically, within the power to vary contained in s 2.5.19D(7). Clause 18.2 prescribes that approvals in existence at the time that Division 5A became effective are “taken … to be a publication and use approval under s 2.5.19D” as follows:
18.2 Publication and use approvals
(1) An approval that was in force under section 2.5.16A immediately before the commencement day is taken, on or after that day, to be a publication and use approval under section 2.5.19D.
D. Findings
(a)Clause 18.2 in Part 18 of Schedule 7 to the GRA operates to
bring a s 2.5.16A approval within the ambit of s 2.5.19D
The first issue to be decided is whether cl 18.2 created the statutory fiction[7] that an approval for the purposes of s 2.5.16A (“s 2.5.16A approval”) is a “publication and use approval” to which the provisions of s 2.5.19D apply including, relevantly, s 2.5.19D(7) or whether, as TAB contended, the function and effect of cl 18.2 simply is to ensure that a WSP with an operative s 2.5.16A approval is not in breach of the prohibition on the publication and use of race fields contained in s 2.5.19B.
[7]Muller v Dalgety & Co Ltd (1909) 9 CLR 693, 696 (Griffith CJ); Hunter Douglas Australia Pty Ltd v Perma Blinds (1969) 122 CLR 49, 65 (Windeyer J).
A s 2.5.16A approval would not fall within the terms of s 2.5.19B but for cl 18.2, as the definition of a “publication and use approval” in s 2.5.19A dictates the meaning of that expression as used in s 2.5.19B. The definition is exhaustive of the kind of approval required by a WSP to avoid committing an offence under s 2.5.19B.[8] Plainly, a s 2.5.16A approval is not within the ambit of the definition. Plainly also, the legislature intended by cl 18.2 that a WSP with a s 2.5.16A approval should be taken to have approval for the purposes of s 2.5.19B.
[8]Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628, 635 (Barwick CJ, McTiernan and Taylor JJ).
As a matter of language, cl 18.2 does not designate a s 2.5.16A approval to be a publication and use approval as defined in s 2.5.19A because such an approval is not taken to be granted under s 2.5.19D, which is one of the integers of the definition. Senior counsel for TAB submitted that this omission indicates the statutory purpose of cl 18.2. It was contended that the omission was deliberate, in that had the legislature intended cl 18.2 to do more than protect a WSP with a s 2.5.16A approval from committing an offence under s 2.5.19B, the clause would have designated a s 2.5.16A approval as a publication and use approval granted under s 2.5.19D. It was submitted that it is apparent from the language and confirmed by the explanatory memorandum for the amending Act[9] that the statutory purpose of cl 18.2 was not to create the statutory fiction that a s 2.5.16A approval is an approval for all purposes of s 2.5.19D but, rather, only for the purposes of s 2.5.19B.
[9]Explanatory Memorandum, Gambling Legislation Amendment (Problem Gambling and Other Measures) Act 2007.
The explanatory memorandum stated that the new “clause 18.2 preserves the effect of any approvals that were made under s 2.5.16A immediately before the commencement day”.[10] In my view, the explanatory memorandum does not provide assistance on the proper construction of cl 18.2 as the statement is not illuminating about its statutory purpose. The statement is too general to provide a clear indication of the legislative intent of the clause.
[10]Section Notes for section 50 (which inserts clause 18.2) of the Explanatory Memorandum, Gambling Legislation Amendment (Problem Gambling and Other Measures) Act 2007.
I do not accept that the language of cl 18.2 is consistent with a construction that the terms of s 2.5.19D(7) are directed only to authorising the amendment of a “publication and use approval” as defined in s 2.5.19A. In my view, TAB’s construction fails to give proper meaning to the phrase “under section 2.5.19D”. The expression “under” generally has the connotation “pursuant to” or “in accordance with”.[11] With that in mind, it makes sense that cl 18.2 did not designate a s 2.5.16A approval to be a publication and use approval as defined in s 2.5.19A. It did not have to make that designation to bring a s 2.5.16A approval within the ambit of s 2.5.19D. This is because the definition of a publication and use approval in s 2.5.19A has no operation independent of the substantive provisions within Division 5A that deal with those approvals.[12] The fact that “granted under s 2.5.19D” is one of the integers of the definition in a publication and use approval in s 2.5.19A does not mean that the purpose and effect of cl 18.2 is limited with respect to the subject matter of s 2.5.19D. Clause 18.2 should conform in meaning with the provision to which it applies, namely, s 2.5.19D.[13] For the purpose of s 2.5.19D, cl 18.2 did not have to create the statutory fiction of a grant because the grant had happened, albeit before Division 5A was in force. In my view, when cl 18.2 provides that a s 2.5.16A approval is “taken … to be a publication and use approval under s 2.5.19D”, it is giving legal effect to s 2.5.19D as the source of the authority for the s 2.5.16A approval to bring the s 2.5.16A approval within the ambit of s 2.5.19D and subject to the same regulatory regime as publication and use approvals.
[11]Energy Resources of Australia Ltd v Federal Taxation Commissioner (2003) 52 ATR 120, 128 [37] (Lindgren J); Gilbert v Western Australia (1962) 107 CLR 494, 516 (Dixon CJ, Kitto and Windeyer JJ); R v Clyne; Ex parte Harrap [1941] VLR 200, 201 (O'Bryan J).
[12]Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628, 635 (Barwick CJ, McTiernan and Taylor JJ).
[13]Project Blue Sky v ABA (1998) 194 CLR 355.
It was argued for TAB, in aid of construction of cl 18.2, that the transition provision does not contain the clear words that would be required if the provision operated to take away rights and liabilities that had accrued to a WSP holding a s 2.5.16A approval and thus, given the repeal of s 2.5.16A, the function and effect of cl 18.2 must only be to ensure that a WSP is not in breach of s 2.5.19B.[14] The principle that legislation changing the law should not be understood as applying retrospectively, absent a clear statement to the contrary, must be accepted[15] but it does not follow that cl 18.2 must have the restricted meaning for which TAB contends. Although the clause is not expressed in language capable of retrospective application, that does not mean that it cannot be construed as operating to preserve the position as it existed under the repealed legislation, as a basis for the replacement legislation having future operation on the rights or obligations preserved.[16] In my view, that is the function of cl 18.2 in the context of Division 5A and the clause is to be construed as operating to deem a s 2.5.16A approval to have been granted under s 2.5.19D for the purposes of the future application of that section.
[14]See Maxwell v Murphy (1956) 96 CLR 261, 267 (Dixon CJ); s 14(2)(e) of the Interpretation of Legislation Act 1984 (Vic)
[15]Maxwell v Murphy (1956) 96 CLR 261, 267 (Dixon CJ); Fisher v Hebburn Ltd (1960) 105 CLR 188, 194 (Fullagar J).
[16]Coleman v Shell Co of Australia Ltd (1943) 45 SR (NSW) 27, 31 (Jordon CJ, Davidson and Halse Rogers JJ agreeing); Robertson v City of Nunawading [1973] VR 819, 824 (Winneke CJ, Gowan and Starke JJ).
It was also argued for TAB that the requirements that s 2.5.19C prescribes for the making of an application and the time constraints on a controlling body for deciding an application are consistent with a construction that the terms of s 2.5.19D apply only to a publication and use approval actually granted under that section. This argument fails for the same reason that TAB’s construction fails to give proper meaning to the phrase “under section 2.5.19D”. The contention overlooks that a grant has already happened with the s 2.5.16A approval so that the relevant powers of a controlling body conferred by s 2.5.19D do not need to extend to the existence of the grant.
(b)Section 2.5.19D(7)(a) authorises the imposition of a fee as a condition of the s 2.5.16A approvals
It was submitted on behalf of TAB that the variation power in s 2.5.19D(7)(a) can be exercised only if the antecedent subject matter is in existence to vary and, it was argued, s 2.5.19D(7)(a) did not permit the variation of the s 2.5.16A approvals to impose fees as a condition of approval in the circumstance when a condition had not earlier been imposed. I do not accept that argument which involves, in my view, an artificially narrow reading of the power to vary that is not justified by the context.
The power conferred on controlling bodies in s 2.5.19D(7)(a) is the power to “vary the publication and use approval”. The natural and ordinary signification of the phrase is apt to include a variation by way of making an unconditional approval subject to a condition. The antecedent subject matter is the approval itself. It is not implicit from the context that some limitation on the ability of a controlling body to regulate an approval, once granted, was intended by that choice of phrase. The context indicates quite the opposite. It would be a strange result for the legislation to confer unfettered power in controlling bodies to impose any condition they “think [ ] fit”[17] at the time of approval and unfettered power “at any time”[18] to vary the conditions to which an approval is subject, but not confer power to make an unconditional approval conditional in the circumstance where Parliament has deliberately placed the responsibility for the regulation of race fields in the controlling bodies, including the conditions that must be complied with in order for a WSP not to commit an offence under s 2.5.19B. A purposive approach to construction requires a liberal and sensible construction of the provision. TAB’s construction would not promote the legislative intent discerned from the conferral of power in the widest terms to give the controlling bodies full autonomy over what restrictions should be placed “at any time” on the use and publication of race fields.
[17]Section 2.5.19D(4).
[18]Section 2.5.19D(7).
(c) Section 2.5.19D(7) requires the specification of an actual amount as the fee
It was submitted on behalf of TAB that the power in s 2.5.19D(7) was not a power that was wider than the initial power to impose conditions in s 2.5.19D(4). Section 2.5.19D(4) authorises a controlling body to impose a condition that the WSP “pay a fee or a series of fees of an amount or amounts and in the manner specified in the approval”. It was submitted that there is an express limitation imposed by the legislature on the nature of the fee so that a fee determined by a formula, as both RVL and GRL purported to impose as the condition, is not open to a controlling body. I agree with these submissions.
Although s 2.5.19D(7) does not, in words, limit the scope of the power conferred on controlling bodies to vary a publication and use approval, it is implicit that the amplitude of the power is limited by s 2.5.19D(4) in relation to making the payment of a fee a condition of approval. Although a controlling body is given the widest discretion in relation to what conditions the body may attach to a grant of approval, the nature of the fee which may be imposed on a WSP is regulated by the words in s 2.5.19D(4). The regulation is in the prescription of “a condition that the [WSP] pay a fee or a series of fees of an amount or amounts and in the manner specified”. The ambit of the power is governed by the statutory direction that the power be exercised in that form.[19]
[19]Project Blue Sky v ABA (1998) 194 CLR 355, 372 (Brennan CJ).
A consideration of the terms of s 2.5.19D(4) indicates that the legislature intended the power to impose a fee to be exercised in a particular way. The words “of an amount” describe what may be imposed as a fee and must be given meaning and effect.[20] The ordinary meaning and grammatical sense of the words convey that the controlling body must specify any fee payable as a condition of grant of approval as a quantified sum.[21] That signification is not displaced by the context in which s 2.5.19D(4) appears.[22] The statutory scheme in Division 5A operates on a fixed and determined fee liability, as once the payment of a fee has been made a condition it is an offence for the WSP to publish or use race fields unless the fee is paid[23] and the controlling body that granted the approval can sue the WSP for that fee.[24] That is to say, the condition is enforced by making it an offence for the WSP to publish or use a race field if payment is not made and by providing a statutory mechanism for the recovery of the fee as a debt. This explains the prescription that the fee be “of an amount”, by which the precise indebtedness of the WSP is ascertained, providing certainty for regulatory and compliance purposes.
[20]Project Blue Sky v ABA (1998) 194 CLR 355, 382 [71] (McHugh, Gummow, Kirby and Hayne JJ); The Commonwealth v Baume (1905) 2 CLR 405, 414 (Griffith CJ), 419 (O'Connor J); Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1, 12-13 (Mason CJ).
[21]Project Blue Sky v ABA (1998) 194 CLR 355, 384 [78] (McHugh, Gummow, Kirby and Hayne JJ); Compare Vardon v The Commonwealth (1943) 67 CLR 434 where the terms of the sub-regulation under consideration made it clear that the price could be fixed without specifying a money figure, for example see 443 (Latham CJ); King Gee Clothing Co Pty Ltd v The Commonwealth (1945) 71 CLR 184.
[22]Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) (2005) 220 CLR 592, 612 (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384.
[23]Section 2.5.19B(1)(b).
[24]Section 2.5.19D(5).
The context also bears out that the power under s 2.5.19D(7) should similarly be circumscribed in relation to fee conditions. It would not be consistent with, or promote the evident purpose of the prescription in, s 2.5.19D(4) to give s 2.5.19D(7) a wider operation in relation to fee conditions than the power conferred under s 2.5.19D(4).
The fees charged by RVL and GRV were not stipulated as quantified sums but as fees determinable by the application of a formula. In my view, the imposition of fees in that way was not in compliance with the authority conferred on the controlling bodies under s 2.5.19D(7), as limited by s 2.5.19D(4) in relation to a fee condition. Accordingly I conclude that s 2.5.19D(7) did not authorise RVL and GRV to impose fees determinable by the application of a formula. This conclusion is sufficient to hold that neither RVL or GRV validly exercised the variation power under s 2.5.19D(7) because neither body stipulated “an amount”, that is a quantified sum, as the fee payable.
(d) The fee conditions are legally uncertain
If, contrary to my conclusion, a controlling body need not stipulate a quantified sum as the fee payable, the question next arises as to whether the fee conditions are invalid for uncertainty, as TAB contended. “Uncertainty”, in this context, is not a matter of TAB establishing some ambiguity in expression of the fee condition.[25] “Uncertainty” is concerned with the manner of the exercise of power under s 2.5.19D.[26] If it is not necessary for a controlling body to specify an actual amount, then the controlling body must prescribe the means of calculating or ascertaining the amount. In my view, it is an implicit requirement for the valid exercise of power that an actual amount can be determined from the expression of the fee, if expressed other than as a quantified sum. In other words, as the fee condition creates the liability to pay an amount, there must be certainty about the amount which must be paid. The controlling bodies need to know whether there has been compliance and what they may sue for and the WSP needs to know what it must do to avoid committing an offence.[27] As the statutory scheme operates on an ascertained liability, the amount must be capable of being worked out if it is not specified as an actual amount and this necessarily means that its calculation should not require any exercise of judgment or discretionary element. The requirement of certainty, in my view, is an inherent condition of the exercise of power.
[25]King Gee Clothing Co Pty Ltd v The Commonwealth (1945) 71 CLR 184, 196 (Dixon J).
[26]King Gee Clothing Co Pty Ltd v the Commonwealth (1945) 71 CLR 184, 196 (Dixon J); Cann’s Pty Ltd v The Commonwealth (1946) 71 CLR 210; Vardon v The Commonwealth (1943) 67 CLR 434; Cf Pyneboard Pty Ltd v Trade Practices Commission (1982) 39 ALR 565; McCormack v Deputy Commissioner of Taxation (2001) 114 FCR 574; Conley v Commissioner of Tax (1988) 81 FCR 24; Telstra Corporation Ltd v Australian Competition Consumer Commissioner (No 2) (2007) 240 ALR 135; Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187.
[27]Television Corporation Ltd v The Commonwealth (1963) 109 CLR 59, 70 (Kitto J).
“Uncertainty” as a ground of vitiation was applied in a trilogy of cases[28] concerning exercises of power by the Prices Commissioner under regulation 23 of the National Security (Prices) Regulations to fix and declare the maximum price by which certain goods could be sold. The Prices Commissioner was able under the terms of the regulation to fix the maximum price as an actual money sum or by a formula by which the maximum price could be ascertained.[29] In each case, the exercise of power was held by the High Court to be invalid because the Prices Commissioner had prescribed a formula for calculating the maximum price that involved discretionary or subjective integers, which meant that the maximum price was not “fixed” because there was no certainty of result from the application of the formula. The basis of the decisions was that the nature of the power “to fix” the maximum price carried with it the obligation to specify a method of calculation by which a definite price was determinable without any discretionary element, whoever applied it. In King Gee Clothing Co Pty Ltd v Commonwealth[30] Rich J reasoned as follows:
[28]Vardon v The Commonwealth (1943) 67 CLR 434; King Gee Clothing Co Pty Ltd v the Commonwealth (1945) 71 CLR 184; Cann’s Pty Ltd v The Commonwealth (1946) 71 CLR 210.
[29]King Gee Clothing Co Pty Ltd v The Commonwealth (1945) 71 CLR 184; Cann’s Pty Ltd v The Commonwealth (1946) 71 CLR 210.
[30](1945) 71 CLR 184.
If a sum of money is not expressly specified as the price, then it is obviously necessary that the money sum forming the price should be ascertainable with certainty, and this means that the elements from which it is calculated must be definite. The powers given by reg. 23 (1A) cannot be duly exercised unless a definite criterion or standard is stated, or a process of calculation is prescribed proceeding from some certain basis and avoiding in its course all standards which are solely subjective. “It is not necessary in order to fix a price under reg. 23 to stipulate a sum of money, but if a sum of money is not stipulated, it is necessary for the due exercise of the powers conferred by the regulation that a definite standard or criterion should be stated whereby the price can be ascertained" (Vardon's Case (1943) 67 CLR 445, 450). [31]
[31]Ibid 189.
Dixon J likewise reasoned as follows:
A perusal of [reg 23(1A)] makes it quite clear that, when prices are fixed under the particular powers they confer, or, at all events, under many of them, amounts need not be named as prices. To that extent at least greater room is allowed for uncertainty of expression. Prices may be fixed on sliding scales; on a condition or conditions; on landed or other cost with the addition of a percentage or specified amount or both; or upon or according to any principle or condition specified by the Commissioner. The powers thus reposed in the Commissioner are very wide indeed. But, having regard to certain expressions used and to the nature of the duty to be imposed by the orders upon the subject, I think that there are limitations upon the kind of standards or criteria he may employ for building up the prices he fixes. They must, I think, be standards or criteria from which a price may be calculated. It is not enough if the price, or some element entering into its composition, can be obtained only by estimation or by the exercise of judgment or discretion, as, for instance, where apportionment or allocation is required.
…
By the nature of the duty imposed upon the subject I mean the obligation to keep the prices at which he sells below definite limits, limits which of necessity must be clearly ascertainable. The extremely heavy punishments to which, under the Black Marketing Act, a sale above those limits exposes the seller illustrates the reasons for authorising only maximum prices that are clearly ascertainable.
It needs no imagination to see that in drafting an order for the fixing of prices for an important trade many difficulties must be encountered and it would be impossible to avoid ambiguities and uncertainties which are bound to arise both from forms of expression and from the intricacies of the subject. But it is not to matters of that sort that I refer. They depend upon the meaning of the instrument and they must be resolved by construction and interpretation as in the case of other documents. They do not go to power. But it is another matter when the basis of the price, however clearly described, involves some matter which is not an ascertainable fact or figure, but a matter of estimate, assessment, discretionary allocation, or apportionment, resulting in the attribution of an amount or figure as a matter of judgment. When that is done no certain objective standard is prescribed; it is not a calculation and the result is not a price fixed or a fixed price. That, I think, means that the power has not been pursued and is not well exercised.[32]
By parity of reasoning, the imposition of fee conditions by reference to the formulas prescribed by RVL and GRV will not be valid exercises of power, unless the amounts which TAB is required to pay by way of fees can be calculated with certainty.
[32]Ibid 196-7.
(i) RVL decision
In my view, the fee condition imposed by RVL, if not vitiated because no amount was stated, would be void for uncertainty because the amount payable is not capable of precise quantification. The RVL decision had specified the fees payable to it in the following terms:
With effect from 1 December 2008 a condition shall be imposed on [TAB] to pay fees to RVL based on 10% of revenue derived from betting on Victorian thoroughbred racefields (exclusive of GST).
It is clear from the evidence that TAB’s revenue from its operations is derived from several sources and the determination of the fee payable will involve a number of integers. It is readily apparent that the application of some integers will involve matters of judgment, about which there may be legitimate differences of opinion between TAB and RVL.[33] TAB wrote to RVL on 18 December 2008 setting out “by way of illustration and without being exhaustive” a number of difficulties in calculating the fee payable. RVL responded by advising that it would provide TAB with an “economic contribution return form” which “should provide [TAB] with sufficient guidance to enable it to calculate the economic contribution amounts payable to RVL”. RVL specifically informed TAB that it preferred “not to be prescriptive in relation to the manner in which [TAB] is to treat certain matters in calculating its economic contributions”. TAB was told that if it had any specific queries at the time of completing its economic return forms it should contact RVL for assistance with answering such queries. RVL also informed TAB that it was “content for [TAB] to use the same accounting standards it would otherwise use to internally record its revenue and to meet its external reporting obligations”. The economic contribution return form prescribed as follows:
[33]King Gee Clothing Co Pty Ltd v The Commonwealth (1945) 71 CLR 184, 198 (Dixon J).
PART C – Calculation of Revenues Derived from Betting on Victorian Thoroughbred Racing CI Bets Taken on Victorian thoroughbred racing
in the reporting period
$
C2 Less Bets Paid to customers on Victorian thoroughbred
racing in the reporting period
$
C3 Plus
LessNet Gains from allowable Bets Back
Net Losses from allowable Bets Back
on Victorian thoroughbred racing for reporting period
$
C4
Plus
Other Revenues derived from betting on Victorian thoroughbred racing in the reporting period
$
C5 Equals Revenues Derived from betting on Victorian
thoroughbred racing for reporting period (incl GST)
$
C6
Please specify the types of revenues included in Other Revenues in C4 above:
……………………………………………………………………………………………………….
TAB responded with a further letter to RVL with further complaints about lack of guidance, noting specifically that the form did not address or provide any substantive guidance in answer to the specific queries TAB had raised with RVL in its letter of 18 December 2008. RVL then supplied clarification by further letter dated 1 April 2009. A consideration of the content of that letter indicates the discretionary elements involved in computing the fee payable, which are not matters of interpretation that reference to accounting standards may resolve for this purpose:
(a) unclaimed dividends – these relate to winning or refunded bets which remain unclaimed by the customer and are payable to TAB twelve months following the date of bet. TAB recognises the dividend as revenue when it receives payment. Although RVL “advised that it is willing to adopt [TAB’s] treatment of this revenue” for the calculation of the fee, TAB advised that it does not have any supporting information that could identify the amount of unclaimed dividends that relate to Victorian thoroughbred racing. RVL “noted that it would be willing to explore with [TAB] the options for a reasonable attribution of this revenue which relates to Victorian thoroughbred racing”;
(b)bad debts, error and customer claims – TAB was unsure about the treatment of bad debts from non-payment of bets and payment of adjustments resulting from operator error. RVL advised “that no adjustment should be made to gross revenue to reflect non-payment [of a bet] by a customer” but RVL advised that “it is willing to consider on a case by case basis an application by [TAB] for an adjustment to the economic contribution otherwise payable” where TAB makes an adjusting payment to a customer relating to a Victorian thoroughbred race;
(c)costs code/state/sports bets and timing for multi-leg bets – the evidence led on this point is that TAB offers bets encompassing more than a single contingency or event. It may be possible for a punter to bet on a product that involves race meetings in different states, such as three races from Melbourne and three races from Sydney, a product that involves race meetings held at different times, including potentially races held in different race fields reporting periods and a product that involves different race codes. Apportionment is necessary in relation to bets of that kind to determine what amount is to be taken into account for the purposes of calculating the fee. TAB sought clarification of the treatment of betting pools which do not relate exclusively to Victorian thoroughbred racing and where bets may relate to races which fall across reporting periods. RVL advised that “it would be receptive to the gross revenue being apportioned by the number of contingencies which relate to Victorian thoroughbred racing”;
(d)free bets – TAB was unsure about the treatment of free bets in determining gross revenue, explaining “that it is unable to track the application of any free bets which are added to its [customers’] accounts”. RVL advised that given TAB’s reporting difficulties in tracing any free bets, RVL is “willing to receive a proposal from [TAB] on how it should appropriately exclude free bets in determining gross revenue”.
These are not issues of construction and interpretation. As Dixon J observed in King Gee Clothing Co Pty Ltd v The Commonwealth:
It is not enough if the price, of some element entering into its composition, can be obtained only by estimation or by the exercise of judgment or discretion, as, for instance, where apportionment or allocation is required.[34]
It is not an answer that actual uncertainty ought to be capable of resolution between the parties or, failing resolution, adjudicated upon by a Court applying ordinary principles of construction and interpretation, as submitted by senior counsel for RVL.
[34]Ibid 197.
In my view, RVL has failed to express its fee condition in terms that fix a definite standard or criterion by which the amount of the fee can be ascertained with certainty and the failure goes to the exercise of power and, in my view, vitiates the exercise.
(ii) GRV decision
The gross profits fee condition imposed by GRV also lacks the certainty that the exercise of power requires.
The first GRV letter described the fees payable to it as follows:
The fee payable from 1 January 2009 until 30 June 2009 is 10% of the gross profits received by your organisation in connection with, or any contingency relating to, GRV greyhound races where gross profits is equal to:
· the bets taken (inclusive of GST) less bets paid net of bets back by your organisation; or
· where relevant, commissions, rebates and other revenue (inclusive of GST) generated on a betting exchange.
The third GRV letter restated the fee payable as described in the first GRV letter but with apparent clarification as follows:
The Racefields Publication and Use Fee payable from 1 January 2009 until 30 June 2009 is 10% of the gross profits received by [TAB] in connection with, any contingency relating to GRV greyhound races where gross profits is equal to the bets taken (inclusive of GST) less bets paid of net of bets back by TAB (Principal Basis).
In calculating gross profits for the purposes of this Amended and Restated approval letter, no other fees, costs or expenses incurred by TAB whether in connection with a GRV greyhound race or otherwise are to be deducted from the total amount (other than bets paid or, if applicable, any bets back).
The letter then sets out:
(a)What amounts are not to be deducted by TAB when determining the gross profits;
(b)How unclaimed dividends, fractions, jackpots and deferred dividends, free bets and moneys used to seed totaliser pools should be treated in calculating gross profits;
(c)How the phrase “in connection with any contingency relating to GRV greyhound races” is intended to capture gross profits where the result of a single wagering transaction depends on the combined outcome of a number of events based on different codes or locations.
The formula prescribed in the first GRV letter has a beguiling simplicity about it. The relevant integer is “gross profits” as defined. It provides a description of the items which are to make up “gross profits”. However, embedded in those items are the same individual revenue items which make up the “revenue” based fee applied by RVL. Thus the same considerations apply to this fee condition as to the fee condition imposed by RVL. Unclaimed dividends, free bets and profits from a single wagering transaction involving more than one code or location form part of gross profits. No direction is given about how to allocate or apportion unclaimed dividends and free bets in so far as they relate to Victorian greyhound races. That means that no definite amount is capable of being worked out under this formula. The inclusion of amounts in gross profits referrable to those items cannot be ascertained by an exact process of calculation because no apportionment mechanism is directed. In contrast, GRV has provided some apportionment mechanism to allocate profits from a single wagering transaction involving more than one code or location to Victorian greyhound races. However, the apportionment mechanism is expressed in terms that are vague and, in my view, unintelligible.[35] I doubt that the apportionment mechanism is sufficiently specified to take away the matters of estimation and discretion.
[35]Television Corporation Ltd v The Commonwealth 109 CLR 59, 69 (Kitto J)
Accordingly I conclude that GRV did not validly exercise its power by imposing a fee condition in the terms it expressed in the first GRV letter or as restated in the third GRV letter.
(e) The Turnover fee is not a valid fee condition
The second GRV letter gave TAB the option of an alternative fee payable expressed as follows:
GRV is willing to accept fees from [TAB] for the publication and use of its race fields which are calculated on the basis of 1.5% of gross turnover on GRV races (or contingencies relating to GRV races)
This option was subject to the following proviso, amongst others:
-unless determined otherwise by GRV in its absolute discretion, once the concerns raised by TAB Limited with the December Letter method of calculating the fee have been clarified and addressed, TAB Limited will pay the fee on the basis of the December Letter method, and a “true up” of any fees that would have been payable from 1 January 2009 pursuant to the December Letter method will be made.
These terms did not fix a fee that created a certain and definite liability, but one that is provisional only and even then the provisional liability is subject to GRV’s absolute exercise of discretion. The expression of the fee in these terms is not, in my view, a valid condition because there is no definitive liability.[36]
(f)There is no criterion that the fee must be a fair and reasonable economic
contribution from the relevant WSP
[36]Commissioner of Taxation v Stokes (1996) 72 FCR 160
It was argued on behalf of TAB that the fee must be an amount that is “a fair and reasonable economic contribution to the industry on which [TAB’s] businesses are based”. It was submitted that neither RVL nor GRV approached the determination of the fees they imposed on TAB on the basis that the fee was “fair and reasonable”. It was also submitted that the fees unfairly and unreasonably discriminate against TAB. The argument is based on the second reading speech of the Minister for Gambling in support of the Gambling Legislation Amendment (Problem Gambling and Other Measures) Bill which included the proposed Division 5A. The Minister stated as follows:
The legislation seeks to ensure that all wagering operators based outside Victoria make a fair and reasonable economic contribution back to the racing industry on which their businesses are based.
However, there is nothing in the text of Division 5A that makes it a requirement of the exercise of power that the fee imposed is a fair and reasonable economic contribution by the WSP. Moreover there is, in my view, no basis to be found in the words used in Division 5A for imputing that criterion.[37] The power, of course, must be exercised in good faith[38] but it is not in issue here that RVL and GRV acted in good faith in relation to the fees that they prescribed. Accordingly it is not necessary to consider whether the evidence bears out the proposition that the fees unfairly and unreasonably discriminate against TAB.
[37]Commissioner of Taxation v Hart (2004) 217 CLR 216 [47].
[38]Television Corporation Ltd v The Commonwealth 109 CLR 59, 69 (Kitto J); Commissioner of Taxation v Futuris Corporation Ltd (2008) 247 ALR 605.
(g)Retrospective component of the fee condition not authorised under Division 5A
It was also argued on behalf of TAB that RVL and GRV (if the third GRV letter constitutes the relevant decision) sought to vary the terms of the existing approvals so as to impose fees with retrospective operation and are thus invalid on this basis also.[39] The RVL decision, communicated by letter dated 4 December 2008, sought to vary the terms of the existing RVL approval “with effect from 1 December 2008”. The third GRV letter, sent on 8 April 2009, stated that “as and from 1 January 2009, a condition of [TAB’s] ongoing use and publication of the Race Fields will be the payment of a fee”. It was argued on behalf of RVL and GRV that the imposition of the fee conditions did not have retrospective operation but, rather, simply took account of revenue derived from 1 December 2008 and 1 January 2009 respectively for the purposes of calculating the fee payable. I do not accept that characterisation. Both notifications make it clear that retrospectivity is involved in that the approvals became subject to the fee conditions with effect as and from dates that predated the relevant decisions.[40]
[39]Australian Sugar Producers Association Limited v Australian Workers Union (1916) 23 CLR 58, 65-6 (Griffith CJ).
[40]Robertson v City of Nunawading [1973] VR 819, 824 (Winnede CJ, Gowans and Starke JJ).
This does not mean that the fee conditions are nullified completely. The retrospective component is severable if it is a straightforward matter to isolate that component and the fee conditions are not affected in meaning and operation by severing the invalid part.[41] In my view, it is possible here to sever the retrospective component so that the fee conditions can operate independently of the excess of power, with effect prospectively as and from when the conditions were imposed (if such conditions otherwise were valid exercises of power).[42]
[41]Harrington v Lowe (1996) 190 CLR 311, 328 (Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ).
[42]Perron Investments Pty Ltd v Deputy Commissioner of Taxation (WA) (1989) 90 ALR 1, 6 (Lockhart J), 15 (Burchett J).
(h) Denial of procedural fairness
TAB claimed that it was denied procedural fairness when RVL and GRV determined to impose the fees as a condition of approval without giving TAB an opportunity to be heard. Division 5A does not, in terms, give TAB a right to be heard before the controlling body makes a decision as to whether to impose a fee condition. However, the absence of a statutory basis for an obligation to consult does not mean that TAB did not have a right to be heard. The common law recognises a general duty to act fairly in the sense of according procedural fairness in the making of administrative decisions which affect rights, interests and legitimate expectations.[43] As the Court of Appeal in Byrne v Marles[44] observed:
Th[e] right [to procedural fairness] is subject to contrary statutory intention but authority is clear that an intention to exclude natural justice must be plainly evident in the words of the statute. Such an intention cannot be gleaned from “indirect references, uncertain inferences or equivocal considerations”. It requires a “clear manifestation” or “plain words of necessary intendment”, and it cannot be inferred from the presence in a statute of rights which are commensurate with only some of the rules of natural justice.[45] (footnotes omitted)
The scheme of Division 5A does not indicate an intention to exclude procedural fairness in relation to a variation of approval. Rather, the structure and operation of Division 5A provides for separate consideration by a controlling body not only of each application for approval but also the individual consideration as to whether, and if so what, conditions should apply to an approval, including any variation of an approval to add conditions. The conditions attaching to an approval are matters of discretion exercised by controlling bodies in relation to an individual approval holder.
[43]Kioa v West (1985) 159 CLR 550, 584 (Mason J).
[44](2008) 19 VR 612.
[45]Ibid 633 [74] (Nettle JA, Dodds-Streeton JA and Coghlan AJA agreeing).
RVL and GRV contended that the imposition of the fee conditions did not attract the requirement of procedural fairness as each had adopted a fees policy that they applied consistently to TAB and which did not require them to consider the individual circumstances of TAB before applying the policy. It is recognised that the formulation or adoption of a policy affecting a large group of persons does not generally carry with it a duty to afford those persons who may be affected by it the opportunity to be heard before its formulation.[46] In Kioa v Minister for Immigration Ethnic Affairs[47] Mason J stated:
[46]Bread Manufacturers of New South Wales v Evans (1980) 180 CLR 404, 416-17 (Gibbs CJ); Gardner v Dairy Industry of New South Wales [1977] 1 NSWLR 505; Harvey v Minister Administering the Water Management Act 2000 (2008) 160 LGERA 50.
[47](1985) 159 CLR 550.
[T]he duty does not attach to every decision of an administrative character. Many such decisions do not affect the rights, interests and expectations of the individual citizen in a direct and immediate way. Thus a decision to impose a rate or a decision to impose a general charge for services rendered to ratepayers, each of which indirectly affects the rights, interest or expectations of citizens generally does not attract this duty to act fairly. This is because the act or decision which attracts the duty is an act or decision:
“… which directly affects the person (or corporation) individually and not simply as a member of the public or a class of the public. An executive or administrative decision of the latter kind is truly a ‘policy’ or ‘political’ decision and is not subject to judicial review.”[48]
[48]Ibid 584.
But the adoption of a policy does not necessarily mean that the policy can be applied automatically without taking into account how the policy may affect an individual’s interests and giving the individual the opportunity to be heard.[49] In Kioa v Minister for Immigration Ethnic Affairs Brennan J stated:
If a power is apt to affect the interests of an individual in a way that is substantially different from the way in which it is apt to affect the interests of the public at large, the repository of the power will ordinarily be bound or entitled to have regard to the interest of the individual before he exercises the power. No doubt the matters to which the repository is bound or is entitled to have regard depend on the terms of the particular statute and, if there be no positive indications in its text, the subject-matter, scope and purpose of the statute must be looked at to determine whether the repository is bound or is entitled to have regard to individual interests. … When the repository is bound or is entitled to have regard to the interests of an individual, it may be presumed that observance of the principles of natural justice conditions the exercise of the power, for the legislature can be presumed to intend that an individual whose interests are to be regarded should be heard before the power is exercised.[50]
Here, Division 5A requires controlling bodies to give individual consideration to whether a WSP should be approved for the purposes of s 2.5.19B and, if so, on what conditions. In that circumstance, where the imposition of a fee condition on the individual WSP is a matter of discretion, it appears to me that the existence of the policies is not a reason to make a decision about the imposition of a fee without regard to its effect on the interests or circumstances of the individual WSP and affording the WSP the opportunity to be heard. That is not to say that the controlling bodies cannot be guided by the policy in their exercise of discretion[51] or that the policy should not be adopted with respect to TAB, but TAB should be given an adequate opportunity of presenting a case against its adoption. It is the nature of the power conferred on controlling bodies under s 2.5.19D that triggers the duty to afford procedural fairness.
[49]Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291, 292 (Gummow J); Blyth District Hospital Inc v The South Australian Health Commission (1988) 49 SASR 501, 509 (King CJ); Chumbairux v Minister for Immigration and Ethnic Affairs (1986) 74 ALR 480, 493 (Burchett J)
[50](1985) 159 CLR 550, 619.
[51]Chumbairux v Minister for Immigration and Ethnic Affairs (1986) 74 ALR 480, 492 (Burchett J).
It was submitted on behalf of RVL that the content of any obligation to afford procedural fairness was satisfied in the circumstances of the case in any event because TAB had been already heard on, and agreed to pay, a fee under the terms of the Economic Contribution Agreement. It was argued that RVL was not bound to give TAB any further opportunity to be heard unless RVL proposed to adopt and implement a decision based on information adverse to, but unknown to, TAB or a decision which was significantly adverse to TAB relative to the existing rights of the parties as embodied in the Economic Contribution Agreement. The correlative argument was put that the adoption and implementation of the fees policy were to TAB’s advantage, relative to the terms of the Economic Contribution Agreement. These arguments ignore the nature of the power being exercised. The nature of the power requires individual consideration. The RVL decision was not made with regard to the effect on the interests or circumstances of TAB, where the exercise of statutory power affected the interest of TAB not as a class, but as an individual approval holder. It is not to the point that TAB may be better off by the adoption of the new policy (as contended for on behalf of RVL) than if it remained bound by the terms of the Economic Contribution Agreement. It is not the fairness of the decision with which the principle is concerned but the fairness of the process adopted in making the decision,[52] which for the reasons I have expressed, I do not consider was properly observed by RVL.
[52]Kioa v West (1985) 159 CLR 550, 622 (Brennan J); Ruangrong v Minister for Immigration and Ethnic Affairs (1988) 14 ALD 773, 776 (Davies J).
This same reasoning is sufficient to dispose of the submission on behalf of GRV that the content of any obligation to afford procedural fairness was satisfied in the circumstances where it was in the public domain that there would be a new fees policy and TAB had “every opportunity of making whatever submission it wished”.
(i) RVL contract did not authorise the fee condition
RVL relied, in the alternative to s 2.5.19D as the source of power, on its entitlement under the terms of the Economic Contribution Agreement to vary the terms of the fee condition. The fee condition was expressed as follows:
[Y]ou agree to make the economic contributions and payments from 1 August 2008 to 31 July 2009 (calculated in accordance with the rates specified in item 1 within the payment of terms specified in item 2 and in accordance with the economic contributions policy specified in item 3 of the annexure to this document);
Item 1 prescribed the payment amount as the amount “[a]s determined by the economic contributions policy in item 3 … for so long as” two conditions were met. The payment period prescribed in item 2 was 1 August 2009 to 31 July 2009. Item 3 specified that for Parimutuel Operators (applicable to TAB), the contribution would be 3.0% of assessable turnover (or equivalent).
The two conditions in Item 1 reflected the so-called “Gentleman’s Agreement” which describes an arrangement in place between controlling bodies for thoroughbred, harness and greyhound racing in Australia under which the controlling body in each State and Territory received fees only from the totalisators that were licensed in their jurisdiction. The Economic Contribution Agreement provided that if the situation changed part-way through the approval period, a “pro-rata assessment will be made for the balance of the approval period”. The situation did change with effect from 1 September 2008 and under the terms of the Economic Contribution Agreement, an economic contribution was payable by TAB as specified in item 3 based on a pro rata assessment.
RVL argued that the Economic Contribution Agreement refers to a “target level” of contributions and contemplates the imposition of a fee “equivalent” to a fee based on assessable turnover which entitled RVL to impose a fee based on a method of calculation other than the 3.0% of assessable turnover in the event that the Gentleman’s Agreement came to an end. I do not accept that the terms of the agreement permitted RVL to substitute a different calculation method. The bargain that was struck by the parties was 3.0% of assessable turnover, not some differently calculated amount unilaterally determined by RVL. Any variation to that term could only be by a written agreement signed by all parties.[53] In my view, the new fee condition was not an authorised variation of the terms of the contract. Accordingly I reject the contention that RVL had the contractual right to impose the 10% revenue fee as a condition of approval.
[53]Clause 2.4 of the general terms and conditions.
E. Proposed orders
TAB is entitled to declaratory orders and relief. I will stand the matter over for a period of seven days to enable the plaintiff to prepare short minutes of orders reflecting my reasons and to hear the parties on the question of costs.
---
Appendix 1 – RVL Approval
Approval to public Victorian thoroughbred race fields under section 2.5.16A of the Gambling Regulation Act 2003 (Vic).
We refer to your application to publish Victorian thoroughbred race fields under section 2.5.16A of the Gambling Regulation Act 2003 (Vic) (“Act”).
This instrument records that the above named person or company (“Wagering Service Provider” or “you”) has agreed with Racing Victoria Limited (“RVL”) to publish race fields (as defined in the Act) only on the website … and otherwise in accordance with the Agreement RVL has, in consideration of you agreeing to be bound by and comply with the provisions of the Agreement, approved the publication of race fields by you under the Act but only on the website … and on the other terms of this Agreement until 31 July 2009.
The Agreement comprises the following documents:
(a) this Instrument of Agreement;
(b) the Economic Contribution Agreement and annexures (attached);
(c) the Deed of Disclosure and Assistance (attached);
(d) the General Terms and Conditions (attached).
…
In the event that section 2.5.16A of the Act is amended, repealed or replaced, RVL may at its discretion, by 7 days’ notice in writing to you revoke the approval and/or terminate the Agreement without any damages or other compensation being payable to you.
…
Please confirm your agreement to the terms and conditions of this Agreement …
The Economic Contribution Agreement provides, relevantly:
In granting you approval under section 2.5.16A of the Gambling Regulation Act 2003 (Vic) in respect of the publication of race fields (as defined in the Act) for thoroughbred horse races to be conducted in Victoria, RVL has taken into account a number of matters agreed by you in your application (recorded in the Instrument of Agreement), which include the following:
1.you agree to make the economic contributions and payments from 1 August 2008 to 31 July 2009 (calculated in accordance with the rates specified in item 1 within the payment terms specified in item 2 and in accordance with the economic contributions policy specified in item 3 of the annexure to this document);
…
Item 1 provides as follows:
1. Payment amount:
As determined by the economic contributions policy in item 3 below, for the licensed totalisators in all significant racing jurisdictions in Australia, for as long as the following conditions are met:
―These licensed totalisators continue to be a primary source of funding to the State/Territory thoroughbred racing industry/ies they service; and
―No product fee is levied on the Victorian licensed totalisator on the racing product of the State/Territory in which they are licensed,
no further economic contribution will be sought for the purposes of the Race Fields legislation as the net benefit to the Victorian thoroughbred racing industry from these arrangements already exceeds the target level of economic contribution.
For the avoidance of doubt, while these conditions are met, no amount will be payable by you under this agreement. If this situation changes part way through the approval period, then a pro-rata assessment will be made for the balance of the approval period.
2. Payment date(s): the payment period is:
1 August 2008 to 31 July 2009
Payment terms require payment to be made to RVL within 21 days after the end of the relevant period.
3. Economic contributions policy:
Target Level of Economic Contributions
Target levels of economic contributions, and associated credits, have been established for each market segment of wagering service providers to be used as a benchmark to evaluate each applicant’s proposed level and form of contribution. The target rates are contained in the following table.
Table A – Target Rates of Contribution
Market Segment of Wagering Service Provider
Target Level of Contribution
Bookmakers 1.0% of assessable turnover (or equivalent) Parimutuel Operators 3.0% of assessable turnover (or equivalent) Betting Exchanges 1.0% of assessable turnover (or equivalent) Assessable turnover means the aggregate of bets taken on Victorian thoroughbred racing, regardless of its source, reduced by allowable bets back to Victorian licensed or other approved wagering service providers. For clarity, bets taken from other wagering operators are included in assessable turnover.
Appendix 2 – RVL Decision
Approval To Publish Victorian Thoroughbred Race Fields
I refer to RVL’s approval for you to publish Victorian thoroughbred race fields for the period to 31 July 2009 (“Current Approval”) and to my letters of 22 October 2008 and 19 November 2008 in which I advised you of RVL’s review of its economic contribution policy.
RVL’s New Fees Policy
On 19 November 2008, the RVL Board endorsed a new fees policy by which the product fee to be charged to wagering service providers is to be based on:
(a) 10% of revenue derived from betting on Victorian thoroughbred race fields less GST (eg bets taken less bets paid);
(b) 15% of revenue derived from betting on Victorian thoroughbred race fields less GST for races conducted during the months of October and November reflecting the premium value of the Spring Racing Carnival; and
(c) no offset for contributions made in your local jurisdiction.
The Imposition of Product Fees on the Victorian Licensed Totalistators
RVL is aware that, on 1 September 2008, Racing NSW began to charge the Victorian licensed totalisator a product fee for the use of New South Wales thoroughbred race fields.
The terms of your Current Approval with RVL confer on RVL an express right to vary the economic contribution payable by you during the approval period in the event that a product fee is levied on the Victorian licensed totalisator. In addition to this contractual right, RVL also has the power under section 2.5.19D(7)(a) of the Gambling Regulation Act 2003 (Vic) (Act) to vary an approval, including a variation of the conditions to which an approval is subject. By reason of section 18.2 of the Act, your Current Approval is taken to be an approval under section 2.519D [sic] of the Act.
Variation to Current Approval
By reason of the above matters, RVL hereby gives notice of the following variation to your Current Approval:
With effect from 1 December 2008, a condition shall be imposed on TAB Limited to pay fees to RVL based on 10% of revenue derived from betting on Victorian thoroughbred race fields (exclusive of GST).
For the avoidance of doubt, RVL also exercises its contractual right to vary the Economic Contribution Agreement between TAB Limited and RVL as follows:
Item 1 of the Annexure to the Economic Contribution Agreement is amended to provide that “TAB Limited is required to pay fees to RVL based on 10% of revenue derived from betting on Victorian thoroughbred race fields (exclusive of GST).”
Item 2 of the Annexure to the Economic Contribution Agreement is amended to provide:
Payment Periods:
1 December 2008 to 31 January 2009
1 February 2009 to 31 March 2009
1 April 2009 to 31 May 20091 June 2009 to 31 July 2009
Where payment is due to RVL within 21 days following the end of each payment period.
Appendix 3 – GRV Approval
Racing and Gambling Acts (Amendment) Bill.
We write to inform you of the impact of the above Bill on your capacity to publish Victorian greyhound race fields once the Bill becomes law. We understand that the legislation does not impact on Tabcorp, however, we need to ensure that [TAB] (NSW), goes through the appropriate protocol.
BACKGROUND:
As you are probably aware, the Bill proposes to amend the Gambling Regulations Act 2003 (Vic) by inserting a new section 2.5.16A, which makes it an offence for a wagering service provider to publish Victorian greyhound race fields without the approval of Greyhound Racing Victoria (GRV).
The Bill has been passed by both Houses of the Victorian Parliament and is awaiting royal assent. The proposed new section 2.5.16A that creates this offence is expected to become law on or about 22nd November 2005.
INITIAL APPROVAL:
To avoid any unnecessary business disruption, GRV has decided to grant you an initial approval to publish Victorian greyhound race fields from the commencement of the new section 2.5.16A until 31st March 2006.
APPLICATIONS FOR APPROVAL:
If you wish to publish Victorian greyhound race fields after 31st March 2006, you will need to apply to GRV for approval to do so and be granted such approval.
We are currently establishing the processes and criteria by which we will assess applications for such approval, and will contact you once this process is complete. Guidelines for making such an application will be made available on our website at … when this process has been finalised.
Any application you make for such approval will be assessed in accordance with our guidelines and having regard to our criteria. Please do not assume, on the basis of our initial approval or anything else, that any such application will be successful.
Appendix 4 – First GRV Letter
FEES FOR THE PUBLICATION AND USE OF VICTORIAN GREYHOUND RACE FIELDS
The purpose of this letter is to make you aware of the changes Greyhound Racing Victoria (“GRV”) is making to its approval policies and conditions in relation to the publication and use of GRV race fields as a result of amendments to the Gambling Regulation Act 2003 (VIC) (“the Act”) which came into force on 4 September 2008.
Pursuant to section 2.5.19B of the Act, a wagering service provider (“WSP”), unless exempted under section 2.5.19B(2) of the Act, must not publish, use or otherwise make available a Victorian greyhound race field (“Race Fields”) in the course of business unless:
· the WSP has obtained approval from GRV; and
· the WSP complies with the conditions to which the approval is subject.
In accordance with section 2.5.19D(7) of the Act, GRV may vary the publication and use approval, including by varying any conditions to which the approval is subject, by written notice at any time. Further, GRV is expressly permitted by section 2.5.19D(4) of the Act to require a WSP to pay a fee or a series of fees as a condition of such approval.
GRV will continue to approve your organisation’s use and publication Race Fields on an interim basis until 30 June 2009, provided that your organisation complies with the terms of this letter and the “Conditions on Publication and Use of GRV Race Fields” attached to this letter (“Conditions”). The Conditions are subject to change on written notice to your organisation at any time and are in the process of being revised by GRV.
As and from 1 January 2009, a condition of your organisation’s ongoing use and publication of the Race Fields will be the payment of a fee. There will be no offset or reduction to the fees payable to GRV as a result of any payments your organisation may make to its local greyhound racing industry.
The fee payable from 1 January 2009 until 30 June 2009 is 10% of the gross profits received by your organisation in connection with, or any contingency relating to, GRV greyhound races where gross profits is equal to:
· the bets taken (inclusive of GST) less bets paid net of bets back by your organisation; or
· where relevant, commissions, rebates and other revenue (inclusive of GST) generated on a betting exchange.
This fee is payable monthly in arrears and is to have added to it the 10% GST. However, any gross losses accrued in a previous month can be subtracted from the next months’ gross profits. As at 1 January 2009, your organisation is deemed to have had zero gross losses on GRV races in the previous month.
The monthly fee (plus 10% GST) must be paid by your organisation to GRV within 10 days of the end of each month by direct deposit as follows:
……
At the time of remitting the above fee each month, you must also provide to GRV details of the fee and all relevant information used by your organisation to calculate the fee payable via email in the form specified in the Conditions as follows: …
GRV will provide you with a tax invoice within 3 business days of receipt of the fee.
The GRV board will be reviewing the Conditions including the fee prior to 30 June 2009 and will confirm by further letter if there are to be any changes to the Conditions or the fee payable as and from 1 July 2009.
If your organisation wishes to continue using or publishing the Race Fields as and from 1 July 2009, it will need to do the following:
· apply to GRV for approval in the prescribed form in the Gambling Regulation (Race Fields) Regulations 2008 (Vic) (“the Regulations”) within the prescribed times set out in the Regulations; and
· pursuant to section 2.5.19C(2)(c) of the Act, provide the additional information requested by GRV.
The prescribed application form and the additional information required to be submitted will be set out in the “Application to Use and Publish GRV Race Fields” (“Application”) which will be available at in February 2009. Please note that the Application (and any required additional information) may be changed at any time by GRV.
The Conditions and the terms of this letter are conditions on your approval pursuant to section 2.5.19D(4) of the Act to use and publish Race Fields on and from 1 January 2009.
Appendix 5 – Second GRV Letter
VARIATION TO APPROVAL TO USE AND PUBLISH VICTORIAN GREYHOUND RACE FIELDS
I refer to your letter dated 10 February 2009 in relation to the above matter and further conversation with myself and Robert Shaw.
Greyhound Racing Victoria (GRV) is aware of TAB Limited’s assertion that it is unable to properly calculate the fees that are required to be paid by TAB Limited pursuant to GRV’s letter dated 24 December 2008 (December letter).
The December Letter stated the method by which the fee is to be calculated (being, in summary, 10% of the gross profits made by TAB Limited in connection with GRV greyhound races). Other wagering service providers have not indicated any difficulty in calculating the fee in the manner specified in the December Letter.
We understand however in further discussions with you that you are seeking clarification on matters such as fractions and also commissions paid.
GRV is of the view that the requirement for wagering service providers to pay a fee for the use and publication of GRV’s race fields, and the method of calculating the fee specified in the December Letter, are not unlawful and are within the statutory powers conferred upon GRV under the Gambling Regulation Act 2003 (Vic) (“the Act”). Further, GRV is expressly permitted by the Act to impose “any conditions” on the approval it sees fit, including the imposition of fees “in the manner specified in the approval”. Notwithstanding the above, and without prejudice to GRV’s rights, GRV is willing to accept fees from TAB Limited for the publication and use of its race fields which are calculated on the basis of 1.5% of gross turnover on GRV races (or contingencies relating to GRV races) (Turnover Fee), provided that:
·subject to the terms of this letter and the Act, the variation to the method of calculating the fee outlined in this letter will apply until the end of the current approval period (30 June 2009);
·TAB Limited must provide GRV with written reasons as to its concerns with the December Letter method of calculating the fee by 6 March 2009, and the parties will then meet to resolve the arrangements which will apply from 1 July 2009 onwards;
·TAB Limited provides GRV with all records and information required by it to confirm the method of calculating the fee pursuant to the Turnover Fee method and uses best endeavours to provide GRV with all relevant information required to calculate the fee pursuant to the December Letter method;
·unless otherwise agreed, if the Turnover Fee method of calculating the fee is later determined by a court to be unlawful, but GRV’s requested fee and method of calculation set out in the December Letter is not determined to be unlawful, [TAB] will pay all fees based upon the method specified in the December Letter (backdated to 1 January 2009). TAB Limited will receive a credit for any fees calculated and paid using the Turnover Fee method; and
·unless determined otherwise by GRV in its absolute discretion, once the concerns raised by TAB Limited with the December Letter method of calculating the fee have been clarified and addressed, TAB Limited will pay the fee on the basis of the December Letter method, and a “true up” of any fees that would have been payable from 1 January 2009 pursuant to the December Letter method will be made.
Except as set out above, all terms and conditions on TAB Limited’s approval to use and publish GRV race fields set out in the December Letter remain in full force and effect. Nothing in this letter waives or restricts any rights GRV may have under the Act or at law.
The terms of this letter shall constitute a variation to TAB Limited’s publication and use approval (as specified in the December Letter) pursuant to section 2.4.19D(7) of the Act and is effective on and from the date of this letter.
We look forward to receiving written reasons as to TAB Limited’s concerns with the December Letter method of calculating the fee so that TAB and GRV can resolve these matters as quickly as possible and true up the amount outstanding.
Appendix 6 – Third GRV Letter
Amended and Restated Approval for Publication and use of Victorian Greyhound Race Fields
From in or about 2005 until the commencement of the Gambling Legislation Amendment (Problem Gambling and Other Measures) Act 2007 on 4 September 2008 (Amending Act), TAB Limited used Victorian greyhound race fields under the Gambling Regulations Act 2003. From 4 September 2008 use of Victorian greyhound race fields is governed by section 2.5.19B of the Gambling Regulation Act 2003 (Vic) (the Act).
Pursuant to section 2.5.19B of the Gambling Regulation Act 2003 (Vic) (‘the Act’), a wagering service provide (‘WSP’), unless exempted under section 2.5.19B(2) of the Act, must not publish, use or otherwise make available a Victorian greyhound race field (‘Race Fields’) in the course of business unless:
·the WSP has obtained approval from GRV; and
·the WSP complies with the conditions to which the approval is subject.
In accordance with section 2.5.19D(7) of the Act, GRV may vary the publication and use approval, including by varying any conditions to which the approval is subject, by written notice at any time. Further, GRV is expressly permitted by section 2.5.19D(4) of the Act to require a WSP to pay a fee or a series of fees as a condition of such approval.
GRV will continue to approve your organisation’s use and publication of Race Fields on an interim basis until 30 June 2009, provided that your organisation complies with the terms of this letter and the ‘Conditions on Publication and Use of GRV Race Fields’ attached to this letter (‘Conditions’). The Conditions are subject to change on written notice to your organisation at any time and are in the process of being revised by GRV.
As and from 1 January 2009, a condition of your organisation’s ongoing use and publication of the Race Fields will be the payment of a fee (Racefields Publication and Use Fee). There will be no offset or reduction to the fees payable to GRV for publication and use of race fields as a result of any payments your organisation may make to its local greyhound racing industry.
The Racefields Publication and Use Fee payable from 1 January 2009 until 30 June 2009 is 10% of the gross profits received by TAB Limited in connection with, any contingency relating to GRV greyhound races where gross profits is equal to the bets taken (inclusive of GST) less bets paid net of bets back by TAB (Principal Basis).
In calculating gross profits for the purposes of this Amended and Restated approval letter, no other fees, costs or expenses incurred by TAB whether in connection with a GRV greyhound race or otherwise are to be deducted from the total amount (other than the bets paid or, if applicable, any bets back). Without limiting the foregoing, for the avoidance of doubt the following are not to be deducted by TAB when determining the gross profits pursuant to the above paragraph:
(a)any betting tax paid by TAB in NSW in connection with any contingency relating to GRV greyhound races;
(b)any product fees or other types of fees paid by TAB to any NSW racing industry bodies, whether under the “Racing Industry Agreement” or otherwise;
(c)any contributions made by TAB to any racing industry bodies or third parties including, without limitation, by way of sponsorship, interest free loans, donations or otherwise;
(d)any payments, commissions or other consideration paid by TAB to any third parties, including (without limitation):
(I)for the provision of any data;
(II)commissions deducted from wagering turnover as payment for TAB agents, pubs and clubs;
(III)fees paid from wagering turnover to third party providers of wagering services such as FOXTEL, TwoWayTV and any future licensed secondary operators of TAB’s online betting websites;
(e)any pooling fees paid to other wagering operators on Victorian greyhound races;
(f)any bad debts, shortfalls in agent or outlet receipts and similar matters;
(g)any rebates paid to premium customers, including those based on turnover;
(h)any costs or expenses relating to customer promotions, loyalty programs, rewards or premium customer services or support;
(i)any fees paid to the NSW racing industry as a wagering incentive under the Racing Distribution Agreement or otherwise;
(j)any costs, fees or expenses relating to the provision of audio, vision or data; or
(k)any payments made by TAB to seed a pool in relation to Victorian greyhound races.
By way of clarification:
(a)unclaimed dividends should be deemed paid in accordance with TAB’s current practice, however, in the event that such dividends are unclaimed after 12 months and committed to TAB’s revenue, such amounts are not added as further gross profits for the purposes of this approval;
(b)fractions are to be counted towards gross profits if retained by TAB;
(c)where dividends are jackpotted or deferred to other races, such amounts are not to be counted again as gross profits if GRV has already received a fee in relation to the amounts the subject of the original contingency being jackpotted;
(d)any free bets given away as part of customer promotions are still to be considered bets paid by punters and will form part of gross profits; and
(e)if TAB decides to seed a pool (i.e. add to the pool with its own funds) then this is included in the bets taken by TAB.
For the avoidance of doubt, the phrase “in connection with any contingency relating to GRV greyhound races” is intended to capture those gross profits that are made by TAB whether it has used a GRV race field in traditional win and place bet offerings, in quinella, trifecta and quadrella bets (and other variations), or where:
(a)the result of a single wagering transaction depends upon the combined outcome of a number of events (which may include, without limitation, GRV greyhound races, interstate greyhound races, thoroughbred or harness races in or outside Victoria, or other racing, sporting or other contingencies offered by TAB, whether such contingencies occur in or outside Australia); and
(b)a GRV greyhound race or contingency is at least one of the events or contingencies on which the wagering transaction depends.
Where a GRV race is one contingency in a number of events or contingencies of a wagering transaction eg across different codes of racing and different States, the allocation of gross profits to each Codes or State should be also applied on the same basis of the agreed allocations used for turnover. We appreciate that normally TABCORP allocates turnover to the 1st leg of an event however given new bet types such as pick 6 could be subject to new agreed turnover arrangements with Vic Racing approval. In this instance GRV would expect that gross profits were allocated on the same basis as turnovers.
For example, where a wagering transaction has the following contingencies: 1) GRV greyhound race; 2) NSW thoroughbred race; and 3) Victorian harness race, and it was agreed by TABCORP and Vic Racing to allocate turnovers evenly then one third of the total value of the bets taken minus bets paid (net of bets back if applicable) shall be deemed to be gross profits attributable to the GRV race contingency for the purposes of this approval letter.
For the further avoidance of doubt, in this Amended and Restated Approval:
(a)“bets taken” means the total amount of wagering money taken by TAB from punters on the “backers” side of the wagering transaction in relation to the applicable contingencies;
(b)“bets paid” means the total amount of wagering money required to be paid by TAB to punters as winnings in relation to bets taken following the conclusion of the relevant wagering transaction (whether or not the winnings are in fact collected by the punters);
(c)“net of bets back” means the offset of any amounts made by TAB on the “backers” side of wagering transactions on the totalisator operated in Victoria pursuant to the Act (Victorian Totalisator) (the “bets back”) with any returns TAB receives from the Victorian Totalisator for such bets (the “bet back returns”) against the gross profits. For example, where the amounts paid by TAB for bets back are greater than the bet back returns received by TAB from the Victorian Totalistator, such difference may be subtracted from the gross profits (subject to sub‑clause (d) below); and
(d)a bet back (after any bet back return) may only be subtracted from gross profits under this approval letter where:
(I)such bet back is genuinely placed by TAB for the purpose of reducing its risk on the layers side of a wagering transaction relating to a GRV greyhound race contingency;
(II)such bet is in relation to the same contingency that TAB has already accepted on the layers side of the wagering transaction as referred to in sub-clause (I) above.
Alternative Calculation of Fee
Without prejudice to GRV’s argument that the Principal Basis is a valid and effectual method of calculating the Racefields Publication and Use Fee, GRV is prepared to accept Racefields Publication Use Fees from TAB Limited calculated on the basis of 1.5% of gross turnover of GRV races (or configurences relating to GRV races) (Turnover Basis) for the period from 1 January 2009 up to and including 30 June 2009 (Initial Period)on the following conditions:
1.TAB Limited is to provide GRV with all records and information required by it to confirm the method of calculating the Racefields Publication and Use Fee pursuant to the Turnover basis method and use its best endeavours to provide GRV with all relevant information required to calculate the fee pursuant to the Principal Basis;
2.unless otherwise agreed, if the Principal Basis of calculating the fee is later determined by a court to be the proper basis of calculating the Racefields Publication and Use Fee, TAB Limited will pay the Racefields Publication and Use Fees based on the Principal Basis (backdated to 1 January 2009). TAB Limited will receive a credit for any fees calculated and paid using the Turnover Basis method; and
3.unless determined otherwise by GRV in its absolute discretion, once the concerns raised by TAB Limited regarding the Principal Basis of calculating the Racefields Publication and Use Fee have been clarified and addressed, TAB Limited will pay the fee on the Principal Basis, and a “true up” of any fees that would have been payable from 1 January 2009 pursuant to the Principal Basis will be made.
The Racefields Publication and Use Fee is payable monthly in arrears and is to have added to it the 10% GST. However, any gross losses accrued in a previous month can be subtracted from the next month’s gross profits. As at 1 January 2009, your organisation is deemed to have had zero gross losses on GRV races in the previous month.
The monthly fee (plus 10% GST) must be paid by your organisation to GRV within 10 days of the end of each month by direct deposit as follows:
…
unless otherwise specified by GRV in writing. Please specify your organisation’s name in the narration so that GRV may reconcile the payments made.
At the time of remitting the above fee each month, you must also provide to GRV details of the fee and all relevant information used by your organisation to calculate the fee payable via email in the form specified in the Conditions as follows: …
GRV will provide you with a tax invoice within 3 business days of receipt of the fee.
The GRV board will be reviewing the Conditions including the Racefields Publication and Use Fee prior to 30 June 2009 and will confirm by further letter if there are to be any changes to the Conditions or the Racefields Publication and Use Fee payable as and from 1 July 2009.
If [TAB] wishes to continue using or publishing the Race Fields as and from 1 July 2009, it will need to do the following:
·apply to GRV for approval in the prescribed form in the Gambling Regulation (Race Fields) Regulations 2008 (Vic) (‘the Regulations’) within the prescribed times set out in the Regulations; and
·pursuant to section 2.5.19C(2)(c) of the Act, provide the additional information requested by GRV.
Use of Racefields after 1 July 2009
The prescribed application form and the additional information required to be submitted are set out in the ‘Application to Use and Publish GRV Race Fields’ (‘Application’) which is Schedule 1 to the Gambling Regulation (Racefields) Regulations 2008. Please note that the Application (and any required additional information) may be changed at any time by GRV.
The Conditions and the terms of this Amended and Restated approval are conditions imposed pursuant to section 2.5.19D(4) of the Act to use and publish Race Fields on and from 1 January 2009.
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