Tabcorp Holdings Limited v State of Victoria

[2015] HCATrans 288

Replacement Transcript

[2015] HCATrans 288

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M81 of 2015

B e t w e e n -

TABCORP HOLDINGS LIMITED (ACN 063 780 709)

Appellant

and

STATE OF VICTORIA

Respondent

FRENCH CJ
KIEFEL J
BELL J
KEANE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 10 NOVEMBER 2015, AT 10.14 AM

Copyright in the High Court of Australia

MR A.C. ARCHIBALD, QC:   May it please the Court, in the first appeal I appear with my learned friends, MR J.C. SHEAHAN, QC, MR P.G. LIONDAS and MR B.K. HOLMES, for Tabcorp.  (instructed by Herbert Smith Freehills)

MS W.A. HARRIS, QC:   Your Honour, if it please the Court, I appear in each matter for the State of Victoria with my learned friends, MR R.G. CRAIG and MR K.A. LOXLEY.  (instructed by Johnson Winter & Slattery)

MR N.J. YOUNG, QC:   In the second appeal, I appear with my learned friends, MR P.D. CRUTCHFIELD, QC and MR N.P. DE YOUNG, for the respondent.  (instructed by Clayton Utz Lawyers)

FRENCH CJ:   Mr Archibald, I gather that it is agreed between the parties that the appeal to be heard consecutively and there has been an agreed timetable?

MR ARCHIBALD:   That is so.  It is agreed between the parties that the first appeal should finish today.  It is also agreed that were some point of statutory construction to arise in the course of the Tatts appeal which affected Tabcorp, we might seek leave to be heard upon that matter at the conclusion of the Tatts appeal.

FRENCH CJ:   I would have thought that the first appeal would be shorter than the second.

MR ARCHIBALD:   It should be.  There is a quite a bit of ground to cover and we need to introduce the Court to the statute.

FRENCH CJ:   Yes, very well.

MR ARCHIBALD:   Yes, thank you.  The relevant statute is the Gambling Regulation Act 2003 as it stood at August 2012. August 2012 is the time of the expiry of the 1994 licences and the time of the grant of the licences which we contend are new licences.

That legislation is under tab 9 in the agreed statutory materials bundle.  The scheme of the Act was to impose a general prohibition upon gambling and then to carve out exceptions where licences were granted in respect of particular gambling activities.  The two forms of gambling activities with which this appeal is concerned are wagering and gaming and, therefore, not concerned, for example, with lotteries and the like.

As originally enacted by the 2003 Act, authorised gaming was regulated under Chapter 3, authorised wagering was regulated under Chapter 4 and the particular form of gaming called keno was regulated under Chapter 6.  This appeal is primarily concerned with Chapter 4.  Although the chapter is generally designated as being concerned with wagering, in fact under that chapter there were granted both a wagering licence and a gaming licence.

The provisions for application and grant of those licences, the wagering licence and the gaming licence, were provided for in Part 3 of Chapter 4.  The authority granted by those licences was essentially as follows – the wagering licence authorised what was called or defined as wagering, essentially parimutuel betting, totalisator betting, and approved betting competitions which include sports betting and the like. 

The gaming licence authorised ‑ those activities authorised by the gaming operator’s licence granted under Chapter 3, so it called in the authority conferred by the Chapter 3 licence.  The gaming licence also allowed the conduct of keno gaming under Chapter 6.  So the gaming licence brought into Chapter 4 essentially the Chapter 3 gaming activities and the Chapter 6 gaming activities.  Those licences led to the activities under them being authorised and rendered lawful, that was provided for in respect of wagering by section 4.2.1 of the Act, page 718 of the statutory bundle, in respect of the gaming activities authorised by the gaming operator’s licence in section 3.4.2, page 535, and keno activities, section 6.2.1, page 807.

Tabcorp held licences under the 1994 legislation and those licences were deemed under the 2003 legislation to be licences granted under Part 3 of Chapter 4.  That mechanism was achieved in Schedule 7 of the Act in clause 4.2(1) and (2).  We do not have that in the Act as at 2012 in the bundle but it is in the bundle under tab 8, the Act as at 2003 at page 413.

FRENCH CJ: The entitlement provision which is at the centre of this was originally to be found at section 21 - is that right – of the 1994 Act?

MR ARCHIBALD: Section 21 in the 1994 Act re‑enacted in no materially different terms in the 2003 Act. I am coming to that now.

FRENCH CJ:   Yes.

MR ARCHIBALD:   The provision is 4.3.12.  It is at page 728, under tab 9.  Subsection (1) provides for the terminal payment effectively at the expiry of the previous licences and payable on the grant of new licences.  The payment one sees from 4.3.14(1) at page 730 was to:

be made not later than 7 days after the commencement of the new licences.

The amount of the payment is established in 4.3.12(1).  It is the lesser of two amounts, one amount being:

the premium payment paid by the new licensee –

so the cash inflow coming from the new licences.  The other amount is –

an amount equal to the licence value of the former licences -

The licence value of the former licences is calculated in accordance with the formula in 4.3.13.  The formula generates a figure which falls within the range of 85 per cent up to 115 per cent of the amount originally paid by Tabcorp for its licences.  That follows from the elements of the formula set out at page 728, explained in the succeeding provisions.

The circumstances in which and the reason for the inclusion in the legislation of the terminal payment provision are of some importance in our contention.  The reasons for the insertion of the provision have nothing to do with the regulation of gambling activities ‑ ‑ ‑

FRENCH CJ:   This is all to do with avoiding amortisation of the price, is it not?

MR ARCHIBALD:   Yes, the section is in the 2003 Act and its predecessor was in the 1994 Act because of the circumstances attending the privatisation of the previous State‑owned Totalisator Agency Board.  The evidence showed that the government was advised that if the licence value did not need to be amortised then the primary offering to the investing public would be the more attractive.  If you amortise the licences the annual profits are sharply reduced here, on the evidence, from about $63 million a year down to less than $30 million and that amortisation could be avoided if there were to be a terminal payment at the end of the licence period. 

This section reflects that circumstance.  The section was enacted, the offering occurred, the prospectus showed non‑amortisation of the licences and, in consequence, it is to be inferred from the evidence that the float price was much enhanced by that circumstance.  The float proceeds were then - an amount equivalent to the float proceeds then constituted the licence fee which the floated company paid to the government.

So one can see the role of the terminal payment provision and its objective do not indicate any requirement that the new licences upon the issue of which the terminal payment is to be made have any necessary source in the precise part of the legislation which was the foundation of the expiring licences.  Insofar as the purpose of the terminal payment provision is concerned, a non‑specific construction of the expression “new licences” would promote the purpose of the legislation because the purpose was to provide such assurance of the terminal repayment as would allow non‑amortisation of the licences and a non‑specific construction of “new licences” enhances the likelihood of the terminal repayment occurring and, therefore, supports the conclusion that amortisation is not required.

The specific construction makes the provision the more fragile, makes it more likely that over the years changes will be made.  The later licences which are current will be provided for under different parts of the legislation and the terminal payment provision would not be engaged.

FRENCH CJ:   Is there any difference at all between 21 and 4.3.12?

MR ARCHIBALD: There is one difference which is immaterial. In section 21 there was a reference to what was called the “initial licences”. By 2003, those licences had been granted, reference to them was unnecessary and that was dropped out from the 2003 legislation. The terminal payment provision in the 1994 legislation, section 21, is found under tab 2 of the bundle at page 83 to 84. One observes in parenthesis at the outset of the subsection, the reference to “initial licences”.

In April 2008, the State announced a decision to move to a revised licensing regime for wagering and gaming on the expiry of the existing licences.  The announced changes were enacted in two stages.  First, there were amendments in 2008.  By those amendments there was inserted into Chapter 4 a new Part 3A dealing with wagering and a new Chapter 6A dealing with keno gaming.  The second phase of the legislative provisions occurred in 2009.  That legislation inserted a new Part 4A into Chapter 3. 

FRENCH CJ:   But the inconvenient provision, 4.3.4A, that came in in 2008?

MR ARCHIBALD:   Yes, that was part of the insertion into 2008 of Chapter 3A, I will come to explain that, and alongside that there were some changes within Chapter 3 – within Part 3 and that was one of them, yes.  Speaking generally, these amendments provided for essentially the same activities to be authorised under the new regime as were authorised under the old regime.  There were provisions in the amending legislation to provide for an assured, seamless transition from the one to the other.

There were two sets of provisions that were concerned with these arrangements.  Under the first set of provisions, activities under the new authorisations were not to commence until the expiry of the existing licences had occurred.  So, for example, the new wagering and betting licence was to come into operation on the expiry of the Chapter 3 licences and finds that in 4.3A.8(2) at page 754.  To similar effect, in respect of the new gambling arrangements were section 3.4A.1(1)(c) at page 653 and likewise with keno, 6A.3.8(2) page 839.  That was the first set.  So, the new does not come into operation until the expiry of the old.  The second dealt with the converse.  The existing licensing regimes were not to continue beyond the expiry of the current licences but were to continue to apply up to that point.

This is where 4.3.4A comes in.  Section 4.3.4A is at 723.  That dealt with the Chapter 4 licences.  There was a similar provision in Chapter 3, 3.4.3 at page 536.  The function and object of those provisions was twofold, in our submission.  We are concerned most centrally of course with 4.3.4A.  The first was to provide the assurance that there would not be an overlap by the existing licence regime continuing beyond the point of expiry of the then current licences.  The second was to preserve the continued practical operation of the existing regime until that point.

That, we say, is the function and the objective of 4.3.4A.  It did not have as its objective the elimination of the terminal payment arrangements as they applied to the Tabcorp licences.  It was not a purpose, not objective; it was not a targeting provision calculated to render nugatory those provisions. 

Now, as to the expression “new licences” in section 4.3.12 – the same will apply in due course to section 21 of the 1994 Act but focusing on 4.3.12 – we contend that the expression means statutory instruments not previously existing, the substantive operation of which is to authorise wagering and gaming activities. That, we say, is the natural and ordinary meaning of the composite expression and it applies therefore both to licences granted under Part 3 of Chapter 4 and licences which authorise substantially the same activities but are granted outside Part 3.

FRENCH CJ:   That encompasses new kinds of licences subject to that constraint.

MR ARCHIBALD:   Yes, provided that they are substantially similar, so they are cognate substantive provisions performing the same function essentially but, as it happens, for whatever eccentricity of the style of a parliamentary draftsperson or formatting of legislation it falls outside Part 3, which we say is of no consequence for the purposes of the function of and in particular the purpose of the terminal provision. 

That construction, in our contention, does give effect first to the natural and ordinary meaning of the expression.  Second, it is consistent with the text and context of the provision.  Third, it promotes the purpose of the provision, and fourth, it gives to all of the provisions, all the relevant provisions, especially 4.3.12 and 4.3.4A, an harmonious operation.  It gives them both work to do and gives them work that is achieved within a compatible environment without true conflict.

Fifth, we say our construction avoids 4.3.12 being rendered redundant, wholly redundant; effectively a repeal.  That is the consequence of the construction found by the Court of Appeal.  Our construction avoids that, gives the section useful and appropriate work to do.  Sixth, our construction also avoids Tabcorp being deprived of the valuable termination payment arrangements and the manifestly unjust result which would otherwise follow.

The trial judge expressly found that the result was “manifestly unfair and unreasonable”.  That is trial judge judgment paragraph 131 at page 355 of the appeal book, lines 12 to 13.  So we say our construction is the correct construction on the first four of those considerations but in the event that there were to be another available construction by reason of the fifth and sixth considerations - redundancy and unfairness - our construction should be adopted against the alternative construction.

FRENCH CJ:   Do you put a purposive argument by reference to the amortisation?

MR ARCHIBALD:   We include that as part of it, yes, for the reason I gave earlier, essentially for the reason I gave earlier.  The non‑specific construction gives to the terminal – or engages the terminal payment provision in a broader set of circumstances than would the specific construction.  The more robust the terminal payment provision is, the more likely it is to be engaged in due course, the more it supports the non‑amortisation of the licence fee on the float, and it was plainly a very valuable right.

From the presence of that provision, the float attracted a larger inflow of funds than would otherwise have occurred and therefore the licence fee was itself enhanced by that circumstance, the link being existent between the two and the State received more funds on the licence fee than would otherwise have been the case.

We make these specific oral submissions about the expression “new licences”.  The expression is not defined.  As to the word “licence”, we submit it has its ordinary meaning, namely, that it is an authority which has the effect of making lawful that which would otherwise be unlawful.  In the context of the section and the provisions, both of Chapter 3 and Chapter 3A, licences has the meaning which refers to licences under Chapter 3 and licences substantially similar thereto, namely, in our contention Chapter 3A licences.  That was the context in which the expression was found in 2012.

In the Tatts Case, the Court of Appeal held that the natural meaning of the expression there under consideration in respect of the contract issues, “new gaming operator’s licence”, meant to the ordinary, reasonable business person a new licence, the same as the gaming operator’s licence or a substantially similar licence.  We submit so it should be concluded mutatis mutandis here. 

The section we are looking at was generated from a commercial transaction.  It should be read in a commercial way.  We do not submit that it would not be read the way in which we contend for, were it not a provision borne in a commercial context but the presence of that commercial ingredient strengthens, in our submission, the conclusion that should be reached in respect of it.

The conclusion of the Court of Appeal in the Tatts Case as to that meaning of the cognate expression is found at judgment paragraph 146, page 715 in the Tatts appeal book, line 45 to 716, line 11.  That is the word “licence”.  As to the word “new”, we submit that it is not a mere synonym for “further” or “subsequent”.

FRENCH CJ:   In other words, it is not only temporal.

MR ARCHIBALD:   It is not only temporal.  It includes a temporal meaning.  It will capture a sequential relationship in point of time between licences of the same species.  That is the work that a word such as “further” or “subsequent” will do.  That is the limit of such a word but “new” has a broader reach.  A new licence is simply a licence not previously existing.  It therefore captures a further licence in the sense that I have referred to, i.e. a later licence of the same species as already is known.  But it will also capture the first instance of a licence of a kind not previously subsisting, a new species of licence but substantially similar to the previously known species.

So the word “new” both emphasises and is configured to accommodate the non‑specific meaning that we would describe to “licence” by itself.  The two work, perhaps synergistically, but at the very least harmoniously to entrench the non‑specific meaning for which we contend.  The trial judge was wrong, with respect, to express the view that “new” had a purely temporal significance.  That was his conclusion at trial judgment paragraph 80, page 339.

The limiting integer therefore of the composite expression, “new licences” is the sameness or substantial similarity of the activities authorised by those licences.  The limiting integer is not the particular part of the Act under which the licences happen to be granted.

KEANE J:   Does the extent of the licensed activities bear upon this notion of substantial similarity?

MR ARCHIBALD:   It does.  Under the notice of contention in this appeal, the State contends that the Part 3A licences were not substantially similar.  The particular degree need not be argued but, so long as they are, then they are performing essentially the same function.  The thesis upon which the terminal payment provision was grounded, in our contention, was that at the expiry of the old licences there should be a terminal payment.  In that sense, the existence of new licences really is of no consequence and their precise character is of no consequence.  They need of course to be effectively the subsequent licences which take over from the expiring licences.

KIEFEL J:   For the notice of contention point, do you intend to take us to the primary judge’s findings with respect to the new breed of licences?

MR ARCHIBALD:   I expect that will be so.  I am going to ask Mr Sheahan to argue the contention point.  If he is not going to do that, he will inform the Court at the outset of the argument.  So that the essential work which the phrase “on the grant of new licences” is doing is really only to provide a point of time at which the terminal payment is to be made.  It is not the circumstance, in our contention, that the precise character of those subsequent licences bears upon whether that terminal payment should be made.  Nothing in the provenance of the clause requires or addresses the precise character of the subsequent licences.  “On the grant of new licences” is substantively a cash flow provision. 

There is to be a terminal payment made on the expiry of the old licences.  The predicate is that there will be subsequent licences taking over back to back on the expiry of the initial licences.  The predicate is that there will be a premium payment made in respect of those licences.  Payment is to be made within seven days of the commencement of those new licences.  The premium payment will be a cash inflow occurring at the inception of the new licences and that cash inflow will provide the funding needed by the State to make the terminal payment provision.

The Court will have noticed that the amount of the terminal payment provision is the lesser of two items, the value of the old licences or the premium payment under the new, so there will never be a cash shortfall for the State.  In the event that the premium amounts are lower than the amount paid for the initial licence, then it will be the premium payment which constitutes the amount of the terminal payment and the State will never be out of pocket.

On the evidence, the State here got in, on the new licences – I think the figure is of the order of $1½ billion.  So it got in more than twice the amount of the licence value.  The licence value is shown on the formula to be $686 million.  It is less than the premium payments and so the amount of the terminal payment here was $686 million, now with substantial amounts accruing in relation to interest.

But it is these features attending the terminal payment provision which indelibly indicate, in our submission, that no trigger depends upon the particular location within legislation from time to time in which these licensing provisions are to be found.

Of course, prior to 2008, the only licences to which the terminal payment provision could apply were Chapter 3 licences.  No other licences were then catered for.  There was no other species of wagering and gaming licence and one could not – to put it sensibly – ask the question, to what other licences does the terminal payment provision apply?

But the meaning of an ongoing statutory provision is not constrained by the particular subject matter to which it applies at any particular moment of time.  Meaning – that is to say connotation – is fixed but denotation may change over time according to the species of licence here that are provided for by the legislation.  This point is one that was made in the Chubb Case, to which the trial judge referred at paragraph 84, page 341 of the appeal book.  The point is made in Chandler, on our list, [2001] 1 WLR 1296 at paragraph 27 and in this Court, the Lake Macquarie Shire Council Case (1970) 123 CLR 327 at page 331 in the reasons of Sir Garfield Barwick at point 2 to point 7 on the page, using a 10 point scale.

Here, the provision we are concerned with is not only an ongoing provision but a provision which would speak for the first time 18 years after its original enactment in the 1994 Act and would speak for, let us say, the third time for it was capable of multiple iterations originally.  The third time would be 54 years on.  So, it speaks only occasionally and at points of time very remote from the point of enactment.

The likelihood that different forms of licence would emerge over, say, half a century and be located at that point for whatever reason in parts of the regulatory legislation differing from the 2003 legislation or the 1994 legislation must be taken to be very high in this dynamic and closely regulated industry.  There could be no reason, in our contention, to ascribe to Parliament an intention that whether the terminal payment provisions were to be engaged, say, decades on depended upon the then current legislation providing for licences in exactly the same part as the part in which the licences 50 years ago were to be found.

The meaning for which we contend simply tracks the current statutory form of wagering and gaming licences regardless, if one likes, of the particular part of the Act in which they appear, whether they are in the same part or a different part of the same chapter, or in a different chapter.  The substantive criterion is whether the subject matter of the licence is concerned with wagering or gaming in the same or a substantially similar way as the original licences.  No significance should be attached to the particular location within the statute which is likely a matter of style of drafting or legislative accident. 

KEANE J:   But, Mr Archibald, quite apart from where the licences or the source of the licences found in the statute, you say there is no difference between a licence that is semi‑exclusive, that confers a – together creates a duopoly, there is no difference in substance between that and one, an authority which is fractured in the many, many thousands?

MR ARCHIBALD:   This is really, I think, part of the contention point.  So far as the wagering and betting licences ‑ ‑ ‑

KEANE J:   I understand that but I suppose I am really seeking a bit of help about your description of the new licence or your acceptance that the new licence must be substantially the same.  Now, yes, it is the same in the sense that it creates a right to gamble where otherwise there would be no right, but is there not a difference of substance between the right to gamble which is held by two people – two persons in all of Victoria and a right to gamble which is shared amongst some tens of thousands?

MR ARCHIBALD:   Those who gamble, of course, are the users of the gambling opportunities ‑ ‑ ‑

KEANE J:   Or those who provide gambling opportunities to users.

MR ARCHIBALD:   Those who provide, of course, there is a difference between whether it is two or 22 or 2002, but nothing turns, in our submission, upon that circumstance for the engagement of the terminal payment provision for it is essentially a payment that recognises the expiry of the existing – the previous licences, the existing licences, recognises the circumstances of the payment of the licence fee and looks to the occasion for repayment provided there is a premium payment inflow coming from the new licensing regime, whatever its structure, then the funding element that may be of interest to the State is satisfied, and if the collocation of payments by the 2000 generates the substantial fund, then that will provide the lower band or the lower level in respect of which the terminal payment provisions are engaged, albeit the lesser amount.

But if one is looking to the substantive activity that was the subject of the original licences and one finds activity of that kind addressed by the new licensing regime, whether the layers that are utilised to allow the gambling public to engage in their activity is really of no substantive consequence.  We say in any event here, looking at the matter materially, there is no substantive difference between the old and the new and that is the argument that will be developed in due course on the notice of contention. 

Can I then make some submissions based on the drafting elements of Part 3 of Chapter 4 of the 2003 legislation?  First, one observes that the expression “new licences” in 4.3.12 is not qualified by limiting words such as “under this part”.  One does not find those words which, were they present, would constrain the operation of the terminal payment provision.

But, by way of contrast, where such a limitation is to be imposed elsewhere in Part 3 limiting words to that effect are by a consistent drafting pattern expressly inserted.  One sees this, for example, in the very definitions of “wagering licence” and “gaming licence”.  Their definitions are in section 1.3 at pages 479 as to “gambling licence”, and 501 as to “wagering licence”.  Those licences are defined as being the licences of that name granted under Part 3 of Chapter 4.  So they build into the definition the limitation of the part.

GORDON J:   Does that argument hold true given the definition of “licensee” in 4.1.2?

MR ARCHIBALD:   Yes, it does because that reference is a dependent reference picking up the concept of licence which gives rise to the existence of the licensee.  So where one has the reference to “licensee” in various sections of Part 3, the reference is to the person who is the holder of the particular licence, in those circumstances a licence granted under Part 3.

GORDON J:   That definition is a definition just for Chapter 4.

MR ARCHIBALD:   Yes, that is, that is. 

GORDON J:   Does that not tend against the construction that it is non‑specific in the way you suggest?

MR ARCHIBALD:   No, with respect.  One only encounters the expression for purposes of 4.3.12 where one has the expression “new licensee” and there the expression plainly means, in our contention, the person who is the holder of the new licences, new licences being construed non‑specifically.  But the examples to which I am referring were first the definitions of the licences themselves; second, in section 4.3.33(3) in the legislation as enacted before the 2008 amendments – that section is found at page 408 under tab 8 in the bundle.  The expression is “the grant of another licence under this Part” and in section 4.2.1 at page 718, “a licence . . . granted under this Chapter”.

That provision, importantly perhaps, unchanged by the 2008 and 2009 amendments, so before those amendments it denoted only Part 3 licences, after the amendments it denoted both Part 3 licences and Part 3A licences without requiring amendment.  Other uses of this expression or expressions by express limiting words are listed by the trial judge in paragraph 70(6) of his Honour’s reasons at page 336 of the appeal book.

So the proposition is, whereas in section 4.3.12 that drafting technique was not adopted, it should be inferred that no limitation should be inferred to require that the licence be a licence granted under the section.  The proposition that your Honour Justice Gordon put to me was dealt with by the trial judge at paragraph 82(3) of his Honour’s reasons at page 340 of the appeal book where his Honour accepted the submission I put to your Honour.

The second point we wish to make in relation to the drafting technique found under Part 3 is this.  Where the reference is to be made only to subsequent licences granted under Part 3, the expression “new licences” is not used but different language is used signifying that different usage.  Section 4.3.4A is a good example of that.  Section 4.3.4A is at page 723.  It provides in its second limb that Part 3:

does not authorise the grant of any further wagering licence or gaming licence -

(a) it uses the defined expressions, and (b) it uses the concept of a further licence.  Exemplifying the difference we put between “further” and “new”, one finds ‑ ‑ ‑

BELL J:   The courts below saw the purpose of 4.3.4A(1) as being to ensure there could never be a trigger for the terminal payment.  What other purpose is there for that provision?

MR ARCHIBALD:   I will come to deal with 4.3.4A in detail later, but in immediate answer to your Honour’s question, the purpose of 4.3.4A was:  one, to prevent overlap, as I put; two, to cut back to a single iteration the operation of 4.3.12 to allow it to apply in respect of the 1994 licences but not other licences.  So it precluded the multiple iteration operation of 4.3.12, but it did not expunge or seek to expunge the operation of 4.3.12 in respect of the 1994 licences.

It affirmatively continues the operation of Part 3 in relation to the 1994 licences, that is, the first limb of the section.  So it has its function and it has its non‑overlap function.  It is harmonious with 4.3.12 on the footing that 4.3.12 is cut back to the Tabcorp licences and no other.  So, in relation to the drafting technique where subsequent licences of the same species are intended or language apposite to that circumstance is used - 4.3.4A is the first, 4.3.33 at page 408 is another example, another licence under this part, not a new licence under this part - and so on.

The next drafting element to note is this.  Where in Part 3 in respect of a particular topic reference is to be made to Part 3 licences only, the first mention uses the defined expressions, second and subsequent mentions use shorthand expressions such as “the licences”, referring back to the first mention.  This can be seen, for example in 4.3.8, the grant provision.  The first reference on the topic of grant is in 4.3.8(1):

the Governor in Council may grant . . . 

(a)a wagering licence; and

(b)a gaming licence . . . 

(2)      The Governor in Council must not grant the licences –

If one drops down, for example, to 4.3.32 at page 736, the new topic is cancellation:

(1)The Commission . . . may apply to the Supreme Court for cancellation of the wagering licence and the gaming licence.

(2)On an application under subsection (1), the Supreme Court may cancel the licences ‑

So these second and subsequent references are dependent references.  The definite article is employed to signify the reference back to the first mention in the defined sense and the pattern is established.

Division 3 involves a new and separate topic to other topics dealt with in Part 3.  As we have submitted, in truth the provision has nothing to do with regulation of gambling.  It is concerned to deal with the termination payment borne of the circumstances of the privatisation.  When one looks to Division 3, the first mention of the new topic is found in 4.3.12 and there is no use of the defined expressions “wagering licence” and “gaming licence”.

One comes straight to “on the grant of new licences”.  So, in our contention, one sees that in Division 3 the subject matter being dealt with consistently with the drafting technique is something other than Part 3 licences in the sense of wagering licences and gaming licences as defined.  The topic is engaged by licences understood in the non‑specific sense.  The language is “on the grant of new licences” not the defined expression.  There is not a use of the definite article so it is not a dependent reference back to some anterior reference to licences of the defined kind.  It is a fresh freestanding, indeed forward‑looking reference which is not tied to the narrowness of the defined expressions.

FRENCH CJ:   So you say the confined application of the part under 4.3.4A engages with the licence’s lasting force.

MR ARCHIBALD:   It engages with the 1994 licences – sorry, there are two things.  There are two limbs to 4.3.4A.  Your Honour the Chief Justice was, perhaps, referring to the first limb.

FRENCH CJ:   Yes, I was.

MR ARCHIBALD:   Yes.  That is referring to Part 3 licences using the defined expressions.  The second limb, the so‑called negative limb, does not authorise the grant of any further wagering licence or gaming licence, uses the defined expression, does not use ‑ ‑ ‑

FRENCH CJ:   One sees the term, “the holder of the licences last in force”.  The confined application deriving from 4.3.4A directs you to the wagering licence and gaming licence issued on ‑ ‑ ‑

MR ARCHIBALD:   Yes.

FRENCH CJ:   Yes.

MR ARCHIBALD:   Yes, but the peculiarity of the result engendered by the Court of Appeal’s construction is that the court says that “new licences” in 4.3.12(1) has the same meaning as ‑ ‑ ‑

FRENCH CJ:   I understand that.

MR ARCHIBALD:   ‑ ‑ ‑ any further wagering licence.

FRENCH CJ:   I am just looking at how 4.3.4A works with, on your argument.

MR ARCHIBALD:   The different wording bespeaks different meanings, yes.  Then, if one comes to the reasoning of the Court of Appeal, the court recognised explicitly that the construction that it adopted had the effect of rendering redundant section 4.3.12, that is to say, it obliterated the operation of that section not only in later iterations that it might otherwise have had, but obliterated it even in relation to the 1994 licences.  The court expressed that view at paragraph 24, page 423 of the appeal book.  The first sentence acknowledged that the construction deprived 4.3.12 of “operative effect”.  In the next sentence there was an acknowledgement:

that to construe the expression in that fashion denudes Tabcorp’s right to payment under s 4.3.12 of practical utility.

Then the court gave the sole reason for that conclusion, the sole reason that caused it to abstain from avoiding redundancy and accepting the Tabcorp argument.  The reason was said to be that the Court agreed with the trial judge that the precise definition of “gaming licence” in section 1.3, when read in the context of the clear terms of the other sections to which we have referred, leaves no room for an alternative, broader interpretation of “new licences” in that context.

We have explained in paragraphs 28 to 30 of our written submissions as to why that is an ill‑founded line of reasoning.  The reasoning is predicated upon the presence in the Tabcorp section of a defined phrase, namely, “gaming licence” and the presence of that defined phrase having such force as to preclude the adoption of the non‑specific meaning.  That may have been sound reasoning in relation to the Tatts provision, which is reflected in paragraph 53 of the court’s reasoning in the Tatts Case ‑ I do not have the page reference at the moment ‑ but the transposition between the two is unsound for the reasons we have explained and which I will not labour.  But that was the sole reason upon which the court founded its conclusion and that reason is, in our submission, unsound.

There is a corollary to that error, which is to be found at the outset of paragraph 25 of the court’s reasons.  What the court was doing in the second part of paragraph 24 and the first part of paragraph 25 was to adopt and adapt the language which it had used at paragraph 53 in its reasons in the Tatts decision.  I now have the page, 689.  Part of paragraph 53 reflects the wording expressed in paragraph 24 of the Tabcorp judgment, but there are also words in paragraph 25 which have been imported from paragraph 53 of the Tatts judgment.  In paragraph 53 of the Tatts judgment, the court said, at line 13 on page 689:

it is not a matter of reading in words which are not there.  The words are there.

In paragraph 25 of the Tabcorp judgment, the court said, at line 17, on Page 423:

it is not a matter of reading in words which are not there.

The court did not include the further sentence from paragraph 53 that:

The words are there.

But what the court did, in fact, having said it was not a matter of reading in words which are not there, to read in those words, to do exactly what it said ought not be done.  The court continued:

As we read Chapter 4 . . . the words ‘under this Part’ are necessarily implicit ‑ ‑ ‑

So it read them in but on the predicate that they were necessarily implicit.  The court said they:

are necessarily implicit in s 4.3.12 for the reasons already stated ‑ ‑ ‑

BELL J:   I think, in that regard, the Court was also referring back to the steps in the reasoning identified in paragraph 23 as I read the judgment.

MR ARCHIBALD:   Yes, we agree.

BELL J:   Now, in that regard, can I just inquire, to the extent that those steps include consideration of the reference to new licences in 4.3.9(1), do I understand your argument depends on the absence of the definite article, that is how you deal with that part of the Court of Appeal’s reasoning?

MR ARCHIBALD:   There is a bit more to it, your Honour.  Where that expression is used, it comes in actually in 4.3.9(2) – where it is used, the definite article signifies a reference back and when you go back you see the limitation.  The original reference is in 4.3.8 where the defined expression is used.  So, it is that extra dimension, but, yes – but if one tracks through the subparagraphs of paragraph 23 of the Court’s judgment, apart from (5) dealing with the new licences, none of that reasoning cuts across the contention which we advance.

The point at which one reaches the departure is in subparagraph (8) of paragraph 23, which I will need to come to in some detail, but that is the only reason, ultimately, that would support what the Court said was the necessary implication.  The last step in paragraph 23 of the judgment, subparagraph (8), is itself unsound at least for the fundamental reason that it is entirely circular.  What it does is to assume that it would be the case that the expression “new licences” would only apply to licences granted under 4.3.8, in any event.  The Court advances no reason why that is the case, the Court simply assumes it to be the case and the reasoning in that provision is, in our submission, circular and not supportive of the necessary implication that the Court saw.

GORDON J:   It may be a bit Delphic but is that not the position that flows from the definition of “licensee” in the second last line of 4.3.12 because licensee for the purpose of this chapter under 4.1.2 means:

the holder of the wagering licence and the gaming licence –

and so do you not read it that the fact that the premium payment paid by the new licensee must be a reference to something granted under either 4.3.5 or 4.3.8?

MR ARCHIBALD:   No, in our submission.  Just as “new licences” is not defined, the composite expression, so the composite expression “the new licensee” in 4.3.12(1) is not defined but the natural and proper reading of the expression “the new licensee” in 4.3.12(1) is that it is a dependent reference.  It is a reference back to the first reference in that division on the new topic of terminal payments.  That first reference “new licences” is not constrained to a licence under Part 3.  The separate word “licensee” is defined in the way your Honour indicates, the composite expression, and in particular its use in 4.3.12(1) does not convey the limitations of the separate defined expression “licensee”.

Can I deal further with the reasoning under paragraph 23(8) of the Court?  On our contention, no construction conundrum between 4.3.12 on the one hand and 4.3.4A on the other arises.  The negative limb of which we have spoken, the second limb, has the effect that there can be no further Part 3 licences after the 1994 licences.  That is straightforward.

The first limb, the positive limb, has the effect that 4.3.12 continues to apply to the 1994 licences, and in turn 4.3.12 itself for its own part still operates of its own force at the time of the expiry of the 1994 licences as it would have operated absent 4.3.4A.  Nothing has changed except the potentiality for multiple iterations of 4.3.12.  That is the work which 4.3.4A is doing, does it effectively, uncontroversially, but it was no part of the work of 4.3.4A additionally to expunge the terminal payment arrangement in respect of the 1994 licences.

That exemplies the contradiction that is generated by the court’s construction of these two sections.  On the court’s construction, on the one hand, 4.3.4A is preserving and continuing the operation of 4.3.12, and on the other hand it is destroying the operation of 4.3.12.  That contradiction, in our submission, telegraphs the unsustainability of the conclusion which the court reached.

KIEFEL J:   Unless one deduces that there is an intention to remove the entitlement in 4.3.12.

MR ARCHIBALD:   Yes, but one, where does one find it; two, if that was the intention why not do it ‑ ‑ ‑

KIEFEL J:   Directly.

MR ARCHIBALD:   ‑ ‑ ‑ directly, explicitly and easily.

KIEFEL J:   Well, there might be reasons for that, but do you contend though that one can deduce from 4.3.12(1) an intention always to refund the initial licence fee?

MR ARCHIBALD:   Not inexorably, not inexorably.

KIEFEL J:   It is dependent upon the circumstance on the grant of new licence, always dependent.

MR ARCHIBALD:   Yes, but the disentitling circumstances would need to be unusual.  As we have submitted, if you go back to 1994 and the objective that was sought to be achieved by this provision, if not certainty then near certainty of payment.

KIEFEL J:   That is what I am wondering.  How much can one draw from the initial purpose towards an intention to refund?

MR ARCHIBALD:   Well, at least that for, as we have put it – I should repeat it – the more fragile the prospect of actual repayment, the less underpinning for the non‑amortisation.  There was no reason to render that provision fragile as at the time of its conception and the language does not betray any element that would have the ultimate operation of the provision turn on minutiae of the licences themselves, the new licences, nor the particular location within legislation that provided for those licences.

So our first submission as to these two sections is they work together.  Of course it cuts back 4.3.12 to the one iteration, but that is accepted.  They work, one can say, harmoniously in light of that.  There is not really a need for reconciliation by reason of violent contradiction between the two of them.  There is not that circumstance.  But if reconciliation, using that expression, is required, it resides in the limitation of the operation of 4.3.12 to the 1994 licences rather than depriving that section of any operation at all.

FRENCH CJ:   Could you remind me, did the extrinsic materials say anything about – that is, the second reading speech and so forth – say anything about an intention to extinguish the entitlement or a purpose of extinguishing the entitlement?

MR ARCHIBALD:   No.  We do have some extrinsic material.  It is at page 309 of the appeal book.  It was allowed into evidence.  It is part of the budget papers for 2008/2009.  One gleans that from 306.  At 309, line 19, the budget papers read:

The government does not intend to alter or amend the provisions in the Gambling Regulation Act 2003 that deal specifically with the end of licence arrangements for –

I leave out Tatts –

TABCORP.

So there was not an intention ‑ ‑ ‑

KEANE J:   Well, what about if you read from line 10:

the government announced a new regulatory model . . . The main changes include . . . 

After considering the end of licence arrangements . . . the government has formed the view that neither Tatts Group nor TABCORP will be entitled to compensation after the expiration of their current licences.

MR ARCHIBALD:   Yes, but not by reason of amendment of the end of licence arrangements.  The government presumably held a view on the basis of the unchanged provisions that compensation would not emerge.  We say it was wrong in that view.  But it was not claiming that there was to be no compensation entitlement because these provisions were being amended.  Nothing within 4.3.4A for itself conveys any targeting element.  Nothing is pointed to in respect of 4.3.4A which would promote the satisfactory implementation of the new licensing regime by expunging the terminal payment.

The absence of overlap achieved by the sets of provisions that I described allowed the free and satisfactory implementation of the new regime – seamless, as I put it.  The continuing existence of the terminal payment entitlement did not impair the efficacy or attainability of the new licensing regime.  The terminal payment provision, as I have submitted, was really nothing to do with the actual regulation of the gambling activities, the regulatory regimes, either of them.  It was an independent provision dropped in to that part of the legislation.

FRENCH CJ:   The materials you just took us to were budget papers.  There is no second reading speech material associated with the 2008 amendment?

MR ARCHIBALD:   I will need to check – certainly nothing that threw light for either argument before the court, I think, is the answer.

FRENCH CJ:   In other words, no stated purpose of the amendment before the Parliament.

MR ARCHIBALD:   No, nothing.

KIEFEL J:   You have earlier relied upon reading 4.3.4A – or the Court of Appeal having read that provision with 4.3.12 in a way which denies the efficacy of 4.3.12.  But is not one view of it that that is exactly what was intended, to remove the circumstance upon which the entitlement is constructed?

MR ARCHIBALD:   No.  What it did do was remove the opportunity for further Part 3 licences to be granted.

KIEFEL J:   It could be addressed directly, on one view, to the words “on the grant of new licences” and it is removing that circumstance upon which the entitlement in subsection (1) depends.

MR ARCHIBALD:   Only if that is what “on the grant of new licences” did in any event which, in our submission, it did not.  The work ‑ ‑ ‑

KIEFEL J:   There is no outright entitlement.

MR ARCHIBALD:   No, no.  But if “on the grant of new licences” before 4.3.4A had a non‑specific meaning, whatever its denotation to that point of time might have been, it was capable of applying to Chapter 4, Part 3A licences.

KIEFEL J:   Yes.

MR ARCHIBALD:   Nothing in 4.3.4A impairs that operation in 4.3.12.  It does not alter the meaning, does not narrow the meaning of “on the grant of new licences”.  The work which 4.3.4A seeks to do is satisfactorily achieved by denying the possibility of the further grant of Part 3 licences.  It is only, if in any event, “new licences” in 4.3.12 was confined to 4.3.8 licences that the first limb of 4.3.4A would have that effect.

KIEFEL J:   But then one has to read 4.3.4A in the context of the new regime of licences as well.

MR ARCHIBALD:   Exactly, but 4.3.4A is not needed to cause 4.3.12 not to operate if it does not operate on its true meaning in respect of Part 3A licences, in any event.  It was feasible administratively without 4.3.4A for there simply to be no further Part 3 licences issued and the only licences thereafter issued would be Part 3A licences.  If 4.3.12 did not operate in respect of 4.3.4A licences, then there would be no terminal payment achieved in those circumstances.

Section 4.3.4A does not advance the inapplicability of 4.3.12 to Part 3A licences.  All it does is curb the operation of 4.3.8 so there are no additional Part 3 licences and that achieves the objective of 4.3.4A which is an anti‑overlap provision, not a terminal payment expunging provision.  That is the work it does.  There is nothing, in our submission, within the statute, in the context, certainly not in the extrinsic materials, to support the view that what was being done by Parliament was a sophisticated oblique way of eliminating what would otherwise have been a terminal payment entitlement of Tabcorp.

FRENCH CJ:   One looks to construction with the aid of references to purpose, and I look at section 35 of the Interpretation of Legislation Act to that effect, and it may be of some significance to know what Parliament was told.  It is all very well for the Executive to have certain intentions ‑ ‑ ‑

MR ARCHIBALD:   Yes, indeed.

FRENCH CJ:   ‑ ‑ ‑ but if we know what Parliament was told we know there is a basis upon which to infer a legislative purpose which could then inform construction in accordance with section 35.  All that we know of what Parliament was told was a statement about the government’s intentions or views reflected in those budget papers, is that right?

MR ARCHIBALD:   Yes, that is so.

FRENCH CJ:   And what is their connection with the introduction of the legislation?  Do we know about that?

MR ARCHIBALD:   No, we do not, we do not.  It is the only straw in the wind ‑ ‑ ‑

FRENCH CJ:   I would have thought that a second reading speech would be fairly fundamental in an area like this where there is, as you say, an oblique drafting device used.

MR ARCHIBALD:   Yes.  Perhaps the parties should provide it to the Court but I am confident that it is silent.  So one has to keep in mind in respect of 4.3.4A the positive limb as well as the negative limb; the positive limb goes out of its way to say that the part applies, i.e. continues to apply to the 1994 licences and therefore including the operation of 4.3.12. 

That provision, of course, is ill‑founded in its assumption if the fact is that “on the grant of new licences” applies only to licences granted under 4.3.8 because it will have no further operation.  It cannot apply.  It is a contradiction.  If “on the grant of new licences” had a specific meaning prior to the 2008 amendments, the foundations of the positive limb of 4.3.4A are ill‑directed. 

They do not have any work to do, they themselves.  It is unsound and one should not lightly, in our submission, proceed upon the footing that the foundation of the first limb, the positive limb of 4.3.4A, is unsound.  The peculiarity borne of this construction of the court is that it would engage the terminal payment obligation, in respect of a licence authorising very different gambling activities, if it happened to be found within Part 3.

Conversely, it would preclude the operation of the terminal payment in respect of a licence that was identical with a Part 3 licence, a 4.3.8 licence, but happened to be located in a different part of Chapter 4.  It produces an erratic outcome which turns upon matters of no substance, an improbable intention of Parliament that payment of what turns out to be $686 million, turns upon drafting style in formulating legislation decades after the section is enacted.  It would be a classic triumph of form over substance.

The provisions that we find in Part 3A could well and satisfactorily have been drafted as additional divisions of Part 3.  We know they are not but there would be no difference in operation, no difficulty in implementation, had the provisions been styled as further divisions under Part 3, rather than provisions in a separate part and, of course, a further Part 3 licence could differ very significantly from an antecedent Part 3 licence.

The term of the licence can differ, 4.3.9(1), page 727, but the conditions can be imposed and the conditions could differ in large part.  Here for Tabcorp licences, the conditions constrain the conduct of the authorised activities to activities in pursuance of a joint venture with what I will call the racing industry.  One sees that from the Tabcorp licence starting at page 143 of the appeal book at page 148, and a further Part 3 licence might be subject to very different conditions.

So that one could have radically different Part 3 licences and yet on the court’s construction those differences would not matter but identicality or near identicality of a licence provision would not qualify for the reason that it is located in another part of the Act.  That is not consonant, in our submission, with the proper and reasonable construction of 4.3.12.

It is striking, in our submission, that the State does not suggest that any legislative purpose or public policy is promoted or achieved by its construction of the Act, by the Court of Appeal’s construction of the Act.  What is the advantage that is promoted by that construction?  We say there is none.  We have already made the submission that there was nothing in the new licensing scheme itself or transition to that scheme which would be assisted by elimination of the 4.3.12 terminal payment.  So that is really dealing again with the purpose subject matter.  I have identified the purpose and the reasons why Tabcorp’s construction promotes it.

Could I just give the Court at this point references to the evidentiary material about the circumstances in which the terminal payment provision came to be enacted?  The trial judge summarises it at paragraph 67 of his reasons, 333 to 334.  As to the evidence, Mr Tilley, paragraph 6 of his statement, page 71 of the appeal book, lines 29 to 30.  Paragraph 25 at page 76 ‑ ‑ ‑

FRENCH CJ:   Are these page references in your submissions?

MR ARCHIBALD:   No, I am referring to the appeal book, the evidence itself.

FRENCH CJ:   Yes, I know that, but I am just asking whether the ‑ ‑ ‑

MR ARCHIBALD:   I do not think we have got all of these.  I am sorry, I should have double‑checked.

FRENCH CJ:   Yes, it is just reading out page numbers and paragraph numbers is I suppose ‑ ‑ ‑

MR ARCHIBALD:   Yes, I know.  We will check and if we have not done it comprehensively, could we provide a list later?

FRENCH CJ:   Very well, yes.

MR ARCHIBALD: Thank you. Could I then make some submissions about the construction of section 21 of the 1994 Act? Section 21 is found at pages 83 to 84 under tab 2 of the statutory bundle. The difference in language I have already indicated in response to your Honour the Chief Justice’s question. That difference is immaterial. The expression in section 21 on the grant of new licences should, in our submission, be construed in a way that is identical with the construction of the like expression in 4.3.12 of the 2003 legislation. The text and purpose are the same as in 2003.

The only contextual difference is the absence of Part 3A and, therefore, the absence of a positive indicator of a different species of licence to which the expression “new licences” may in fact apply.  But that difference in context is of no consequence.  All the other elements convey that the non‑specific meaning should be ascribed to new licences.

FRENCH CJ:   Are you saying that is supported by your 18‑year prospective ‑ ‑ ‑

MR ARCHIBALD:   Yes, I will come to list a few but it is context and purpose.  The text and purpose are the same.  The general context is the same.  The only missing element is the Part 3A, the presence of Part 3A which simply reflects no more than what was always potential, the absence of words of limitation, the absence of words under this part, the absence of the definite article.  One sees in the 1994 Act similar usages where what is to be referred to is a subsequent licence of the same species.  The expression “new licences” is not used.  Different expressions are used.

GORDON J:   Is that the position in 20(3)?

MR ARCHIBALD:   That is the same circumstances – “the new licences”?

GORDON J:   Yes.  Can that be referring to anything but a wagering licence and a gaming licence?

MR ARCHIBALD:   No, not there because the reference is back, it is a dependent reference.  The definite article reflects that and the reference is back ‑ ‑ ‑

GORDON J:   Back to what?

MR ARCHIBALD:   Back to section 20(1)(a) and (b).  This is the same drafting technique.  That primary reference is 20(1).  The secondary dependent reference is 20(3).

GORDON J:   Just so I am clear, does that mean that “new licences” in the second‑last line of subparagraph (3) you accept is a reference to a wagering licence and a gaming licence?

MR ARCHIBALD: It is denotation there – a connotation of the expression is wider but the denotation is the Part 3 licence referred to in 20(1). To see the use of expressions other than “new licences” where subsequent Part 3 licences are intended, one may look to section 14(1) on page 78. One sees the reference to “later licences”, not “new licences” but “later”. There are two references to “later licences” in the fourth line of subsection (1).

BELL J:   That is in the context of them being wagering or gaming licences.

MR ARCHIBALD: Yes, exactly but the usage is not new licences of that kind. It is later licences which is redolent of the meaning of “further and subsequent” to which I referred earlier. Another example is section 34(3) at page 97 – “the grant of another licence under this Act”. But in all relevant respects the features that we have referred to in respect of section 4.3.12 apply to section 21, save the context of Part 3A. Could I draw attention especially here to section 21(4), the second limb of subsection (4). Under that limb the legislation appropriates the consolidated fund ‑ there and then is hereby appropriated.

FRENCH CJ:   It is also appropriated under section 4.3.14(2), I think.

MR ARCHIBALD:   Yes, exactly, echoed there and were the Court of Appeal to be correct in its construction, incongruously preserved and affirmed in 2008.

FRENCH CJ:   Appropriated nothing.

MR ARCHIBALD:   Encumbering the consolidated fund in an amount which ‑ ‑ ‑

FRENCH CJ:   The Lord giveth and the Lord taketh away, perhaps.

MR ARCHIBALD:   Yes, but if one is casting around for indicia as to whether it really was the objective of 4.3.4A to expunge this terminal payment entitlement, why, one asks rhetorically, would one continue to preserve the appropriation and the consolidated fund - totally unnecessarily, totally inappropriate and yet it is done.  If there were elements that needed to be excised from the preservation, it was easy to do. 

This part continues to apply, save in respect of Division 3.  A few simple words would do it.  Those words were not introduced.  More strongly, just repeal it.  If there was no room for section 4.3.12 to operate, there was no room for any part of Division 3 to operate, yet the whole of the part, including the whole of the division, is affirmatively preserved.  The phraseology is, “This part applies.”  The expression “to apply” is to engage in a practical way, a practical way if one goes to the dictionaries.  Yet on the Court of Appeal’s construction there could be no practical engagement.

BELL J:   That would be true of provisions apart from Division 3.

MR ARCHIBALD:   There are some, but they are regulatory provisions which have no further operation because they are spent.  Absent the ability to grant further licences they would have no sphere of operation.  The terminal payment provision is not in the regulatory sphere.

BELL J:   I understand the argument.

MR ARCHIBALD:   Yes, but even if – and I think we have put this in our written submissions, allowing that there were some parts that would be inoperative, it was an easy thing to do to delineate them.  It is not complicated.  The filleting argument had no substance; it was rejected below.  We have made submissions in our written material in relation to the supposed statutory purpose of eschewing the perception that a right had been taken away.  That was the approach adopted by the court at paragraph 30 of its reasons, at page 425 of the appeal book.  We have dealt with that in our submissions, between paragraphs 62 and 66, upon which we rely.

Our fundamental submission is that there is no foundation, certainly not in intrinsic material or extrinsic material, to support the existence of an approach of that kind but, in any event, the words of the sections are incapable of achieving that result.  Their purpose was anti‑overlap, aid the transition from old regime to new regime - that was the limit of their achievement.  There was nothing more to 4.3.4A than that and it works harmoniously with 4.3.12 in its single iteration mode.

We have also addressed in our submissions the operation of the principle of legality and the cognate concept of avoiding manifest unfairness.  We do that between paragraphs 55 and 61.  We adopt those written submissions.  Whether the terminal payment provision conferred a right, vested or contingent, whether it conferred no more than an expectation, it was plainly a valuable opportunity to receive payment. 

The trial judge held it to be clearly a valuable right, paragraph 99, page 346, lines 1 to 2.  Leave aside whether it is a right, it was plainly valuable.  On the strength of that provision, the privatisation was got away very successfully, more successfully than what otherwise had been the case, and the value continued to exist.

Of course it was always capable of being eliminated by statutory measure, but even fundamental common law rights can be eliminated by statutory measures so it was not the more fragile because of its statutory provenance.  It was able to be eliminated, we say it was not, but if these provisions are susceptible of a construction which would see its elimination without compensation, one should swerve away from that conclusion.  One should avoid it unless it is unavoidable.  Here we submit it was plainly unavoidable. 

But, associated with that, and even perhaps regardless of the doctrine of legality, one has the notion of unfairness.  The aphorism of Sir Owen Dixon which, in our submission, commends itself here was that the fairness of a provision is a:

surer [guide] to its meaning than the logic with which it is constructed. 

That is Agalianos (1955) 92 CLR 390 to 397.

KIEFEL J:   Was his Honour speaking in terms of good faith?

MR ARCHIBALD:   Not I think as we would now understand it, no.  But one might associate it in this context with the approach to construction of commercial provisions.  I have alluded to the commercial origins of this statutory provision.  The provision should be given what one might call a sensible, reasonable, commercial construction.  A sensible, reasonable, commercial construction would not, in our submission, see the terminal payment provision denied to Tabcorp.

KIEFEL J:   Do you say we should approach the construction of this statute with respect to any assumption on the part of the conduct of the Parliament and those advising it?

MR ARCHIBALD:   Well, yes.  From the point of view of the last two matters I have alluded to, one should approach the matter on the assumption that Parliament would not likely have intended to deprive Tabcorp of such advantage as existed in the terminal payment arrangements without compensation, without clear words, very clear words – unmistakable words – because of the effect of expropriation and because of the unfairness.

One should proceed upon the footing that Parliament would not intend to render a provision which remained in the legislation redundant, totally redundant, without using unmistakable language.  Associated with that is the notion that one would ordinarily expect Parliament to repeal a provision if it contemplated that the provision should play no ongoing role in the statutory material. 

Even more strongly than that, one would not conclude that Parliament on the one hand would expressly preserve a provision if the true intention was that the provision had no further operation – be rendered nugatory.  All of those matters should bear upon the view the Court takes and they bore upon the Court of Appeal. 

The Court of Appeal said, in substance, we see that this construction will render that provision redundant, “denuded” in the language or elsewhere “emasculated”, but we have no alternative.  We have no alternative, the court thought, because we are faced with the use within the section of a defined expression and you cannot fight against the presence within the very section of a defined expression. 

That may have been good for the Tatts Case but it was wrong – the court made a wrong assumption that that was the circumstance that presented itself in the Tabcorp Case.  In many respects, the court’s reasoning in the Tabcorp Case is a derivative of the reasoning that was used in the Tatts Case.  We say the Tatts Case – the Tatts statutory case was a very different case from this case.  So that reasoning falls foul.

Were there not the compulsion on the court to adopt the conclusion that it did, one might infer that the court would have acceded to the construction for which we contend.  In our submission, this Court should.  Might I ask Mr Sheahan to address in the notice of contention?

FRENCH CJ:   Yes, thank you, Mr Archibald.  Yes, Mr Sheahan.

MR SHEAHAN:   Your Honours, in the context of the notice of contention, the premise for the discussion, of course, is different.  It is that the expression “new licences” in 4.3.12 is not read as if it said “new licences under this part”.  All the respondent’s arguments on the notice of contention proceed by isolating one or more features – the Part 3 regime for licences.  They treat them as essential and then they say they are not to be found in the new regime.  In all but one respect, the arguments are the same as arguments that are raised below and rejected, both by the trial judge and the Court of Appeal.  I need to explain that last proposition very briefly.

As Mr Archibald has just pointed out, the Court of Appeal in our case at paragraph 37 at appeal book 427 adopted by reference its reasoning in its judgment in the Tatts appeal, and its reasoning in the Tatts appeal, of course, was only pertinent to the question of whether new gaming machine entitlements were the same as the gaming operator’s licence and did not tranche upon the keno licence or, more particularly, the wagering licence.  But we say that we can take the Court of Appeal effectively to have adopted what the trial judge said about these matters because they are really a fortiori, if I can put it that way.

The position with the wagering licence and the keno licence I will deal with first, because they can be dealt with briefly.  Considered as separate licences, we do not understand there to be any submission against us that the new wagering and betting licence is materially different from the old wagering licence or that the rights conferred by the new keno licence are materially different from the rights conferred in respect of keno by the old gaming licence.

Rather, the arguments are about aggregation and disaggregation.  The wagering licence was conjoint with the gaming licence.  The keno licence was conjoint with – or the keno authorities were conjoint with the gaming licence.  That is said to be the point of difference.  It is an aggregation point.  But, of course, the aggregation point, if it is a point, operates, one might think, with no significance in relation to the gaming machine entitlements where what was one entitlement has now become 13,250, so if it does not work for gaming machine entitlements, it is not going to work for wagering and for keno.

Now, in relation to wagering and keno, the State raises this aggregation point in two guises.  The first is in their submissions at paragraph 44 where they say that to be a new licence it must cover the same ground as both the wagering licence and the gaming licence together.  The second point, which is in paragraph 48 of their submissions, is that the licences must be issued to the same person in order to be new licences.

As we say, if 13,500 gaming machine entitlements are not a problem, then those two features of a new licensing regime will not take them outside the scope of the generic expression “new licences”.  The essential error here, in our submission, is to focus on what are truly formal features of the legislation governing Part 3 licences, important in the context of Part 3; they are quite specific and detailed and proscriptive – and prescriptive.  But the exercise here rather is to look for qualities in the new licences that make it appropriate in substance to say that they take the place of the wagering and gaming licences, so that the terminal payment provision is properly engaged.  That is all I wanted to say about wagering and keno for the moment.

The remaining issues that they raise focus on some points of detail in relation to the gaming machine entitlements as compared to the gaming licences.  Can I just flag four points?  The first is, if I can put it this way, a practical one and addresses a point in part raised by your Honour Justice Keane.  It was common ground that at the expiry of the gaming licence that had been issued to Tabcorp, the maximum number of gaming machines in Victoria, leaving aside the Melbourne Casino which was a special case, was 27,500.  That was by virtue of a gazette, I think.

Now, 50 per cent of those were to be operated by Tabcorp, 50 per cent by Tatts.  There was a duopoly.  We see that in the judgment in the Tatts appeal at paragraph 166.  Under the new Part 4A, which dealt with gaming operator’s licences, in June 2010 the Minister created, as it happens, 27,500 gaming machine entitlements.

FRENCH CJ:   Now, these went to venue operators, did they not?

MR SHEAHAN:   They went to venue operators.  So, what happened was that, instead of there being the two holders of 13 and a bit thousand each, there were a much larger number of holders of venue specific licences to operate gaming machines.  For people turning up at a venue there was no change.  There is a specific finding about this in the Tatts appeal at paragraph 177.

To take up more directly your Honour Justice Keane’s question, is a licence for half a duopoly a licence that is substantially the same as one of these venue specific gaming machine entitlements combined with a venue operator’s licence.  It is one of those questions in which you need to keep in mind why you are asking the question.  It is plainly right that from the point of view of the gaming business operator that there is a very substantial difference between those two things, a duopoly or a slice of a 27,000 piece pie.

From the point of view of the customer, there is no difference.  They go into the same gambling venue they went to last week, the same machine is there.  There is no change.  The question that arises here is not from either of those perspectives.  It is not from the perspective of the business organisation or the retail experience of the consumer.  It is about vindicating the express basis on which the State as a promoter raised hundreds of millions of dollars from the investing public.

That express basis referred to in the prospectus, which is in the appeal book, was that Tabcorp would be paid a terminal amount on the grant of new licences, and from that perspective it makes sense to ask not whether an individual subsequent licence is similar or identical to the original licence but from that perspective you ask whether the new licences together can be seen, as a matter of substance, to take over from or stand in the place of the statutory authorities originally given to Tabcorp for which it paid and it paid additional money on the strength of the terminal payment provision.

Three other points about gaming authorities.  The first is this.  The gaming licence, the old regime and the gaming machine entitlements, as the trial judge said, authorise explicitly exactly the same core activity which is the conduct of gaming.  For gaming licences it is section 3.4.2(d) at page 535 of the statute book, for gaming machine entitlements it is section 3.4A.2(1) at page 654.  They both have the same definition in section 3.1.4.  The conduct of gaming is defined.  It covers what you would expect and some ancillary activities like the installation, adjustment and repair of gaming machines. 

I say this is the core because there is an unchallenged finding of the trial judge that the conduct of gaming in a defined sense provided “the revenue that comprises the principal value” of the licences.  That is at paragraph 150 of the judgment, appeal book 359.  In addition, the very first section of the Act identifies its objects, one of them is providing for the conduct of gaming, using that defined expression.  That is at page 268 in the statute book.  It does not make reference there, for example, to licensing manufacturing of gaming machines.  That was not part of the core activity of this legislation.  That is a point of some small significance for the next point. 

Under the new regime a gaming machine entitlement goes hand in hand with a venue operator’s licence.  So, for example, under 3.4A.5(b) at page 656 a gaming machine entitlement can only be allocated to a venue operator.  A “venue operator” is a defined expression.  The holder of a venue operator’s licence is page 499.  Similarly, 3.4A.2(1), the conduct of gaming at a venue is only lawful if the venue operator holds the gaming machine entitlement.  So, they are bolted on to each other in a quite strong way. 

Now, the trial judge dealt with the effect of this combination in his reasons in a section that will answer, I think, your Honour Justice Kiefel’s question at appeal book 360 to 361.  We set out a table on 361 which put in the left‑hand column the rights appertaining to a gaming operator’s licence.  That would also be a gaming licence.  The right‑hand columns it splits out the rights appertaining to a gaming machine entitlement and the venue operator’s licence.  So, the left‑hand column is the old system, the two right‑hand columns together are the new system.

The result is that (b), to manufacture, was a right under the old regime but is not given under the new licences; (c) is a right which his Honour goes on to find is rightly inapplicable under the new regime so you do not have to worry about it and, otherwise, the rights under the two regimes are virtually identical. 

As for manufacturing, his Honour found at 362 in paragraph 154, rightly, in our submission, that it was “ancillary”.  It is important to keep in mind that manufacturing could be done under the old and new regimes by someone who was not engaged in the conduct of gaming at all.  There was a

separate system of licensing for people who were manufacturers.  It was not something that went hand in hand with the conduct of gaming.  So the key provisions are 3.4.5, page 539; 3.4.60 and 61, which set up a role of manufacturers; and, 3.5.1 which is the provision about prohibition.

The third point is that it was – sorry, I have just dealt with the third point which was the practical turnover.  Finally, on the gaming machine entitlements, the substantive equivalence of the two sets of licences is suggested, in our submission, by the care with which the Act went to ensure that there was no overlap between the two. 

Now, this has already been mentioned in passing by our learned friend, Mr Archibald, but in relation to wagering, 4.3A.8(2) provides that a wagering and betting licence, the new regime, cannot be issued to have effect while the old wagering licence and gaming licence are in effect.  There is an almost identically worded provision in relation to keno, 6A.3.18(2) and in relation to gaming, 3.4A.1(c), the authority conferred by a gaming machine entitlement is only effective if no gaming is currently authorised for that venue by “a gaming licence or a gaming operator’s licence”.

Now, otherwise, your Honours, I think we can rest by adopting what had been said on these topics by what was said in the courts below and in our written submissions in reply.

FRENCH CJ:   Thank you, Mr Sheahan. 

MR ARCHIBALD:   Could I deal with one matter, if the Court pleases.  Extrinsic evidence was dealt with by the trial judge between paragraphs 112 and 119 in his Honour’s reasons at pages 349 to 351 of the appeal book.  At 117, his Honour said that apart from the budget paper to which I referred and a media release to which his Honour refers at 112, there was no extrinsic evidence concerning the 2008 and 2009 amendments which sheds light on the government’s object and purpose concerning the continuing operation of the terminal payment provisions for Tabcorp.  So his Honour found in substance there was nothing else. 

His Honour, I should add, goes on to observe the perhaps insubstantiality of that material in press release and in the budget papers reflecting as they do the government’s subjective view, not, one might add, Parliament’s view, and that at line 20 on page 351:

even if the Government’s subjective view is given some weight, it is equivocal and unreliable –

We would not wish to argue against that.  We mentioned it for the reason we did.

FRENCH CJ:   I think the significance of extrinsic material in this context is whether it can be said that a purpose of, in effect, extinguishing the entitlement provision was exposed to the Parliament in connection with the introduction of this legislation because that would then inform ‑ ‑ ‑

MR ARCHIBALD:   Yes, indeed.

FRENCH CJ:   ‑ ‑ ‑ an inference about legislative purpose which are sometimes distinguished from intention, that being an “after the event” inclusion.

MR ARCHIBALD:   Yes, his Honour’s answer is as indicated.

FRENCH CJ:   Yes, all right, thank you.

GORDON J:   Can I just ask one question about that?  Your client obviously had a considerable involvement in the 1994 negotiations leading to the privatisation and the drafting of the Act.  Did it have any involvement in these amendments?

MR ARCHIBALD:   The amendments, no.  One of the grounds urged at trial was that we had not been afforded a good faith treatment which we said we were entitled to and the particulars were that we had not been involved in the amendments.  We would not, with respect, accept what your Honour indicated as to our client’s involvement in the 1994 arrangements.  Our client came into existence at the end of June 1994 when the legislation was already passed.

GORDON J:   Predecessor, maybe.

MR ARCHIBALD:   Yes, yes.  There was some movement out of public position with departments and ministers involved and the creation of the new corporate entity with an independent board put in place very late in the piece – a board that did not accept responsibility for the prospectus.  If the Court pleases.

FRENCH CJ:   Thank you.  Yes, Ms Harris.

MS HARRIS:   If the Court pleases.  Tabcorp can only succeed in this appeal if the Court accepts that the words “new licences” in section 4.3.12 bore what the Court of Appeal referred to as a generic as opposed to specific meaning in 2012 when the licences expired.  Tabcorp’s submissions on this point seem to come down to four core propositions.

The first proposition is that we should look at this legislation only – or, at least, predominately as it stood in 2012.  We should not look at the way it has evolved since the inception of the provision in 1994 and a very good reason for that is that once you look at the inception of this provision in 1994, the generic meaning becomes impossible to sustain.

The second core proposition that underlies the submissions is that if we just look at this legislation, the meaning of this section, through the prism of the legislation as it stood in 2012, it becomes possible to afford the words “new licences” a generic meaning.  The third proposition is that that generic meaning should be adopted because that is the one that ensures that Tabcorp gets paid, that this entitlement is fulfilled.  This submission is prosecuted wrongly, we say, under the umbrellas of legality and redundancy.

Now, the fourth proposition – and this only comes through faintly in the submissions because Tabcorp has been very astute not to delve into the legislation as it existed before 2012 – is that if it is relevant to look at what the legislation said before the 2008 and 2009 amendments then we can extract a generic meaning for the words “new licences” by affording that composite term a different meaning to the singular expression “licences” which had a clear meaning both in 2012 and before.

The State’s position is that each of these propositions is wrong and that the Court of Appeal was perfectly right to find that the term “new licences” in section 4.3.12, as at August 2012, meant new wagering and gaming licences issued under the part and had always borne that specific meaning.  We see that from paragraph 28 of the court’s reasons.

In terms of the availability of legislative history, your Honours, we embrace much of what is said in the submissions about the court’s approach to the task of statutory construction.  We think it is helpful, perhaps, to look at what was said in one of the cases relied by Tabcorp, which is Plaintiff S297/2013 v Minister for Immigration and Border Protection 309 ALR 209. It is the fourth case on the list.

The only place I want to take the Court to is paragraph [25] because it encapsulates really the approach that we say ought to be taken to the task of construction in this case.  In that case the issue was whether an instrument, issued under section 85 of the Act by the Minister, was within the power conferred.  Your Honours will see that four members of this Court said:

The reasoning underlying those answers -

The answers being no –

necessarily begins by locating s 85 within the scheme of the Act in its current amended form.  “Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible”, in the manner indicated in Project Blue Sky Inc v Australian Broadcasting Authority, “by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions”.

The next bit is important: 

The numerous amendments that have been made to the Act form part of its legislative history and bear legitimately on its construction.  They are to be construed as part of the Act, so as to be read together “as a combined statement of the will of the legislature”.

The next bit is also important:

The timing of the amendments might assist in determining the “hierarchy” of apparently conflicting provisions of the Act as amended, but notions of “implied repeal” have no place.

We lay emphasis on that, your Honours, because when approached in that fashion we understand the way in which section 4.3.4A works together with the balance of the sections in the part upon its enactment in 2008.  If we read the legislation in 2012, without those lessons of history, then section 4.3.4A seems incongruous when placed beside other sections of the part.

It says no further wagering and gaming licences shall be issued and it sits alongside provisions which provide for the very issue of those licences.  But when we understand the sequence of events which has led section 4.3.4A to come into the legislation, then those provisions are readily reconcilable in the manner found by the Court of Appeal.  The purpose of section 4.3.4A was to bring to an immediate end the effective operation of some sections in the part, it was to limit the ongoing operation of some sections of the part and it was to place a sunset on the operation of the balance of the part as at the expiry of the gaming operator’s licences and the gaming licence.

Now, Part 3 of Chapter 4 remains in the legislation, but none of it now has any work to do because of the insertion of section 4.3.4A as at 2008.  We want to start from the other end, if you like.  Our learned friends took your Honours at length to the legislation as it stood in 2012.  We would like to start at the other end and show the way in which the legislation developed over time.  Tabcorp’s approach is in a sense a strange one, given the emphasis that it lays on the purpose of the entitlement provision.  The purpose of the entitlement provision was something which fell to be ascertained at the time it entered the legislation in 1994 and it was common ground at trial, and the courts below so found, that the purpose of the provision was to ensure a non‑amortisation of the licence fee upon the float of Tabcorp.  So much was uncontroversial.

But that purpose does not drive either of the meanings that are placed before the Court by the competing parties. That purpose in order to be achieved does not require the words “new licences” to be given either a specific or generic meaning. It is neutral. Now, there was evidence before the trial judge ‑ and it is included in the appeal book – that was proffered by Tabcorp, the evidence of an expert accountant, Mr Westworth, and that appears at appeal book – I will come back to it in a moment. But the burden of that evidence was, if section 21, the payment provision, had not been inserted in the legislation, then the licence fee would not have been amortised and that would have had a consequential effect on the profitability of Tabcorp in the years after the float. Your Honours will find it at appeal book 93 and following.

But nothing in Mr Westworth’s report engages with this point that Tabcorp has made this morning about the robustness of the right. There is nothing in his report that would suggest it could only be amortised if you assign a generic meaning to section 21 because that makes the ride a lot more robust than if it is a specific meaning. There is nothing in the report of that kind, and not surprisingly.

It was the availability of the payment, the prospect of the payment, not the certainty but the prospect of the payment in section 21 which was sufficient to ensure non‑amortisation of the licence fee and so it came to pass. Until 2008 ‑ this was the evidence before the trial judge ‑ until 2008, when the government announced its intention to move away from the duopoly, the licence fee had not been amortised.

So, it was the content of the section, not the quality of what might ultimately be issued that was important for the fulfilment of the object and, of course, perhaps uncomfortably, that object has now been fulfilled.  It was fulfilled in 1994 when Tabcorp floated and the only point of saying that is that that purpose does not drive any particular conclusion about the meaning that must be given to section 4.3.12.  It is entirely neutral.

KIEFEL J:   But do you go so far as to say that as passed, it cannot be inferred from the original legislation, an intention to repay the licence fee?

MS HARRIS:   Your Honour, in terms of a certain promise, absolutely, your Honour.  It was only ever a contingent entitlement which ‑ ‑ ‑

KIEFEL J:   Well, that is one way of reading the words “on the grant of new licences”.  Another way is to identify them ‑ as Mr Archibald has put it, identify those words as identifying the source of the repayment.

MS HARRIS:   So the difficulties for Tabcorp are several.  If we confine ourselves to the text of the statute, and I will come to that directly, your Honour, we will see that there was never any certainty that new licences would ever be issued, new wagering and gaming licences would ever be issued.  It was contingent upon the government taking a decision, in effect, that such licences would be made available and then the authority being satisfied of certain things in respect of the applicant and only thereafter could such new licences be issued.

Now, the second problem for Tabcorp lies in the Treasurer’s letter which was referred to in the prospectus for the float of Tabcorp and was available to investors, made available by way of that prospectus to investors in Tabcorp and that the Treasurer’s letter is annexed to the Court of Appeal’s judgment at appeal book 446.  Can I take your Honours to that briefly?  Your Honours see that it is a letter from the Treasurer of Victoria to the Chairman of Tabcorp and the Chairman of VicRacing which was Tabcorp’s joint venturer in the wagering sphere.  It starts by saying:

I am writing to you to confirm the principles on which the Government of Victoria is privatising the TAB ‑

which was the government‑owned body which was Tabcorp’s predecessor.  The second paragraph is extremely important ‑

I must however make it clear that the statement of principles in this letter does not bind this Government or future Governments and, of course, that the Victorian Parliament has the power at any time to amend existing legislation or pass new legislation affecting the operations of the TABCORP group of companies, the Victorian Racing Industry or the terms on which those operations are conducted. 

They –

i.e. the principals, these non‑binding principals ‑

are as follows ‑

Then on page 448 – sorry, perhaps we should start on 447 which is the commencement of principle 6 ‑

TABCORP has now been granted a wagering licence and a gaming licence which will come into effect on the successful conclusion of this float. 

The licences will be for terms of 18 years and will be concurrent and not separable. 

The Government does not currently intend to grant further gaming or wagering licences to persons who are not now authorised to conduct gaming or wagering during that 18 year period. 

TABCORP may apply for new licences –

inescapably, in the context of this letter, that is new wagering and gaming licences ‑

TABCORP may apply for new licences after the initial licences terminate and on the same terms as other applicants.  It is expected that the process of award of new licences will involve a public tender.  It is also expected –

we see the language of expectation ‑

but not guaranteed that the new licences would be awarded to the highest qualifying bidder. If the new licensee is not TABCORP, TABCORP will be entitled to receive from bid proceeds received by the State an agreed capital compensation amount of approximately the net amount TABCORP will pay the Government for the initial licences calculated in accordance with the Gaming and Betting Act 1994 –

Then, in the next paragraph ‑ ‑ ‑

BELL J:   In the paragraph that you have just read, in the balance of it, there is not the language of expectation in the event that Tabcorp is not successful in obtaining renewal of the licence.  So that the prudent investor reading this letter might understand Tabcorp had an expectation that it was likely to have its licence renewed but in the event that did not occur Tabcorp would be entitled to receive the bid proceeds – from the bid proceeds, compensation.

MS HARRIS:   Your Honour, I would embrace that more readily if it were not for the second paragraph of the letter which I read to your Honour.  The statement of principles in the letter is made clear, these are non‑binding on future governments.  These are non‑binding on future Parliaments.

FRENCH CJ:   That is a statement of the obvious, is it not?

MS HARRIS:   But it is a statement of warning, your Honour.

FRENCH CJ:   Absent manner and form entrenchments.

MS HARRIS:   But, your Honour, as a statement of the obvious, one asks why it is here unless to advert to the very possibility of what has occurred, a future government changed its mind.

FRENCH CJ:   Well, you talk about a government.  What was the Parliament told it was doing in 2012?

MS HARRIS:   So, if your Honour’s question ‑ as I apprehend it might be ‑ was there anything in the second reading speech to the effect, these amendments will deny Tabcorp compensation?  The answer is no.  For reasons I will come to – and I want to deal with this very clearly, you Honours – it does not matter because what the second reading speech did say, and what the Executive Government had said, was more important.  The more important thing that it had said was, we will not be granting any more of these licences.  If as we say – and we will come to the reasons why – but if as we say, section 4.3.12 could only be triggered by specific licences of that kind, then the entitlement was denied by the simple failure of the administration to grant such a licence.  It was not 4.3.4 ‑ ‑ ‑

FRENCH CJ:   But the investors were told in the prospectus – subject to the caveat of the obvious – that Tabcorp would be entitled to compensation in the event that it did not receive a new licence.  One can infer, presumably, that that purpose, at least, was known to the Parliament, or exposed to the Parliament in respect of the 1994 Act.  I do not know whether it was or not.  One would have expected the Parliament to be told that something as important as this was going to be a purpose of the legislation, that is, to take away their compensation right, even though Parliament is free to do that, of course.

MS HARRIS:   Well, your Honour, I guess there are a number of answers to this.  The first is that, in a sense, Parliament was told in the budget paper because that is laid before the Parliament and the budget paper – if we can ‑ ‑ ‑

FRENCH CJ:   That is the budget paper that we were taken to earlier by Mr Archibald.

MS HARRIS:   Yes.  But, your Honours, with respect, were not taken to one very critical paragraph.  It is at page 309.  Can we read it from the top, your Honour:

In 1992, a gaming operator’s licence was issued to the Trustees of the Will and Estate of the late George Adams, now trading as Tatts Group.  In 1994, the state issued a wagering and gaming licence to TABCORP Holdings Limited (TABCORP).  These licences expire in 2012 and the end of licence arrangements are specified in the Gambling Regulation Act 2003.

These end of licence arrangements include compensation provisions for the licensees predicated on the current licensing arrangements being rolled over for a further period beyond 2012.

Your Honour, that is significant at two levels.  Firstly, when we look at the 1994 Act – the context of the 1994 Act – it is obvious that that was a correct statement.  The entire scheme of the Act envisages that the payment entitlement will only be enlivened if the current arrangements are rolled over for a further term, not, as the Treasurer’s letter said, some further government decides on some completely different regulatory scheme and then we are in different territory.

The second thing that it engages with is then the balance of the paragraph to which Mr Archibald took your Honours.  So, having said that these end of licence payment arrangements were predicated upon a rollover of the current arrangements, the paper goes on directly to say:

On 10 April 2008, the government announced a new regulatory model for the post‑2012 licences.  The main changes include:

·separating the wagering and gaming licence –

to a wagering licence on its own and then, significantly –

·transitioning from the current gaming operator duopoly to a system where venue operators are licensed to own and operate gaming machines in their own right.

That then makes sense of what follows –

After considering the end of licence arrangements in the Gambling Regulation Act 2003, the government has formed the view that neither Tatts Group nor TABCORP will be entitled to compensation after the expiration of their current licences.

The government does not intend to alter or amend the provisions in the Gambling Regulation Act 2003 that deal specifically with the end of licence arrangements for Tatts Group and TABCORP.

On this reasoning, it did not need to because the predicate was the continuation of the current regime.  Those payment arrangements could only be triggered by issue of licences of the same kind, and we are not going to issue those licences anymore, so we do not need to amend the legislation.

BELL J:   One needs to be a canny reader to derive that understanding.  Can I ask this?  The Court of Appeal said at appeal book 425, paragraph 30, that ‑ ‑ ‑

MS HARRIS:   I beg your pardon, your Honour, which paragraph?

BELL J:   Paragraph 30.  This is at 425.  It is where the Court of Appeal concluded that:

Parliament determined to deprive that right of any practical content –

and then the court went on to say that this revealed ‑

a legislative determination to eschew the perception that Tabcorp had a right to a payment which has been taken away.

Do you embrace that understanding of what might be described as the legislative intention informing the 2008 amendment?

MS HARRIS:   Your Honour, I do not think it would be appropriate for me to either embrace it or reject it, for two reasons. 

BELL J:   Well, perhaps I will ask you this.  Mr Archibald suggested that you had not identified any purpose for 4.3.4A.  Can you perhaps do that?

MS HARRIS:   Well, the purpose for 4.3.4A is the one that is reflected in the budget paper in this sense.  If we accept – and I will come to the legislation – that the right in 4.3.12 can only be triggered by licences of this kind then it is sufficient to deny the payment entitlement, that the Executive simply not issue those licences.  But what Parliament did by passing 4.3.4A was to put it beyond doubt, was to put the matter beyond the reach of the Executive forever, or at least for as long as 4.3.4A remained in the legislation.

So we see the two levels of government operating in lockstep, if you like, your Honour, and this was part of Tabcorp’s case at trial, its positive case at trial, its positive pleaded case at trial.  It addresses this in paragraphs 78 and 79 of its pleading which are perhaps worthy of note.  They are at page 29 of the appeal book.  So paragraph 78 records - at page 28 - it records the announcement that was made by the Premier on 10 April in similar terms to what we have seen in the budget paper, that:

the Government had decided to move to a new structure –

away from separate gaming machine operators to a venue‑based model; that –at (d):

a new regulatory model for the operation of wagering, gaming and Club Keno would operate after the expiration in 2012 of the licences held by Tabcorp and Tattersall’s;

(e)the Government had formed the view that neither Tabcorp nor Tattersall’s is entitled to compensation; and

(f)legislation giving effect to the announcement would be introduced into the Parliament of Victoria -

Thereafter they pleaded – it was of common ground – that following that announcement the State introduced those amendments, relevantly, 4.3.4A.

The whole predicate of Tabcorp’s case was that 4.3.4A, as introduced, was directed to that very purpose.  That was the foundation of their good faith and reasonable dealing argument, that in taking those steps, you have denied us – you took steps to deny us – the compensation which we had expected.  So, not only – we see it as uncontroversial in a way, your Honour, but as I said, when you see that sequence of events, the resolution by the Executive that this will come to an end, that the specific licences which could be the only trigger for this payment entitlement will not be issued, and then that is supported by legislation which puts the matter beyond doubt by, in effect, making it impossible for the Executive to change its mind and issue those licences.

BELL J:   Making it impossible for the trigger mechanism for the provision that remained on the books which, to the casual reader, suggested that the scheme for terminal payment in respect of Tabcorp was still available.

MS HARRIS:   Well, if one opens the statute your Honour, section 4.3.12 is still there.

BELL J:   Yes.  Let me just raise this with you?  Going back to the analysis that the Court of Appeal engaged in at paragraph 30 of their reasons, the court in the course of considering the arguments on construction had regard to principles about the caution that 4.1 would favour a construction that deprived a body of its valuable interest, to use a more neutral expression.

How does that approach sit with a conclusion that one can divine here a legislative intention to deprive a right of practical content by providing that the precondition for its operation could not occur in order to assume the perception that the right had been taken away?  The two seem to be in tension.

MS HARRIS:   Well, your Honour, that is part of the reason why – I do not propose to speculate as to the reasons why Parliament took one course rather than another but I will come back to it and explain one reason why that might be so.  What I was trying to explain in answer to your Honour the Chief Justice though is that in a sense this is now a sideshow.  Section 4.3.4A is now a sideshow because we do need to rely on that having taken anything away.  If, as we say, the payment entitlement can only be triggered by licences of that specific kind, such licences have not been issued and the Executive Government made clear they were not going to issue them.

So, regardless of what Parliament did and regardless of what Parliament intended by 4.3.4A, this does not come down to an argument about whether that section managed to take away an entitlement that previously existed.  That entitlement was only ever contingent upon the issue of these specific licences and the Executive Government had made a decision not to issue any more and, as the Court of Appeal pointed out in paragraph 26, that is in a way - the manner in which one might test this, if that simple administrative act or non‑act ‑ ‑ ‑

FRENCH CJ:   Well, that Executive Government might have made a decision, but your argument is that the facility for issuing that kind of licence again had been taken away by the legislation.  What one Executive Government does, another Executive Government might do something different.

MS HARRIS:   Indeed, your Honour, but we are not in that territory, regardless of section 4.3.4A.  One does not need to rely on it, in other words, in order to conclude that no payment is available because no such licences have been issued.  They just have not been issued.  There was no case put at trial that, but for the legislation, the Executive would have issued a licence that would have been contrary to the facts.  Once the Executive so determined, that was the end of it. 

So there is something somewhat distracting about focusing on whether or not section 4.3.4A takes away a right.  We say it was not a right.  It was not even contingent.  It only became a right once certain things happened.  But it is a distraction because if the section has a specific meaning, regardless of section 4.3.4A, it has never been triggered and if it has a generic meaning, as Tabcorp contends, it cannot help me.

FRENCH CJ:   That might be a convenient time.

MS HARRIS:   As your Honour pleases.

FRENCH CJ:   We will adjourn till 2.15.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

FRENCH CJ:   Yes, Ms Harris.

MS HARRIS: Thank you, your Honour. I promised before lunch to come to the 1994 statute and it is there I would like to turn. At page 83 of the agreed bundle we find section 21 of the Gaming and Betting Act 1994. As our learned friends noted, the terms of this section – save for excisions relating to the initial licence – are materially identical to 4.3.12. So we see in the first subsection that the trigger is the grant of new licences and:

On the grant of new licences . . . the person who was the holder of the licences last in force . . . is entitled to be paid an amount equal to the licence value of the former licences or the premium payment paid by the new licensee, whichever is the lesser.

Now, key terms in that section were defined in the legislation. The Court was not taken to, perhaps, the most important definition in the Act which appears on page 69 of the bundle. Your Honours might care to keep a finger in section 21. Your Honours see at the top of page 69, section 3, of the 1994 Act provides that:

“licence” means the wagering licence or the gaming licence granted under Part 2 –

not includes, means.  Similarly, two down:

“licensee” means the holder of the wagering licence and the gaming licence ‑

Those terms are also defined and defined exclusively.  We see “gaming licence” defined on page 68 of the bundle at about the middle of the page: 

“gaming licence” means the gaming licence granted under Part 2 ‑

Before I turn to “wagering licence”, can I ask your Honours to note the definition of “initial licences”:

means the first wagering licence and the first gaming licence granted to Tabco under this Act –

The definition of “wagering licence” appears on page 72 of the bundle:

“wagering licence” means the wagering licence granted under Part 2 ‑ ‑ ‑

BELL J:   Were there other licences apart from gaming and wagering licences regulated by the 1994 Act?

MS HARRIS: No, your Honour. So when we come back to section 21, as we will do, and we plug those definitions in, it becomes impossible to give the section the generic meaning that is contended for by Tabcorp. Can we start, though, by looking at Part 2, remembering that the definitions ‑ ‑ ‑

FRENCH CJ:   Well, the genus is “gaming and wagering licences”.

MS HARRIS:   Yes, your Honour.  When we come to Part 2, which is the reference point for the definitions to which I just took the Court, the heading is “Wagering and Gaming Licence”.  That of course forms part of the Act and we see in what follows, as your Honour Justice Bell foreshadowed with your question, that the exclusive province of these provisions are the wagering and gaming licences. 

Section 7 is relevant.  That appears on page 74.  It is relevant because it indicates that the gaming licence confers “the same authority” as “the holder of a gaming operator’s licence”.  That is at subsection (c).  So we know we have to look to the Gaming Machine Control Act to understand what authority is conferred by a gaming licence.

Division 2 is headed “Grant of initial licences”. As defined, this can only be the wagering licence and the gaming licence that have been granted to Tabco. We see provision in paragraphs 10 through 12 for the grant of those licences and might we ask your Honours to note that they are conjoined licences. One cannot be granted without the other. They are inevitably combined. That forms an important part of the schema of section 21 also because it contemplates that it will be triggered by the grant of conjoined licences of that kind.

When we get to Division 3, can I ask your Honours to note the heading - “Grant of licences after initial licences”? Now, per the definitions, that can only be the wagering licence and the gaming licence. Section 14 allows a company incorporated under the Corporations Law to apply for such a licence, or such licences.  Again, indisputably, we are only talking about the wagering licence and the gaming licence.  Can I ask your Honours to note subsection (3)(c).  The application:

must be accompanied by a statement of the premium payment offered by the applicant –

That is important because it engages with the formula in section 21 for the payment. Your Honours might remember that the payment formula or the payment entitlement is framed in terms of the lesser of the premium payment by the new licensee and the licence value of the outgoing licensee.

Can I also ask your Honours to note, before we leave subsection (1), that four lines down we see the composite phrase “later licences”.  Now, even though it is accompanied by that additional adjective, there cannot be any doubt, we respectfully submit, but that that composite phrase refers to later versions of the licences as defined, the wagering and gaming licences. 

Now, your Honour Justice Kiefel asked me a question before lunch about the certainty of payment, if you like, and so your Honour sees in paragraphs 15, 16, 17, 18, 19 the steps that have to be taken before there is a possibility of a new licence – new conjoined licences to be granted, and your Honours also see that the result of those provisions is that there is every possibility that no such licences will be granted.  So, for example, at paragraph 15, subsection (1):

The Authority must not recommend that a licence be granted unless satisfied –

of the matter set out in the section. I am jumping around but I notice that at the top of the page which is the end of section 14, there is a reference to the appropriation of the Consolidated Fund “to the extent necessary” and that is to the extent necessary to refund any part of a fee submitted by an aspirant for a licence where that application has to be abandoned or they do not satisfy the prerequisites of the section.

So that appropriation obviously does not admit of a certainty of payment.  It is as necessary to facilitate the payment if it becomes necessary.  In paragraph 16(1), the authority is required to carry out various investigations.  At subsection (4) of that section:

The authority may refuse to consider an application for the licences –

if certain conditions are satisfied.  In section 17, further information might be required and in subsection (2):

the Authority my refuse to consider the application concerned ‑

if that requirement is not complied with.  Then in 19(1):

The Authority must notify an applicant in writing –

whether it has determined to recommend the licence or not and it is not required to give reasons, so it is a binary decision - yes or no.  But it admits of the distinct possibility that no such application will be granted.  Then we get to paragraph 20.  Again, it is headed “Grant of licence”, not “Wagering and gaming licence” but, as defined, can only mean “The wagering and gaming licence.”

The Governor in Council is empowered to grant an applicant, recommended by the authority, those licences on payment of the premium payment. Again, we see that term which is engaged by the formula in section 21, to which we will come in a moment. Subsection (2) tells the circumstances in which the Governor in Council must not grant the licences. Again, it admits of the possibility that the licences will not be granted.

So to the extent Tabcorp submitted, in effect, that this was a certainty, all but a certainty, something that it had an expectation of receiving, that is denied by the legislation.  It is a contingent right that can only be triggered if less licences of this kind are issued.  Now, section 20(3) is telling in terms of the meaning of the term “new licences” and it provides that:

If, because of sub‑section (2), the Governor in Council is unlikely to grant the licences –

as defined, the wagering and gaming licences –

before the expiration of the term of 18 years of the licences held by the current licensee, the Governor in Council may, by Order published in the Government Gazette, approve the extension of the term of the current licences until the commencement of the new licences or for such shorter period as is specified in the Order.

As your Honour Justice Gordon picked up before, the unambiguous connotation – not just its denotation – the only connotation which can be given to the words “new licences” in that section are the licences which have been the subject of the application as dealt with in section 20(1).  They are the only kinds of licences to which “new licences” can refer.

Similarly, the composite term “current licences”, which appears a few words ahead, can only mean, can only connote, the current wagering and gaming licences.  There is no room for some broader definition.  So, it is at that point, we come to:

Division 4 – Entitlement of former licensee –

That term is defined – it is only the wagering and gaming licensee.  If we insert the statutory definitions into the section, it makes perfect sense.  On the grant of new wagering and gaming licences under the part, other than the first wagering and gaming licence and the first wagering licence and the first gaming licence granted to Tabco under this Act the person who was the holder of the wagering and gaming licences last in force – in this section called the former holder of the wagering licence and the gaming licence:

is entitled to be paid an amount equal to the licence value of the former licences –

former wagering and gaming licences under Part 2 –

or the premium payment paid by the new –

wagering and gaming licensee –

whichever is the lesser. 

The specific meaning not only works perfectly but the section, having regard to where it sits in the Act, really admits of no other connotation. 

FRENCH CJ:   Plugging in the definition of “licence” in section 3 into 21 – let us suppose we are talking about a wagering licence – so does that read “on the grant of the new wagering licence” under Part 2 - because it is a “the” in front of the wagering or the gaming licence – it rather seems to assume there is only one.

MS HARRIS:   Well, no, your Honour, they are conjoined licences. 

FRENCH CJ:   Yes.

KEANE J:   So it has to be both.

MS HARRIS:   So your Honour sees that ‑ ‑ ‑

FRENCH CJ:   Well, it has to be one, has it not?

MS HARRIS:   Well, no, they are two licences.

FRENCH CJ:   Yes, but we are talking about one of each species?

MS HARRIS:   Yes, your Honour, yes.  So, on the grant of those two conjoined licences – one wagering, one gaming – then the person who is the holder of the conjoined wagering and gaming licence last in force is entitled to be paid.

FRENCH CJ:   But we are only talking about one lucky winner.

MS HARRIS:   One lucky winner, your Honour.  That is right.  But, the scheme of the Act and, more importantly, the scheme of the section tells us that in other ways.  So if we look at the licence value, the way in which the licence value is to be calculated - and that appears in subsection (5) - your Honours see that the integers of the formula, which there appears, depend upon knowing amounts that have been invested in wagering events and amounts that have been wagered on gaming machines.  Your Honours see that, for example, in integer A.  Subsection (a) of that integer is:

the total amount invested in totalisators conducted by the holder of the former licences or an or an operator appointed by that holder on wagering events . . . 

(b)the total amount wagered on gaming machines of the holder of the former licences –

Similarly, as we move down page 85 of the bundle:

B is the sum of –

the total amounts wagered in a different period, and likewise (b), connected to amounts wagered on gaming machines.

FRENCH CJ:   When you move to the consolidation in 2003, you have lost the definition of “licence” and now you have a whole lot of specific licences, casino licence, et cetera, et cetera.

MS HARRIS:   That is why we have lost the definition of licence, your Honour, but we see that the meaning does not change upon the consolidation, and, with respect, Tabcorp has not sought to persuade your Honours that it did.  No part of its submissions was directed to showing that licence has lost its specific connotation in the translation from the Gaming and Betting Act into the consolidation.

When we come to the legislation, your Honour, despite the loss of the definition, the term cannot sensibly admit of any different meaning.  Integer C, before we move past the section, is tied to, in the case of (b):

the amount of the premium payment paid by the former licensee –

So it is looking forward to a period where this payment provision will be triggered again, and again it requires that one knows what the premium payment is.  Now, the premium payment is the thing which the applicant for the licence says “This is what I am prepared to pay” and the thing which they must pay in order to obtain the wagering and the gaming licences. 

In that sense, the formula makes sense because in offering the two alternatives, licence value and premium payment, we are comparing things which are broadly like for like, we are comparing apples with apples, because the outgoing licensee held something which is equivalent to the incoming licensee.  So the premium payment and the licence value, while they might not be mathematically the same or the same in terms of quantum, they are based on similar bundles of rights and so it therefore makes sense to build the formula around those two things.

Once you give the words “new licences” some generic meaning which is not tied to the wagering licence and the gaming licence which is issued under Part 2, the formula no longer makes sense, and we will see when we come to section 4.3.12 which picks up this formula holus bolus that it does not sit comfortably with Tabcorp’s argument about the gaming machine entitlements because no premium payment was made for those things, nor was it required by the legislation.  There is no such thing as a premium payment when used in conjunction with gaming machine entitlements.  All of these textual indicators in the 1994 Act keep driving it back to the words having a singular meaning.

Now, Tabcorp, in order to get around the specificity of the definition of licences, there is only one way out here and that way out is to say, well, the words in new licences mean something different that is divorced from the specific definition which is provided by the legislation.  That is the only way we can get around that if we want to assign a generic meaning to that term in 1994.

As my learned friend submitted this morning, “new” just means not previously existing, “wagering and gaming licence” that was not previously existing. Looking at it as a composite does not help to reveal some generic meaning from that phrase which is at odds with the clear definition or sentiment – expression, and the text of the part. Every time the word “licence” is used in the legislation, whether or not it is accompanied by an adjective such as “former” or “current”, it is used unambiguously to mean the wagering and gaming licences granted under the part. Tabcorp’s argument would have it that the one and only time it bears a different meaning is in section 21(1) and (2).

BELL J:   I am not sure that Tabcorp is saying that there is a different meaning.  I think the point that Tabcorp was making was the context of the 1994 Act was that there were only wagering and gaming licences, but I think the submissions respecting the composite phrase “new licences” were not conceded.  I do not understand it to have been conceded that there was, as it were, a change in meaning.

MS HARRIS:   This, your Honour, with respect, is the very question that Tabcorp’s submissions beg and they have declined, with respect, ever to tell the Court at what point this term acquired its generic meaning, whether it acquired it in 1994 when the legislation was first passed or, as some of its submissions have it, it acquired that generic meaning upon the passage of section 4.3.4A some time later.

FRENCH CJ:   Maybe it always had a generic meaning but it started out as a genus with two species and now it is a genus with more.

MS HARRIS:   So, your Honour, that must be the argument, that the connotation of new licences as deployed here was new statutory instruments not previously existing, the substantive operation of which is to authorise wagering and gaming activities.  Now, your Honours, we say that, with respect, when one has regard to the definitions and the scheme of the legislation, that is a bridge too far in terms of the connotation of those words.

In this legislation, the connotation and the denotation are co‑extensive and we are driven to that by the definitions, by the scheme of the Act, by the use of cognate terms in other sections. In section 20(3) the only connotation of new licences can be the wagering and gaming licences. That is the only possible connotation of that term in that section. So Tabcorp’s argument would require that we give that same term a different connotation where it appears in section 21(1).

So, your Honours, the short point is that the connotation of the word “licences”, whether accompanied by a preceding adjective or not, is only ever the specific wagering and gaming licences issued under Part 2, and the definitions make that clear.  The definitions tell us what the connotation of the word “licences” is.  They tell us what the connotation of the words “wagering licence” is.  They tell us what the connotation of the words “gaming licence” is.  They tell us what the connotation of the word “licensee” is.  It is inescapable, with respect, we say.  So, when we come to 2003, which is behind tab 7 – this is the consolidating legislation as enacted ‑ ‑ ‑

BELL J:   Did you say it is behind tab 7?

FRENCH CJ:   I think it is 8.

MS HARRIS: Sorry, no, it is tab 8; I beg your pardon, your Honour. I am so sorry. Now, this Act consolidated a number of different statutes with respect to gambling and they are all referred to in footnote 38 of our submissions. The question, uncomfortable though it is for Tabcorp, is whether the meaning of the words in this payment provision changed upon the consolidation, if we are accepting that the words had a specific connotation as originally enacted. Section 21 was re‑enacted as section 4.3.12, and that appears on page 383 of the bundle. The arrangement of the section has changed slightly because what was one single section has now been split into three.

So, section 4.3.12 – and your Honours might care to make a marginal note of the correspondence – deals with subsections (1) to (3) of section 21. So, 4.3.12(1) is the equivalent of section 21(1); 4.3.12(2) is the equivalent of section 21(2); 4.3.12(3) is the equivalent of section 21(3); 4.3.13 on the next page is the equivalent of section 21(5) and 4.3.14 on page 386 is the equivalent of section 21(4). As Mr Archibald rightly conceded this morning, there was no substantive change to the section. The only changes were referable to the redundancy of the reference in section 21 to “initial licences”.

So we see now in section 4.3.12 that the parenthetical reference to initial licences has disappeared.  In integer C of 4.3.13, which is on the bottom of 385, subsection (a) of integer C used to refer to “the initial licences”.  It now needs to refer back to the licences which had been granted under the 1994 legislation.  Other than that, there has been no substantive change.  So the State’s submission is that we start from the position that, as with consolidating legislation generally, the statute has picked up the old statute and consolidated it with others in the body of this new statutory vehicle.

But even if we ignore that history, we are driven to the same conclusions about the specificity of the connotation of new licences.  Can I take your Honours to the definitions, and perhaps before I do, remind your Honours that, as Mr Archibald pointed out this morning, Schedule 7, which is at page 412, deemed the wagering licence granted under the 1994 Act to be the wagering licence under Part 3 of Chapter 4 for the balance of its term, and likewise it deemed the gaming licence that had been granted under the 1994 Act to be the gaming licence under Part 3 of Chapter 4.

That is important for the definitions that we are about to come to, because they are framed in terms of licences granted under Part 3 of Chapter 4.  By reason of that deeming provision, we have to understand those definitions to apply to the licence that Tabcorp had been granted under the previous legislation.

The relevant definitions start on page 275 in section 1.3 of the Act.  Now, it is true that the word “licences” is no longer defined in the legislation and that is not surprising for the reason that your Honour Justice Bell, I think, or it might have been your Honour the Chief Justice, adverted to and was certainly adverted to by the courts below.  There are now myriad other licences, we count 16 referred to by the legislation, so it is not surprising that that particular definition has disappeared, but all the other critical definitions from the 1994 Act have been picked up and transposed into the consolidation.  So, on page 275, at the bottom of the page we see that gaming licence means:

the gaming licence granted under Part 3 of Chapter 4 ‑

Deeming provision means that that is Tabcorp’s gaming licence.  Page 277 provides a similar definition in respect of gaming operator’s licence which will become relevant when we consider Tatts tomorrow. 

Wagering licence, the definition appears on page 288 and it is tied to the wagering licence granted under Part 3 of Chapter 4.  Chapter 4 begins at page 377 and there are some additional definitions, one of which is extremely important.  Section 4.1.2 defines licensee to mean:

the holder of the wagering licence and the gaming licence ‑

Now, when we pick up the ‑ ‑ ‑

GORDON J:   That is only for this chapter?

MS HARRIS:   Indeed, your Honour.  That is right, and we rely on that, with respect, your Honour, so when we come to section 3.4.12 and the deployment of that term we are driven to pick it up, but the components of that definition, the holder of the wagering licence and the gaming licence, we know from the definitions in sections 1.3 that the wagering licence and the gaming licence are only licences granted or deemed to have been granted under Part 3.  Part 3 is headed:

Wagering Licence and Gaming Licence ‑

again the exclusive province of the part is the wagering licence and the gaming licence.  Division 1 deals with the authority conferred by the licences and your Honours see the heading there:

Division 1‑Authority of Licences ‑

Now, licences is not defined any more but the context is clear.  The only thing that that word can refer to is the wagering licence and the gaming licence which are the subject of the ensuing four sections.  Similarly, the heading of Division 2:

Grant of licences ‑

Not defined, but the ensuing sections make clear that the only thing that we can be talking about, as we would expect in Part 3, headed Wagering Licence and Gaming Licence, are applications only for licences of that kind, wagering licence and a gaming licence, as defined.

Now, section 4.3.5, again, headed “Application for licences.”  The shorthand term is used but it is clear that it must have the specific connotation.  We ask your Honours to note that at subsection (3)(c), again, the application:

must be accompanied by a statement of the premium payment offered by the applicant -

which engages the formula.  Your Honours will also note that, at times in that section, the section refers to the wagering licence, a gaming licence, and sometimes to “the licence.”  Again, it is clear that it can only connote those two licences.

Section 4.3.6 tell us the matters to be considered.  These sections mirror the provisions of the 1994 Act, dealing with the process by which someone might be granted a new licence.  They, again, make clear that that is not a certainty; it is a possibility, a prospect, if the statutory requirements are satisfied.  The process, as exposed in those sections, is that an application, having been made to the commission, the commission must then make a recommendation and the recommendation must not be made unless it is satisfied of the matters in section 4.3.6(1).  Then, having regard to that proscription, 4.3.7 requires the commission to determine whether or not to recommend the grant of a licence and to notify the applicant accordingly.

FRENCH CJ:   Well, we are still in a world here in which wagering and gaming licences can be granted.

MS HARRIS:   Yes, your Honour.

FRENCH CJ:   We are just replicating the provisions of the 1994 Act in relation to them.

MS HARRIS:   That is right, your Honour.  We are still in a world where they can be granted.  But, your Honour, it is important to understand this context so that then we understand the reason for 4.3.4A and where it fits into this legislative schema because if we read the Act as it stood in 2012, without the benefit of this learning, then 4.3.4A becomes harder to reconcile because we have provisions sitting here saying, “You can apply for a licence”, and 4.3.4A saying, “No such licence can be granted.”  If one did not have regard to this history that might not make a lot of sense.  Once one has had regard to this history and the genesis, the provenance, of 4.3.4A, it makes perfect sense.

We note in 4.3.7 a submission was made to your Honours that the shorthand term “licence” is never used, except when it clearly references in the same section the wagering licence and the gaming licence.  Now, 4.3.7 is an example of where there is no reference to the wagering licence or the gaming licence.  The only references in the section are to “the licence”, “the licences.”  We know what it is meant; it is inescapable.  It can only be those ones.

Similarly, with the heading of subsection 4.3.8, the grant of licences, and several things to note about this section, they can only be granted to the one person, so both of those licences must be granted to the one person, they are conjoined, and they can only be granted by the Governor in Council on the payment by the applicant of the premium payment.  Again, the premium payment is engaged by the formula in 4.3.12 to which we are about to come.  In 4.3.8(2) again, says:

The Governor in Council must not grant the licences unless the Minister –

is satisfied of certain things.  That is where section 4.3.9 again becomes important.  Section 4.3.9 makes no mention of wagering licence or gaming licence but it is inescapable that that section is only referring to the wagering licence and the gaming licence. 

FRENCH CJ:   Well, in a sense, once you have said it for one section you have said it for all.  I mean, your proposition is based upon the provenance and application of this whole chapter. 

MS HARRIS:   Indeed, your Honour.  It drives a singular meaning which is denied by Tabcorp.  Tabcorp supported its generic meaning by randomly – not randomly but selectively picking textual indicators within the part which could when viewed in isolation support its generic meaning.  What we urge upon the Court is that taking that isolationist approach is not the correct approach to discerning the meaning of what then appears in 4.3.12.  The observations about reading legislation as a statement of the will of Parliament by looking at the entire effect of the Act become important.  You cannot just pull little bits and pieces here and there and say, well, that in some places the words “under this part” were used so it is inevitable that Parliament would have used it if they had meant 4.3.12 to have a specific meaning. 

The entire scheme of the legislation drives us to conclude that the connotation of licences and new licences is the wagering licence and the gaming licence issued under Part 3 of Chapter 4.  The point we make about 4.3.9, your Honour, is slightly different or at least additional to that.  It includes in subsection (2) the term “current licences” and “new licences”.  Inescapably, those are the wagering licence and the gaming licence.  In the first case, the current licence is the one that is due to expire.  The new licences are the ones which have been applied for but have been held up because of a section 4.3.8(2) problem, the Minister not being satisfied.

So new licences in 4.3.9 can only mean the new wagering and gaming licences.  Similarly, 4.3.10, the word is used shorn of the adjectives, but we know what they mean.  So, to now, the part has addressed and addressed only the wagering licence and the gaming licence issued under the part.  Then we come to Division 3 and it tells us what happens when that licence expires.  It can only be read as what happens when the wagering licence and the gaming licence expires.  It is that natural progression.

But by the time we come to section 4.3.12, the word “licence” or “licences” has been used no less than 43 times and in each case inescapably with that singular connotation of wagering licence or gaming licence.  On 26 of those occasions it has been used without either of those words in front of it, again inescapably with that singular connotation.  By the time we get to 4.3.12 it has been used three times with some other adjective in front of it – new, former, current – on each of those occasions with that singular connotation.

So, even though the words “under this part” do not appear, it is impossible to get to 4.3.12 and think that the words “new licences” mean anything other than new wagering and gaming licences issued under Part 2 – Division 2 of Part 3 of Chapter 4.  So Tabcorp’s construction of this section requires one to take a selective approach to the connotation of the word “licences” as it appears in this part. 

Not only does it require us to take a selective approach to the connotation of the word “licences” in this part, it requires us to take a selective approach to the connotation of that word in this very section.  Can I demonstrate what I mean by that?  According to Tabcorp, when we get to 4.3.12(1), the first reference, “On the grant of new licences”, the word “licences” means these generic authorities.  The section then continues:

the person who was the holder of the licences last in force . . . is entitled to be paid –

Now, as Mr Archibald confirmed to your Honour the Chief Justice this morning, that is only a reference to someone who is a holder of a wagering licence a gaming licence.  They are -

entitled to be paid an amount equal to the licence value of the former licences –

again, specific connotation – the wagering licence and the gaming licence –

or the premium payment . . . whichever is the lesser.

So, in order for Tabcorp’s argument to succeed, that word “licences” must bear a different connotation depending upon where in that section it appears.

Now, this Court has been very clear about the ordinary principles of construction that require one to give cognate expressions in a statute the same meaning unless the context otherwise appears, and we have referred in our submissions to what fell from this Court in Selig v Wealthsure and to that we would add what was said in Kline, which is in our supplemental list of authorities.  I do not need to take your Honours to it.  The reference is Kline v Secretary to the Governor‑General (2013) 249 CLR 645 at 660, paragraph 32, citing what was said by the majority in the Registrar of Titles v Franzon (1975) 132 CLR 611 at 618.

Now, the cases make clear that the context can sometimes displace that presumption of cognate meaning, but the reason I have taken so much trouble in taking your Honours to the scheme of the Act is that the context does not displace that at all.  When we look at the terms of the Act, there is simply nothing to indicate a generic meaning.  So we say really that Tabcorp’s submissions have inverted the inquiry.  Tabcorp’s submissions have been directed towards identifying reasons why it might be possible to read “new licences” as having a generic meaning.

That is not the inquiry.  The inquiry is for what is the meaning which is exposed by the Act?  What is the natural and ordinary meaning of these words?  As the Court of Appeal found, the natural and ordinary meaning of these words is new wagering and gaming licences issued under the part and there is nothing in the context or text to displace that meaning and to drive us somewhere else.

BELL J:   Both the Court of Appeal and the primary judge saw Tabcorp’s interest as a valuable thing and the scheme introduced by the 2008 and 2009 amendments as expropriating that valuable thing and for that reason the Court of Appeal as well as the primary judge took into account those principles of statutory construction that would incline the court to look for a meaning even if it were perhaps a strained meaning that would not produce that result, namely expropriation of a valuable interest. 

Now, when you come to Division 3, two matters that are raised against you by Tabcorp are firstly, you can see Division 3 as concerned with something quite discrete from the earlier divisions which relate to the regulation of licences.  This is dealing with the entitlement of a former licensee on the grant of new licences.  “New licences” in its generic meaning, for which Tabcorp contends, it is suggested can sit perfectly comfortably with the identification of “the holder of the licences last in force”, which is a composite expression, and which identifies just what it says.

MS HARRIS:   So there are a number of things we need to say about that, your Honour.  The first thing is that one is not – the very reason we are concerned to take the Court to the legislation prior to 2008 is that the meaning of the legislation as it existed before that time falls to be determined not against the background where the State had decided to take a different course in regulating gaming with the consequence that there would not be a payment.

We see that as, with respect, your Honour, one of the very central vices of the argument against us and some of the reductive reasoning that there appears, it is reductive.  To use the benefit of hindsight, as it were, and say, well, in 2008 the government took a step which had the effect of denying Tabcorp any payment entitlement, and then to use that to construe the legislation as it has stood from 1994.  The payment entitlement, as I have sought to demonstrate, your Honours, has not changed one iota during that period.  So, particularly when we hear Tabcorp say, you have to look at the purpose of the payment provision in order to determine its meaning, that purpose is the one that effected the introduction of this section into the legislation. 

Now, the principles of legality that Parliament is not to be thought of as taking away a valuable right, have no application to the construction of section 21 as enacted because that was a provision which conferred an entitlement and Parliament was entitled to confer that entitlement in whatever terms it saw fit. When we read the Act ‑ ‑ ‑

BELL J:   I think what we are looking at is the Act now incorporating as it does section 4.3.4A and we are looking at how that provision sits with the retention of section 4.3.12 ‑ ‑ ‑

MS HARRIS:   Yes.

BELL J:    ‑ ‑ ‑in a way that harmoniously gives effect to all the provisions and that takes account of the principle that Parliament is not to be taken to expropriate a valuable interest without doing so with unmistakeable clarity.

MS HARRIS:   So let me now come to the legislation as it stood in 2012 post those amendments, but against the background where we say we have established with unmistakeable clarity that the words used in 4.3.12 had a specific connotation, so that when Parliament came to make the amendments in 2008, it was making amendments to a statute in which section 4.3.12 had that specific connotation in its application to new licences.

Your Honour, with respect, that is why Tabcorp has been driven in some of its submissions – they were not so prominent today but some of its submissions in writing and below – to say 4.3.4A had a transformatory effect on 4.3.12.  It changed that definition – changed the connotation from a specific one to a generic one because that is the only way that you can read the part so as not to deny the right, as it were.

So the legislation post‑2008 is behind tab 9 and the first thing we see in 4.3.12 is that it has not changed one iota.  So, if the meaning of “new licences” has been expanded by 4.3.4A so as to preserve this entitlement, then it has happened by a side wind.  It has happened tacitly. 

The only things that occurred upon the 2008 amendments were the insertion of section 4.3.4A, which your Honours see at 723 and an amendment to section 4.3.33, which your Honours see at page 738.  Now, the amendment to section 4.3.33 is actually an important one because it tells against Tabcorp’s construction of the legislation post‑2008.  The change to 4.3.33 is to be found in subsection (3) and before we get to it, it is worth understanding the place that 4.3.33 has in the legislation.  It sits in this Division 7 headed “Disciplinary Action and Cancellation”. 

The division deals with a situation where the holder of the wagering licence and the gaming licence has committed some act that justifies disciplinary action under 4.3.31 or the cancellation of both licences under 4.3.32.  So, it governs misconduct by the licensee.  Section 4.3.33 then allows a temporary licensee to be appointed if the licence is cancelled for misconduct or one of the other disciplinary grounds under the preceding sections.  That will become important for reasons to which I will come momentarily.  The change that was made to subsection (3) was to insert the final words:

a wagering and betting licence under Part 3A.

So that the section now provides that a temporary licensee may be appointed and its licence would be terminated by the grant of a wagering and betting licence under Part 3A.  The significance is that where Parliament in 2008 wanted to refer to some other licence external to Part 3 of Chapter 4, it did so in terms.

So that if it had wanted to expand the circumstances in which 4.3.12 could be triggered to include other kinds of licences, including a wagering and betting licence under Part 3A, it knew how to do it because it did it in section 4.3.33 in this very series of amendments.  So the point we make about that is having left 4.3.12 untouched with its erstwhile specific connotation, Parliament is not to be taken to have by a side wind expanded the meaning of the term “new licences”.  The former wording of the term appears at page 408 of the legislation bundle.  I do not need to take your Honours to that at the moment.  Having not chosen to touch 4.3.12, the legislature introduces 4.3.4A, which says that it:

applies only with respect to the wagering licence and gaming licence that were issued –

to Tabcorp in August 1994 –

and does not authorise the grant of any further wagering licence or gaming licence –

but it does not prevent the appointment of a temporary licensee under 4.3.33.  Now, against the legislative history to which I have taken your Honours, a legislative scheme where the words “new licences” in 4.3.12 had an inescapably specific connotation, the operation of 4.3.4A on that section is irresistibly clear.  Parliament has inserted a section that in terms prevents the issue of the very licences, the only licences, which can trigger the payment entitlement. 

I made some submissions to your Honours before lunch about why it is in a sense a distraction to go down the path of working out whether 4.3.4A took away a right or not because the fact is that these licences have not been issued.  So that if 4.3.12 bore the specific meaning that it always had from inception, no such licences have been issued and so no payment can be made.  That is the end of it, I am afraid.  The section has not been triggered, and so asking ourselves what the effect of 4.3.4A is in terms of whether it removed a right or not is, with respect, somewhat unhelpful.

BELL J:   Well look, even if it is beside the point, could you explain the function of 4.3.4A as it operates with 4.3.12, taking into account the Parliament’s choice to leave 4.3.12 in the scheme?

MS HARRIS:   Yes, your Honour.  One of the reasons I resisted your Honour’s question this morning about the Court of Appeal’s characterisation of the legislative technique is that I do not presume to look into the mind of Parliament but can I explain to your Honour why it was an appropriate technique to use to achieve the effect that we say it has achieved.

So, with specific reference to 4.3.12, as I have just submitted to your Honour, if Parliament was taking the section as it found it, with the specific connotation, then the operation of 4.3.4A on that section was to deny the possibility of such a trigger.  But more broadly with respect to the part, the function of that section is to bring about a staged sunset, if you like.

So, after 4.3.4A is inserted, some provisions of the part have no more work to do as of that moment and we have annexed to our submissions a list of the ones that had no possibility of a continuing operation, so 4.3.6 to 4.3.8 is an example of those things.  So, 4.3.4A’s operation on those sections was to deny them of any ongoing operation.  The second thing that it did ‑ ‑ ‑

GORDON J:   Is that right in relation to appointment of temporary licensees?

MS HARRIS:   So, your Honour, the second thing that it did was to limit the operation of some of the sections so that they only applied to temporary licensees and, again, we refer to the annexure to our submissions.  Some sections, some parts of 4.3.5, for example, can continue to apply but only to temporary licensees so the provision has a modifying effect on those sections, pending expiry of Tabcorp’s licence.  Then the third thing that the section does is to put a full stop on the part at the point when Tabcorp’s licence is expired, to bring the whole part to an end at that point.

Now, your Honours, it is true, the Parliament could have chosen another way of doing this.  It could have repealed 4.3.6 through to 4.3.8 and 4.3.12 through to 4.3.14, and it could have modified 4.3.5 and other sections, 4.3.9(2) so that they only apply to temporary licensees, and it could have inserted a further section that says, and everything else will be repealed as of the expiry of Tabcorp’s licence or they could have come back upon the expiry of Tabcorp’s licence and repealed the part.  They could have done all those things, that is true, your Honour, but they did not.  Instead, they inserted a single section which did all of those jobs.

BELL J:   With the result that Division 3 is redundant.

MS HARRIS:   With the result that Division 3 can no longer operate like other parts of the part.  Tabcorp has not gainsaid the proposition that other sections in the part can no longer operate as of the commencement of 4.3.4A.

KIEFEL J:   What you are saying is it is not unintentional redundancy?

MS HARRIS:   It is not unintentional redundancy, your Honour.  It is very much intentional redundancy because there were other ways to go about it.  I took your Honours to the budget papers before lunch that showed that the government wanted to move away from this duopolistic regime.  They made a deliberate decision about that.  So what we see in the legislative amendment which ensues and which Tabcorp relied upon in its case below is the legislative manifestation or the legislative implementation of that very intention to move away from the former regime, to bring it to an end.

Now, as we sit here, each of those sections remains in the legislation and Tabcorp, of course, has never denied, nor can it, that now all of those sections have become redundant by force of section 4.3.4A.  Each section now has no work to do.  But it achieved that result in a staged fashion and it operated – it took the legislation as it found it and unless Tabcorp can find something in 4.3.4A which had an expansionary impact on 4.3.12 which broadened the connotation of new licences, then the section could not be triggered by what then ensued.  So we circle back to the proposition that it is not a case of the State having taken a right away sotto voce.  The right was one which on the face of the legislation could only be triggered by the very things Parliament said could no longer be issued.

FRENCH CJ:   It has removed the condition, satisfaction of which would enliven the entitlement.

MS HARRIS:   I beg your pardon, your Honour?

FRENCH CJ:   It has removed the condition or the possibility of the condition, satisfaction of which would enliven the entitlement.

MS HARRIS:   Indeed, your Honour.

KEANE J:   And that condition was never guaranteed, that is to say, from 1994 there was not a provision that said there shall always be a gaming and operating licence.  The statute provided for the possibility of the grant and then 4.3.4A said no more possibility.

MS HARRIS:   That is right, your Honour.

KEANE J: And to describe the commercial purpose of section 21 in the 1994 Act or 4.3.12 in this Act as a provision for reimbursement upon the grant of new licence is a bit simplistic, is it not, because the commercial purpose was actually to ensure that if the former licence holder was not the new licence holder, there would be a payment.

MS HARRIS:   If the former licence holder was not the new licence holder there would be a payment, but certainly – so the section is ambiguous in that respect as it concerns Tabcorp.  It is unambiguous in that respect as it concerns Tatts.  Tabcorp would say the way it was to be construed is, “We got our money so long as a new one was issued, regardless of whether it was issued to us”, and that was a matter of debate below.  The purpose of the Act was satisfied by the presence in the legislation of the payment entitlement.

KIEFEL J:   It is about appearance, is it not?  The original purpose was to overcome the need to amortise the payment made which was probably written off in the books anyway.  This is to give an appearance.  It may well be misleading.  It might be misleading to those who read it who will think that it is somehow guaranteed, but it is not, it is set up on a circumstance which is capable of removal.

MS HARRIS:   And that is the clear scheme of the legislation which indicates that there is no guarantee that these licences will be issued.

FRENCH CJ:   Nevertheless, it was thought sufficiently significant to include in a prospectus directed to a range of people, none of whom could hold more than five per cent of the shares, as I recall.  Is that right?

MS HARRIS:   That is right, your Honour, as was the Treasurer’s letter which made very clear that this regime was not a forever regime, necessarily, and that future governments may change their minds including with respect to this very thing – this very payment entitlement. 

BELL J:   Well, that must always be.  The question is whether it has been done with sufficient clarity.  Now, Tabcorp does identify a possible purpose for 4.3.4A.  Tabcorp says what it does is to preserve the part in the first limb of sub (1) and it operates in the second limb to ensure that the regime does not inure for the benefit of subsequent changes of licence.

MS HARRIS:   That is right, your Honour.

BELL J:   Well, what is the response to that?

MS HARRIS:   I am glad your Honour raised it with me.  So, neither of those hold any water, with respect.  So, the first point made this morning was that 4.3.4A is needed to ensure that there was no overlap between the old regime and the new regime.  That is accomplished by different sections, not by 4.3.4A, and can I take your Honours to those.  The first one is at page 754 of the bundle.

GORDON J:   What section is that, Ms Harris?

MS HARRIS:   Section 4.3A.8.  So, it is page 464 of the print and it is subsection ‑ ‑ ‑

BELL J:   I am sorry, what subsection, again?

MS HARRIS:   Section 4.3A.8.

BELL J:   Thank you.

MS HARRIS:   So, subsection (2) – taking a step back – Part 3A of Chapter 4 is the one that concerns the new wagering and betting licence, so the successor.  It provides, firstly, that:

If the Minister grants a licence application, he or she must issue a wagering and betting licence to the applicant ‑

Then, secondly ‑

A wagering and betting licence cannot be issued that has effect, otherwise than as provided by section 4.3A.12, at any time while the wagering licence and the gaming licence are in effect under Part 3 of this Chapter.

So, that is the thing that stops them operating concurrently.  You do not need 4.3.4A to do that.  So that was introduced at the same time as section 4.3.4A.  Your Honours see that from the marginal note, in 2008, and then the second provision is section 3.4A.1(1)(c), on page 653 of the bundle.  This is the part of Chapter 3 that is directed to gaming machine entitlements:

On and after the day declared by the Minister under subsection (2) (the gaming machine entitlement declared day), the conduct of gaming in an approved venue is lawful only if –

. . . 

(c)no gaming in that venue is conducted concurrently under that gaming machine entitlement and a gaming licence or a gaming operator’s licence.

So section 4.3.4A was not required to ensure that there was not any overlap between the new regimes.  There could not be for those reasons.  In practical terms, there could not be anyway because we had moved from a situation where machines were operated by the gaming operator to a situation where the machines were operated by the venues but those statutory provisions put the matter beyond doubt.

Now, the second part of the submission was curious in a sense because it was suggested that the purpose of 4.3.4A was to ensure that there was only a single iteration of the payment under 4.3.12.  Now, at this point we say, “Well, if that was the purpose then why would not Parliament have said so more clearly”, but it does not matter because it cannot do that on Tabcorp’s construction of the section anyway.

If we look at 4.3.12 and we give new licences the meaning that Tabcorp ascribes ‑ that is, this ambulatory meaning that will invoke gaming machine entitlements ‑ on the grant of new generic licences the person who was the holder of the licences last in force – now, the person who was the holder of the licences last in force is Tabcorp and by virtue of 4.3.4A it will only ever be Tabcorp:

is entitled to be paid an amount equal to the licence value of the former licences or the premium payment paid by the new licensee, whichever is the lesser.

Now, if Tabcorp is right about the generic meaning, then every time new licences, new gaming machine entitlements are issued, the entitlement is triggered because Tabcorp is the only person who will ever fit the description of the holder of the licences last in force.  As Mr Archibald said to his Honour the Chief Justice this morning, “The holder of the licences last in force is the holder of the wagering and gaming licences.”  So 4.3.4A does not achieve that single iteration either.  There are numerous other problems with the generic connotation.  One of them arises with respect to the appointment of temporary licensees.  I took your Honours to that provision earlier, 4.3.33, it is at page 738.

Now, if the words “new licences” in 4.3.12 have a generic meaning they will pick up the temporary licence.  So, upon the issue of one of these temporary licences 4.3.12 would have to be triggered because it is statutory instrument not previously existing, the substantive operation of which is to authorise wagering and gaming activities.  That is precisely what a temporary licence is.

So that not only tells you why new licences cannot have that ambulatory meaning because it would have the effect that upon the issue of a temporary licence when the wagering and gaming licences were cancelled for misconduct the outgoing licensee, who is losing its licence, for misconduct, will get a payment, it also reinforces the specificity of the term in 4.3.12.  The only kinds of licences that can trigger the payment entitlement are ones which have been issued under the preceding sections of the division. 

KIEFEL J: Before I asked you a question about whether it could be said that at the outset what is in 4.3.12(1) then section 21 was a matter of mere appearance in relation to whether it could be said to have been seriously intended that there be a repayment, could we just look at that again?

Under the scheme of what is in subsection (1) common to the previous scheme, the new licence is the source of the funds to effectively repay the initial licence fee. That is clear enough. If the provision is not for mere appearance, at the time when section 21 was first passed, why would it matter – sorry, when it was first passed, it would be anyone coming along and paying the fee for what Tabcorp had had which would permit Tabcorp to recoup its initial fee.

MS HARRIS:   Yes, your Honour.

KIEFEL J:   So, it may be discerned that Parliament was not intending to mislead anyone about whether they would be repaid, it just wanted it to be revenue neutral at a time when it was thought that there was likely to be someone holding licence in this new duopoly that had been created.

MS HARRIS:   So, I think, if I am engaging with your Honour’s question, it is certainly the case that when we look at the prospectus, when we look at the scheme of the Act in 1994, the characterisation in the budget paper is an apt one, that what was envisaged ‑ ‑ ‑

KIEFEL J:   No, I am just looking at the provision itself.  It is predicting that there will be a new licence fee paid.

MS HARRIS:   If the payment comes to pass, it will be because a new licence fee has been paid.  That is the way I put it.

KIEFEL J:   Yes.

MS HARRIS:   The payment entitlement will arise if a new licence fee has been paid, in other words – and the reason I was going to the budget papers is because it says that the payment entitlement and the scheme generally was predicated upon the continuation – the rolling over of this current duopolistic scheme.

KIEFEL J:   Quite.  But the scheme then hinges upon payment, not upon the type of licence.

MS HARRIS:   It hinges upon both, your Honour, because if, for example, the provision had said, “Upon the expiry of Tabcorp’s licence it will be paid $520 million”, then I think I could ‑ ‑ ‑

KIEFEL J:   To put it in the way in which you have spoken, talking about when it was first passed, it would have been a distraction to have referred to any other kind of licence.  It was always predicted to be the equivalent of what Tabcorp was holding.

MS HARRIS:   Well, not just predicted, but that was built into the formula, your Honour.  You might remember that I took you to the formula for the determination of the licence value.  So the payment is either the licence value or the premium payment, and the licence value is, according to the formula, calculated exclusively by reference to the wagering and gaming revenue which has been raised using these licences, and the premium payment, as picked up from sections 4.3.5 and 4.3.8, is the one which has been offered and paid by the person who is issued with the wagering licence and the gaming licence.  So it is not simply a matter of any old licence will do.

KIEFEL J:   I understand what you are saying.  They are purely textual, and that is not to denigrate textual considerations, but if one is looking at the intended operation of the provision, the important fact is that there is a payment made.

MS HARRIS:   But the problem is that it is not – it is not just that a payment is made.  In effect we have to be swapping like for like because otherwise there is – unless we are comparing apples with apples ‑ ‑ ‑

KIEFEL J:   Why?  Because the repayment is meant to – if “on the grant of new licences” is code for when a payment is made sufficient to enable the payment to be made to the former licensee, why does it matter what kind of licence if things have changed in the meantime?

MS HARRIS:   Well, it is not so much that, your Honour, but if what it represents is something which has a different value to the wagering and gaming licence, then ‑ ‑ ‑

KIEFEL J:   It could.

MS HARRIS:   That is right.  Then the formula does not really make sense any more and the alternative between the licence value and the premium payment does not make sense any more, because you are no longer comparing like for like.

KIEFEL J:   But you would be comparing like for like if you talked about – if you read “on the grant of new licences” in the context of payment as being payment sufficient to enable repayment, because that is its obviously intended operation.

MS HARRIS:   Well, if those words were there - you see, your Honour, they did not say that, they said the premium payment and, if we are talking about something that is not the wagering and gaming licence, then who knows what the quantum of that payment might be.  If we do not any definition around the licences, not wagering and gaming licences but something else that might be issued at the end of it ‑ ‑ ‑

KIEFEL J:   But there was not – there was always the possibility, as there always is with legislation – but when this was first enacted, as you have said, there was no uncertainty about the kind of licences that were necessary and what would be considered to be the replacement.  Put aside difficulties.  We are just talking about what happened when it was first enacted.  Put aside prospective problems that now face us about what happens when a new regime is brought in.  But that difficulty would not have been present if one had construed the provisions on the day after they were enacted. 

On the day after they were enacted it would have been said, if there is a new licence of the same - or equivalent licences, because that is all we know, because that is all that can authorise gaming, and out of that will come money, then you can have your money back.  We have received the same money.

MS HARRIS:   So, your Honour, if we were just talking about this at a level of commercial abstraction which said all the State wanted was to make sure that it had a source of funds to pay the old gaming operator, then there might be something in that but I still say to your Honour that it is difficult to conceive because the scheme of the section itself assumes that what comes in is the same thing that goes out.  So we have the licence value which is backward looking ‑ ‑ ‑

KIEFEL J:   Well, it is at least as much as.

MS HARRIS:   Indeed, your Honour, and the only way to have a level of comfort around that is if you are swapping like for like, really swapping like for like, but then ‑ ‑ ‑

KEANE J:   For the new licence to have the licence value of the former licence, it has to be calculated in terms of 4.3.13 ‑ ‑ ‑

MS HARRIS:   Indeed, your Honour.

KEANE J:   ‑ ‑ ‑ and that means you look at all the profit generated by the activities authorised by the former licence and as to the other possibility, that is the premium payment, that has to be an amount that has been put in an application under 4.3.5(3)(c) and it presumably, as a matter of commerce, is going to be close to that, because if it is not ‑ ‑ ‑

MS HARRIS:   Because they deal with the same things.

KEANE J:   ‑ ‑ ‑ because they are valuing the same things, and if it is not then it is not likely that the application will be granted because it will not reflect the commercial value of the activities that will now be authorised by it.

MS HARRIS:   With respect, your Honour has put it obviously more felicitously than I was able to for your Honour Justice Kiefel, but the point of the formula in picking up those matters in the integers, the backward‑looking formula and the forward‑looking premium payment assumes that we are swapping like for like, a bundle of rights which is the same.

GORDON J:   It is not an assumption; it is a direction from the statute.

MS HARRIS:   Well, your Honour, that is our case, with respect. 

GORDON J:   I think I put to Mr Archibald, if you take the second‑last line in 4.3.12, “licensee” for this part is designed to be the holder of the wagering and gaming licence, so it is the premium payment paid by the new holder of the wagering and gaming licence under 4.3.5 and 4.3.8.

MS HARRIS:   Yes, precisely, your Honour, that was the point of substituting those definitions into the section.  It becomes inescapable, your Honour.  We can contort the language in all sorts of ways to conceive of ways in which it could justify a generic meaning but that is not the task of statutory construction and the task of statutory construction here is, with respect, made a lot easier than in other cases where we are supplied with definitions which set some parameters around connotation which are, with respect, inescapable.  Did your Honour Justice Kiefel have a question about the position prior to 2008?

KIEFEL J:   No, I think I was interested to hear your argument about the intended operation of the section when it was initially enacted and I think you have done that.

MS HARRIS:   I think the point that your Honour raised with me was whether this was all about appearances, but ‑ ‑ ‑

KIEFEL J:   That is because one wonders what level of certainty is left in it really about what was intended.  The answer is not much.

MS HARRIS:   Well, you see, as enacted, your Honour, and we keep having to drive back to what did the legislation mean when it was passed, and when it was passed it represented the government then intention both specifically in terms of the payment entitlement and more broadly with respect to the continuation of the existing regime, and we see that from the Treasurer’s letter ‑ ‑ ‑

KIEFEL J:   You probably meant Parliament’s intention as well.

MS HARRIS:   What did I say, sorry?

KIEFEL J:   You said government’s intention.

MS HARRIS:   Well, indeed, your Honour, because it was manifest in the statute ‑ ‑ ‑

KIEFEL J:   One can see that the government was driving it but we are concerned with parliamentary intention.

MS HARRIS:   Well, yes, that is right, and it has been – it was clear at least from the Treasurer’s letter and the prospectus that what was contemplated was that at the end of Tabcorp’s licence public tender or some other mechanism ‑ ‑ ‑

KIEFEL J:   Quite so, and this was to be put before the Parliament.

MS HARRIS:   Indeed, and so, your Honours, I do not need to take your Honours to it now but your Honours might care to note that prior to the 2008 budget paper, budget papers laid before the Parliament contemplated that the payment entitlement would be enlivened upon the issue of new wagering and gaming licences.  That was the then current expectation that the existing regime would continue.  So it was not all just window dressing – that is at page 304 of the appeal book.

Once the government changed – as the Treasurer’s letter said it might – about that regulatory environment, about that regime, all bets were off in terms of the payment provision.

KIEFEL J:   Does that mean, though, that in reality Tabcorp would have been advised to write down the licence fee in its books of account?

MS HARRIS:   Well, at that point, I think it did – as at 2008, I believe it did.

KIEFEL J:   But, on the basis of this.

MS HARRIS:   On the basis of the government‑stated intention not to issue any more licences?

KIEFEL J:   On the basis of this statutory provision.

MS HARRIS:   Well, in a sense, it did not need to wait for the statutory provision because the Executive had said we will not issue any more of these licences.

FRENCH CJ:   They already had their fingers crossed in front of them when they made promise back in 1994.

MS HARRIS:   Well, your Honour says that and I think the reason ‑ ‑ ‑

KEANE J:   In 1994 they never promised there would always be a licence.  In 1994 they said if there is a licence these things will happen.

MS HARRIS:   Your Honour Justice Keane has taken the words out of my mouth.  If they had wanted to promise that there would be a payment, they would have done so.

FRENCH CJ:   Yes.  I am repeating myself - one wonders what was the point of putting it in the prospectus at all.

KEANE J:   Well, it gave an assurance, did it not?  It gave an assurance to the people who took up the prospectus that while this particular model of regulation operated, that is to say, while you had this duopoly, Tabcorp would own its licence and if someone else obtained the licence, Tabcorp would be paid under the section.  So that what it was getting was an assurance that if the licensing regime continued but someone else had the benefit of the licence, Tabcorp would, nevertheless, be paid.

MS HARRIS:   It was like an underwriting.

KEANE J:   But a limited underwriting.

MS HARRIS:   Yes.

KEANE J:   A limited underwriting on the footing that there is not a guarantee that there will always be this duopoly.

FRENCH CJ:   Would you like to chime in?

MS HARRIS:   Sorry, your Honour?

KIEFEL J:   Would you like to add anything?

MS HARRIS:   No, I am happy, actually, at this stage.  We have to remember that Tabcorp had enjoyed a licence for 18 years and we find ourselves a bit bewildered by some of the statements made below about the unfairness.  But be that as it may, it does not matter really.  The question here is about the construction of a statute.  Has it been triggered or has it not? 

The reality for Tabcorp is that it was always structured in such a way that it would only get a payment entitlement, that that entitlement would only arise if and when one of these new licences were issued.  That is the reason we have referred in our submissions to the WA v Temwood Case where similar observations were made, particularly by his Honour Justice McHugh about the right in that case.  It only became a right at the point when certain things happened.  In this case, those certain things have not happened.

BELL J:   Can I inquire – in 4.3.12(1), the reference to the:

premium payment paid by the new licensee –

do we find “premium payment” defined in an earlier division or is it used in some more general sense there?

MS HARRIS:   So the premium payment is – it is not the subject of a stand‑alone definition, as it were, but it is used so as to connote the premium payment that is payable by the wagering, the applicant for the wagering ‑ ‑ ‑

BELL J:   I understand that is your submission but do we find somewhere in the Act, perhaps in dealing with the application for a wagering or gaming licence, reference to a premium payment?

MS HARRIS:   That is the submission I am making to your Honours.  Section 4.3.5 is the – I beg your pardon, your Honour?

BELL J:   I am sorry, yes, I see, in subsection (3)(c) a statement of the premium payment but it is not ‑ ‑ ‑

MS HARRIS:   Then, your Honour, in 4.3.8 the Governor in Council can only grant the wagering licence and the gaming licence on payment by the applicant of the premium payment ‑ the premium payment.

BELL J:   Yes, well, now what about the scheme in relation to Part 3A licences?

MS HARRIS:   The gaming machine entitlements?

BELL J:   You took us earlier to – is it a wagering and betting licence or ‑ ‑ ‑

MS HARRIS:   Now, I do not believe it is styled as a premium payment, your Honour.  Certainly in relation to gaming machine entitlements the fee is not styled as a premium payment.

GORDON J:   It is in terms of 4.3A.13 being a premium payment for the wagering and betting licence.  But, as I thought you had accepted earlier, that does not get picked up by 4.3.12 because of the definition of “licensee” for the purposes of the earlier part. 

MS HARRIS:   Yes, your Honour, and your Honour corrects me properly.  You see, the only – Tabcorp needs to show that the wagering and betting licence plus the gaming machine entitlements all together constitute the new licences under 4.3.12.  Now, there is a premium payment payable for the wagering and betting licence but there is no premium payment payable for the gaming machine entitlements. 

BELL J:   That is your apples and oranges argument?

MS HARRIS:   That is part of my apples and oranges argument which is both a substantive one and then a definitional one.  With respect, I embrace what her Honour Justice Gordon has said about the problem being that “licensee” has this very specific meaning and the premium payment is won by a licensee.  “Licensee” is defined in 4.1.2.

BELL J:   I understand that but, plainly enough, if the generic definition were accepted then that would flow on to the reference to the licensee in 4.3.12(1) paying the premium payment because you would be speaking of the new licence, the new licence would refer to a licence under the part and so the definition – the reference to licensee as defined for other purposes in the part would not apply.  I am not suggesting that is the correct construction but it is the construction taken against you. 

MS HARRIS:   Look, it has to be, your Honour, so the word “licensee” appears twice before the words “new licences” both in the division heading and then the heading to the section.  We say it is inescapable that it picks up the definition in 4.1.2.

BELL J:   Yes, I understand.  So, in effect, the construction argument works the other way, that by the time you get to new licences, you know that you are talking about wagering and gaming licences. 

MS HARRIS:   Now, your Honours, I have not dealt with the notice of contention and my allotted time is almost up.  Can I refer your Honours to what appears in our submissions at paragraphs 41 to 49?  I do not need to take your Honours to it now, but can I give your Honours a reference to page 104 of the prospectus, which is page 263 of the appeal book that describes the wagering licence and the gaming licence and the regime by which new licences might be issued at the end of the term if and only if certain conditions are satisfied and the Governor in Council so recommends.  As your Honours please.

FRENCH CJ:   Thank you, Ms Harris.  Yes, Mr Archibald.

MR ARCHIBALD:   If the Court please.  My learned friend referred the Court to the Treasurer’s letter.  We would make these observations about that letter.  First, it was brought into existence after the legislation was enacted.  Secondly ‑ ‑ ‑

KIEFEL J:   Where do we see that from, Mr Archibald?

MR ARCHIBALD:   The letter is dated 29 June 1994.  One sees that from page 446 and I will obtain for the Court the date on which the 1994 legislation was passed, but I think it is April – May.  The letter was not placed before the investors.  The information the investors were given about that matter appears at page 270 in the prospectus.  The letter does indicate that the receipt of payment by Tabcorp of the terminal payment would be dependent upon Tabcorp securing the new licence.  That is not what the statute says and is not what the trial judge held - at paragraphs 162 to 164 of the trial judgment, appeal book pages 364 to 365 – and no point was taken on appeal before the Court of Appeal of the Supreme Court on that point.

My friend referred to the pleading at appeal book pages 28 to 29 mentioning the material in the budget papers.  That pleading was in relation to the alternative case based on good faith obligations.  Paragraph 80 makes plain that it is a contention advanced only in the circumstance that the construction argument failed.

In relation to the 1994 Act my friend referred to Divisions 1, 2 and 3 of Part 2 and observed the extensive usage in those divisions of the defined expressions and shorthand versions of those expressions clearly referring to the licences granted under Part 3.  All of that is accepted.  There has never been any controversy about that.

When one comes to Division 4 in the 1994 Act, dealing with the terminal repayment, were the consistency of the legislative drafting and scheme to have been extended into that division and were to mean that the division applied only to Part 3 licences, one would have seen the words “on the grant of the new wagering licence and the new gaming licence”.  One does not see that. 

One does not see the truncated version either, “on the grant of the new licences”. So that my friend’s assiduous attention to those divisions serves, in our submission, ultimately to confirm and strengthen our contentions. What you do see within section 21 of the 1994 Act is two references to the phrase “the new licences.” One sees those in section 21(2) at page 84:

The person who was the holder of the former licences is entitled to the payment under sub‑section (1) whether or not the person was, or was entitled to be, an applicant for the new licences.

That is a dependent reference back to the first mention in subsection (1), consistently with the drafting scheme to which I have made submissions in‑chief. The second occasion upon which one sees that expression is in section 21(4):

The payment . . . must be made not later than 7 days after the commencement of the new licences –

Again, that familiar dependent reference.

FRENCH CJ:   What do you say about the proposition which I think was put by Ms Harris that on your construction if you have an entitlement by the reference to the grant of other licences you never cease to be the former licence holders?

MR ARCHIBALD:   Well, we do.  The opening words make plain it is – I will call it a one‑off exercise, and so being the holder of the former licences we achieve our entitlement to payment on the expiry of the new licences and never again.  My friend’s supposed example about repetition based on temporary licence is misconceived, with respect.  If one looks at section 4.3.33 ‑ ‑ ‑

GORDON J:   Before you leave the 1994 Act, Mr Archibald, can I just ask one question about 21 on that submission you just made?  Is not 21 directed at a rolling provision, so that it is directed at not just the first grant of a new licence but subsequent grants and that is why there is a distinction in the opening line, “On the grant of new licences”?

MR ARCHIBALD:   Yes, that is the multiple iteration point that I made in our submissions in‑chief.  The effect of 4.3.4A ‑ ‑ ‑

GORDON J:   No, I am dealing with 21 at the moment.  I thought you were saying that that somehow dictated the way in which the new licences, maybe I misunderstood the point.

MR ARCHIBALD: Well, no, on every iteration of section 21, assuming multiple iterations are possible, on each occasion “the new licences” is a reference back to those new licences referred to in the first line of the first subsection.

That, in our submission, is strong confirmation that the expression “the new licensee”, “the” new licensee, in that section is a reference to whoever may the person who is the holder of those new licences, being new licences referred to in line 1.  So it is another dependent reference back to the first line.  So, all of that is consistent with internal consistency on those scores.

Addressing further the question raised by the Chief Justice, if one goes to 4.3.33 - this is page 738 - one sees from subsection (1), there may be an appointment of a temporary licensee.  One sees from subsection (4) that that appointment is not accompanied by any grant of a licence of any description.  There is no grant of a temporary licence. 

What one sees from subsection (4) is that there is an appointment of a person nominated as a licensee and that licensee is deemed to be the holder of the cancelled licences, while so appointed.  So, the scenario that my learned friend suggests would occur and would generate an anomaly, is itself ill‑founded.

BELL J:   Can I inquire about Ms Harris’ submission that 4.3.12(1) refers to a premium payment by the new licensee that must refer to the wagering or gaming licence under the part that in relation to Part 3A licences you have a premium payment for aspects but not for the gaming machine entitlement.

MR ARCHIBALD:  We say that is ill‑founded.  “Premium payment” is not a form of art.  It is an ordinary expression echoing elements of commerce.  It is, effectively, key money – it is called in the tenancy concept.  There is key money nominated – I am sorry, key money which the candidate, licensee, the applicant offers under 4.3.5(3)(c) at 723.  Under the GME regime, rather than the candidate holders of entitlements nominating the sum, the Minister nominates the key money.  That is 3.4A.5(9)(b) at page 659.  So, one has the precise commercial equivalent, not called “premium payment” but it is exactly the same.  So the section engages entirely satisfactorily.

My friend made another point about 4.3.33(3) – she drew attention to the amendment that occurred in 2008 when the language of the provision was changed to have it apply on the occasion of the grant of a wagering and betting licence under Part 3A.  That is certainly a specific provision limited by particular language nominating the part under which the licence must be granted.

Before the amendment, a matter my friend did not refer to, the language was “another licence under this part”, page 408, and so the amendment maintains the specificity of this particular provision achieved by the added words, “under this part or under Part 3A”.  So, none of that supports our friend’s argument.

As to 4.3.4A, certainly it had a sunset role, but its sunset role was not to intercept operation which remained available in respect of 4.3.12.  All that would happen would be that at sunset, at nightfall, if there were a grant of new licences, the provision would be engaged and operate; if there were not, it would not.  There was no interception before there was room for operation, and that is true of regulatory provisions.  Those that could continue to operate did operate until nightfall.  In respect of those whose force was already spent, there was simply nothing more for them to do.  There would not be another application for a new Part 3 licence.

In relation to prospect of new licences, one has the provision in 4.3.9(1) allowing for extension of the licence period if the emergence of a further licence is delayed or deferred by reason of matters attending the

application.  It is plain the whole system is based upon continuity, not that there would be an hiatus between licences, so that if there is a deferment one has the likely extension - not the imperative extension, but the likely extension.  But whatever may be said about those circumstances plainly, in our submission, when one goes back to the provenance of the terminal payment provision, it was predicated upon near certainty of the occurrence of the event that would cause the terminal payment to be made.

One sees that, in our submission, with tolerable clarity from the prospectus.  I will give references now - pages 173 and 159, and one sees from Mr Westworth’s report that in the event that Tabcorp obtained the new licence but that no terminal payments were associated with that, i.e., if the meaning were a specific meaning, then in his professional opinion the licence would have had to have been amortised.  So the scenario is there is a specific meaning, Tabcorp gets the licence, but has no terminal payment.  In those circumstances, Mr Westworth said there would have to have been amortisation.  That is his ‑ ‑ ‑

FRENCH CJ:   Was that on the premise that the entitlement was a certainty?

MR ARCHIBALD:   No, it is on the premise that one simply looks to whether that event happens but it is not accompanied by any terminal payment.  That is the scenario that would arise in the event of ‑ ‑ ‑

FRENCH CJ:   The counterfactual was, I mean ‑ ‑ ‑

MR ARCHIBALD:   He is assuming – he put in a supplementary report to address this argument raised by the State and so his opinion at paragraph 11, appeal book page 124, paragraphs 19 to 20 at page 125 was that in those circumstances the licences would have had to have been amortised.

BELL J:   Did the primary judge make any finding about that evidence?

MR ARCHIBALD:   I will have to check, your Honour.  Might I inform the Court in some convenient way overnight?

FRENCH CJ:   Yes, thank you.

MR ARCHIBALD:   If the Court pleases.

FRENCH CJ:   The Court will adjourn until 9.45 tomorrow morning for pronouncement of orders and 10.15 for the resumption of this matter.

AT 4.13 PM THE MATTER WAS ADJOURNED