Tabcorp Holdings Limited v State of Victoria; State of Victoria v Tatts Group Limited

[2015] HCATrans 117

[2015] HCATrans 117

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M1 of 2015

B e t w e e n -

TABCORP HOLDINGS LIMITED (ACN 063 780 709)

Applicant

and

STATE OF VICTORIA

Respondent

Office of the Registry
  Melbourne  No M143 of 2014

B e t w e e n -

STATE OF VICTORIA

Applicant

and

TATTS GROUP LIMITED

Respondent

Applications for special leave to appeal

HAYNE J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 15 MAY 2015, AT 9.58 AM

Copyright in the High Court of Australia

____________________

MR A.C. ARCHIBALD, QC:   If the Court pleases, I appear with my learned friends, MR P.G. LIONDAS and MR B.K. HOLMES, for Tabcorp.  (instructed by Herbert Smith Freehills)

MS W.A. HARRIS, QC:   If the Court pleases, I appear in each matter on behalf of the State of Victoria with my learned friends, MR R.G. CRAIG and MR K.A. LOXLEY.  (instructed by Johnson Winter & Slattery)

MR P.D. CRUTCHFIELD, QC:   If the Court pleases, I appear for Tatts Group Limited with MR N.P. DE YOUNG.  (instructed by Clayton Utz Lawyers)

HAYNE J:   Now, I have had both matters called together, but have counsel agreed upon a proposal for how the argument of the application should proceed?

MR ARCHIBALD:   Subject to the convenience of the Court, the parties had agreed amongst themselves that your Honours might hear from Tabcorp in support of the application first.  I think the agreement of the parties does not address whether the Court would then hear from Tatts in support of its application or would hear our application to completion.

HAYNE J:   I suspect, subject to anything that counsel may say, that the better way to proceed may be to deal with Tabcorp v State of Victoria, in effect, as a separate and freestanding application and not decide that until we have heard argument in State of Victoria v Tatts Group; decide them together, but hear them, in effect, sequentially, but do counsel seek to be heard against adopting that course of events?

MR ARCHIBALD:   We would endorse that course, your Honour.

MS HARRIS:   As would we, your Honour.

HAYNE J:   Yes, very well.  Yes, Mr Archibald.

MR ARCHIBALD:   If the Court please, in relation to statutory construction, there are three points we would wish to deal with orally:  the first, redundancy; the second, legality; and the third, disguise.  In relation to redundancy, the critical reasoning of the Court of Appeal is to be found at paragraphs 23 and 24 of the reasons for judgment at page 107 of the application book.  At paragraph 23(8), the court said that:

the only way of reconciling –

the two important sections, 4.3.4A and 4.3.12 –

is to read s 4.3.12 as providing –

for repayment only in respect of licences granted under 4.3.8.  It is applying only to Part 3 licences.  But that was certainly not the only way of reconciling the two sections.  The alternative available reconciliation was to read the expression “new licences” as having an ambulatory operation, capturing Part 3 licences when they were the only licences for which the statute provided.  But capturing other licences should the legislation from time to time provide for their authorising, wagering and gaming activities – including the cases in which such licences might be dealt with under what is a matter of drafting technique – became another part of the legislation.

HAYNE J:   Now, does that formulation obscure what you mean by “under the legislation”?  The difficulty is we have a moving target, do we not, with the legislation.  What is the reach that you are giving to this idea of licences under the legislation or the like?

MR ARCHIBALD:   The reach is that the ordinary and natural connotation of the expression “new licences” is apt to denote not only the particular licences for which the legislation provides at one point of time, but is equally apt to capture and apply to other licences covering the same substantial subject matter for which the legislation may accommodate and provide at some further point of time, keeping in mind that 4.3.12 was destined only to be engaged after 18‑odd years of the life of a licence.

HAYNE J:   That is, “new licences” is to be understood as embracing any and every form of new statutory licence of substantially similar, perhaps substantially identical, effect.

MR ARCHIBALD:   Yes, and that was the only way of effectuating the foundational purpose of the section which plainly – at least, especially in the case of the original Tabcorp licences – was to provide for a terminal payment to reflect, in substance, the initial payment for the licences.  That was the only way in which, when the TAB was privatised, the value of the licences could avoid amortisation, and only by avoiding amortisation could the State secure an advantageous flow of funds on the initial public offering.

The contention that we advance furthers the purpose of the section.  The construction of the Court of Appeal negates the purpose of the section.  The construction that we have urged promotes harmony and satisfies the purpose of the section.  The construction of the Court of Appeal, in our contention, achieves the reverse.  Critically, in paragraph 24, the court observed that the result of its construction was to generate redundancy to yield a conclusion which denuded:

Tabcorp’s right to payment . . . of practical utility.

Now, the sole justification that the court advanced for that result being acceptable as a matter of construction was set out in the second half of paragraph 24 at lines 17 and following.  The court said – and this is the only justification –

we agree with the judge –

the trial judge –

that the precise definition of ‘gaming licence’ in s 1.3 when read in the context . . . leaves no room for an alternative broader interpretation of ‘new licences’ in that context.

That justification is, in our contention, misconceived.  The trial judge did not say that in his Honour’s judgment in respect of the phrase “new licences”.  What the court has done in the second half of that paragraph is to lift from its judgment in the Tatts Case reasoning which it has failed to appreciate is inapplicable in the case of the Tatts section.  Could I take the Court to the Tatts application book, page 121, paragraph 53?  Paragraph 53 reads:

Like the judge, however, it appears to us that the precise definition of ‘gaming operator’s licence’ in s 1.3 when read in the context . . . leaves no room for an alternative broader interpretation of ‘gaming operator’s licence’ in that context.

The verbiage leaves in no doubt the provenance of the second half of paragraph 24 in the Tabcorp Case, and in the Tatts Case the trial judge did say substantially that, but not of section 3.4.12.  The observation was in respect of 3.4.33, the strikingly different section that applied to the Tatts terminal payment.  One sees the trial judge’s passage, to which the court is referring, at paragraph 204 of his Honour’s reasons in the Tatts judgment at page 68.  His Honour said there:

The definition of ‘gaming operator’s licence’ . . . is simply too strict to allow the Court to ignore the text of the Act and conclude that the identical defined phrase had different meanings within s 3.4.33.

The strikingly different position in respect of the Tatts terminal payment provision was that the section which was the equivalent of 3.4.12 contained the expression “gaming operator’s licence” twice.  It was a defined expression and his Honour concluded that one could not sustain an argument that the same defined phrase in the same section had different meanings on two different occasions.  Their Honours sought to transpose that reasoning to the Tabcorp Case.

But 3.4.12 does not contain any defined expression - “new licences” is not defined.  It contains no instance of a relevant phrase being used on more than one occasion.  There is no argument in 3.4.12 that the same phrase has different meanings on two different occasions within the same section.  “Licences” is not defined – the expression “new licences” is not defined and 3.4.33 did not even include in subsection (1) the adjective “new”. 

So, in our submission, the invocation by the Court of Appeal as the sole justification for redundancy of the reasoning in the Tatts Case simply does not sustain the proposition that “new licences” should be read down, read or read down, as the court says in paragraph 25 of the Tabcorp judgment, confining the ordinary operative meaning of the expression “new licences” to some narrower sphere of operation in 3.4.12.

HAYNE J:   Now, are these points points which you would say make it a visitation case?  If it is not a visitation case, what is the principle?

MR ARCHIBALD:   The principle must be what is the application?   How does one apply the notion of the requirement that it be necessarily implicit in the statute that redundancy is acceptable?

HAYNE J:   The principle is not disputed, and it is a particular application.  It may not be conclusive that it is a visitation case – you say it is a very large visitation.

MR ARCHIBALD:   Yes, I do not argue against that.  Either the court has misunderstood the principle, or the principle is inadequately articulated to guide courts in the application of this element of construction of statute.

HAYNE J:   Yes.

MR ARCHIBALD:   Of course, what the court has done is to ascribe to the expression “new licences” in 3.4.12 the identical meaning to the apposite phrase in 4.3.4A, but in 4.3.4A the phrase was “further wagering licence or gaming licence”.  There are the defined expressions.  The court has, in substance, construed the words “new licences” as having the same denotation as the different phrase in the companion section; different words have different meanings.

As to legality, the court gave two reasons for declining to apply the doctrine to the instant case.  The court recognised expropriation, but declined to apply the principle of legality in aid of construction to discern whether the alternative construction should be adopted.  The two reasons were, first, that Tabcorp’s right was “contingent” – page 110, paragraph 32, lines 20 to 22.  The second reason was that Tabcorp’s right was sourced in statute, and essentially the court said being a right sourced in statute, it was always open to be eliminated by Parliament  – paragraph 34, application book 111, lines 3 to 4.  Parliament may giveth, but Parliament may taketh away.

Now, in our submission, neither of those features has previously been said in any authority to be a foundation for declining to apply that principle of legality or as lying outside the boundaries of that principle.  The principle turns on the unfairness of expropriation, unfair because the subject matter of expropriation (a) has value, and (b) is without compensation.  The court itself recognised that the doctrine was not even confined to rights, contingent or otherwise.  The court rightly, in our submission, at paragraph 31, page 110 of the application book, line 9, identified the principle as applying to:

the expropriation of rights or other manifest unfairness ‑ ‑ ‑

HAYNE J:   Well, does that not take you off into that stream of cases, not perhaps all of them easily reconcilable under 51(xxxi), about statutory licences and whether statutory licences when cancelled yield an acquisition of property?  That is, are we not here, in effect, in a makeweight argument, at least at the point of leave?

MR ARCHIBALD:   No - two things.  First, that conception of the reach of the principle of legality assists the conclusion that matters such as contingency and statutory provenance do not take the expropriation outside the principle, for the subject matter plainly has value on any view, and the manifest unfairness of what occurred here was stated explicitly by both the trial judge and the Court of Appeal.  At paragraph 43, page 131 of the application book, the trial judge used the very expression “manifestly unfair and unreasonable” in describing the result.  That is an immediate engagement of the principle of legality, and the Court of Appeal itself made observations to the same general effect at paragraphs 35 and 36 at page 107.

Of course, it may be the case that contingencies can impair the value that may attend subject matter, as might expectancies.  But here, the value, the retained value of the right was evident for that was the very foundation upon which the non‑amortisation of licence value in the Tabcorp accounts was predicated.  It had to have substantial value and retain substantial value in order to provide the function to allow the initial public offering to take place on the basis indicated.  In our contention, there is, especially in the case of the legality point, a fundamental point of principle raised.  No other foundation for the court’s exclusion of the doctrine has been identified and, in our submission, there is none.

As to disguise, we wish to say little more than we have already said in the course of our written summary.  What the court did was speculate as to a foundation for legislative drafting.  The court’s conclusion accepting the speculation as providing a reason for the absence of express reveal what the court did was to endorse legislative opaqueness and surreptition.  In our submission, that is unwarranted and should not be sustained.  It is a novel proposition, and the Court should address the point and conclude that it was unsound.

As to the remaining points we wish to raise, we will deal shortly with the fair dealing contract.  The court found there was a contract, a binding contract with the State to deal fairly with Tabcorp’s rights, but then the Court of Appeal’s conclusion stripped that contract of any significant content, producing, in our submission, a commercially unreasonable result. 

The Court of Appeal, with respect, misunderstood the Tabcorp argument.  The Tabcorp argument was not that by reason of the contract the State was bound to procure in any further legislation persistence of the Tabcorp terminal payment right.  The argument was that because, in the circumstances here, the reform legislation was not advanced in any respect by the jettisoning or elimination of the terminal payment entitlement, because there was no public policy measure that was aided by its elimination, the State acted unfairly in promoting such legislation.

HAYNE J:   Now, looking at your draft notice of appeal at page 138 and following, are the grounds under the heading “Good Faith Contract” severable from the other grounds?

MR ARCHIBALD:   Yes, they are standalone grounds, for the “good faith contract” point arises only in the event that we fail on the construction point.  If the Court pleases.

HAYNE J:   Yes, thank you.  Yes, Ms Harris.

MS HARRIS:   If it please the Court.  Tabcorp can only succeed if the meaning of the words “new licences” is generic, has an ambulatory meaning of the kind as described by my learned friend, but their submissions steadfastly ignore the genesis of those words.  You will not see anything in their submissions, whether today or written, which addresses where those words came from. 

This Court has said on a number of occasions that while the task of statutory construction begins and ends with the text, it must take into account context, including legislative history, and that is what the Court of Appeal did in determining that the words “new licences” in section 4.3.12 unequivocally had a specific meaning.  Can I take your Honours first to the 1994 Act, which is in the legislation bundle, the first Act in the legislation bundle?  The relevant section is section 21, and it is at page 20.  Your Honours see at 21(1):

On the grant of new licences (other than the initial licences), the person who was the holder of the licences last in force . . . is entitled to be paid an amount –

That is the terminal payment.  That language, apart from the deletion of the parenthetical reference to “other than the initial licences”, did not change throughout the period with which we are concerned.  The word “licence” was in that legislation defined, and your Honours find it at page 6 in section 3:

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

and similarly, two definitions down –

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

Once that definition is inserted into the section, the meaning of the section is unambiguous.  The entitlement can only be triggered upon the issue of licences of that kind and so the Court of Appeal held at paragraph 28.  They held, adopting the findings of the trial judge, that the section bore a specific meaning from its inception; that is at page 109.

If it acquired a generic meaning, your Honours, it must have acquired it at some later time.  Did it acquire that later meaning when this section was picked up along with other gaming legislation and incorporated in the omnibus Gambling Regulation Act 2003 (Vic), which next appears in the legislative bundle. Again, there is nothing in Tabcorp’s submissions that suggests that it acquired that generic meaning at that point, but the meaning changed upon the incorporation of that section into the legislation. The relevant section appears at page 47 of the legislative bundle, 4.3.12, and your Honours see the identical language is used:

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

the terminal amount.  While those parenthetical references to the initial licence have disappeared, because they are now redundant, the section has not otherwise changed.  Importantly, as the Court of Appeal recognised at paragraph 16 of the judgment, while the definition of licence has disappeared from the legislation, the reason that definition disappeared is because the omnibus legislation now embraced a host of licences, so it was inappropriate to singularly define “licence” as meaning the wagering and gaming licence.  What it did do is retain the definition of “licensee”, and the Court of Appeal records that at paragraph 8 of its judgment at application book 97.

In this new omnibus legislation, the word “licensee” was still the holder of the wagering licence and the gaming licence.  There is no textual indication within the body of the section that it has changed meaning at that point.  Moreover, the specific meaning is supported by the context in which it appears.  One starts at the beginning of the part on page 41 of the legislative bundle.  Division 1 sets out the authority of licences, and the Court will note that the heading just uses the word “licences”, and yet it is clear from the context that the only licences being spoken about are the wagering licence and the gaming licence, which are dealt with in the ensuing provisions, and the authority conferred by those licences is adumbrated.

Division 2 appears on page 42.  Again, that division deals with the grant of those licences.  The generic use of the word “licence” is in the heading, but it is unambiguous from the provisions which follow that the only licences which may be granted under that division are the wagering licence and the gaming licence.  The natural progression continues and we get to Division 3 - what happens at the end of those licences.  Section 4.3.12 provides for the terminal payment in respect of those licences.

What Tabcorp must do is require the words “new licence” to do some different job to the word “licence”.  They must confer on those words “new licences” some different meaning, and this Court said as recently as earlier in the week in the Wealthsure Case that where a word appears in a section, ordinary principles of construction require that it be given a like meaning.

KEANE J:   Well, that assumes that the same words are used.  What would be so wrong, for example, about treating the words “new licences” as meaning other licences, that is to say, licences different from licences as defined?

MS HARRIS:   It is impossible in the context of this section, with respect, your Honour, for a number of reasons.  Firstly, we have the legislative history that tells us what the meaning of “licence” is and no indication in that history that the words “new licence” are intended to have some different meaning.  The second thing we point to is that the identical phrase “new licences” is used in 4.3.9(2), which is on page 46, and where it is there used – do your Honours see, this is a provision dealing with the duration of the licence and the licence conditions, and subsection (2) makes provision for what happens if it is unlikely that there is going to be a new wagering and gaming licence issued under 4.3.8, before the end of the 18‑year term.  The concluding words are that:

the Governor in Council may . . . approve the extension of the term of the current licences until the commencement of the new licences –

Now, those words “new licences” have an unambiguous meaning in that section, your Honour, and they mean there only the wagering and gaming licences which can be conferred under 4.3.8.  The third thing we point to is the concluding words of section 4.3.12(1), which refer to the calculation of the compensation, referring to:

the premium payment paid by the new licensee, whichever is the lesser.

We know that the word “licensee” has been defined in the legislation to mean the holder of the wagering and the gaming licence.  Your Honours, at that point, the section bore the specific meaning, and Tabcorp has never seriously contested otherwise.  The burden of Tabcorp’s submission is that it altered with the introduction of the amendments in 2008.  Only two things entered the legislation in 2008.  The first of them appears on page 42 of the legislative bundle, and this is section 4.3.4A, which precludes the issue of further wagering and gaming licences. 

The only other thing which happened to the part in 2008 was the insertion of some words at page 57 in 4.3.33(3), and I ask the Court to note these words because they are important.  Your Honours see the final words – and this relates to the appointment of a temporary licensee:

is terminated by the grant of a wagering and betting licence under Part 3A.

The words which formerly appeared were “another licence under this Part”.  That is important, your Honours, for this reason.  In 2008, when these amendments were made, when the court wanted to make a reference to some licence sitting outside Part 3 of Chapter 4, it did so in terms.  If that had been the intended effect of the amendments on 4.3.12 – that is, if it had been intended that 4.3.12 was to be expanded to connote licences of that kind, or any other licence sitting outside the part, the legislature would have made the corresponding change to 4.3.12, but it did not do so.

HAYNE J:   Just going back to 4.3.4A.  On the construction of 4.3.12 for which you contend, what possible operation was left for 4.3.12 in face of 4.3.4A?

MS HARRIS:   None, your Honour.

HAYNE J:   Therefore, 4.3.4A, to speak in terms of implied repeal is to distract, but the consequence of 4.3.4A on your construction is that 4.3.12 was stripped of any possible operation?

MS HARRIS:   As were other provisions of the part, your Honour, that is right.  That is how we deal with this redundancy point.  Our learned friends are perfectly right to say the provisions must be harmonised.  But when we consider the impact of 4.3.4A on the part generally – not just in isolation of 4.3.12, but the part generally – we see that its very purpose is to strip some sections of any ongoing operation, because they preclude the issue of licences of this kind.

If we go back to page 42 of the legislative bundle and we look at the sections which immediately appear thereafter, after 4.3.4A, 4.3.5 now has almost no work to do.  The only work it has is in relation to the appointment of temporary licensees and only some of its subsections apply to the appointment of temporary licensees, so some of its subsections become immediately inoperative. 

Section 4.3.6 can now no longer do any work.  It becomes immediately inoperative because it does not govern the appointment of temporary licensees; 4.3.7, immediately inoperative, because it has no application to the appointment of temporary licensees.  Under 4.3.33, temporary licensees are a direct appointment by the Commission.  They are not appointed on the recommendation of the Commission to the Governor in Council.  These sections have no more work to do - 4.3.8, no more work to do, 4.3.9(2), no more work to do.

HAYNE J:   It is, if I may be so bold as to suggest, a somewhat untidy form of amendment to make, is it not?  It is just revealing the obsessive-compulsive nature, perhaps, but – no?

MS HARRIS:   Your Honour, I rather like to think of it as a neat legislative device because the alternative, and your Honours ‑ ‑ ‑

HAYNE J:   Devices in this Court have echoes of Sir Owen Dixon’s circuitous device.  Yes, do go on.

MS HARRIS:   But it is not circuitous, your Honour.  It could not be more direct.  Its intended application on those sections is beyond question.  It cannot let them operate any further.  The alternative was piecemeal repeal.  There are some sections that the legislature could have put a line through at that point.  Other sections would have had to remain in the legislation for the balance of the term of Tabcorp’s licence, those governing the ongoing conditions of the licence, so those sections would have had to remain until the end of August 2012. 

Other sections, like 4.3.5, would have had to be amended to give them a more limited operation so that they could only apply to the appointment of temporary licensees.  It could have been done that way, your Honour, but it was not.  The legislature chose the step of inserting a single section that effectively deprived some provisions of ongoing operation from that moment, and also placed a sunset on the operation of the balance of the part by saying it will not have any operation after the conclusion of Tabcorp’s licences.

That is the way in which it must be read harmoniously, and it takes care of the redundancy principle.  The legality principle…..has no work to do here, and is, with respect, a distraction.  The Court of Appeal recognised, of course, the relevant principles, and your Honours saw that in paragraphs 31 to 34 of their judgment.  But 4.3.12 either has a generic meaning or a specific meaning.  If it has the generic ambulatory meaning that is contended for by Tabcorp, and had it prior to 2008, then 4.3.4A had nothing to say about it because 4.3.4A only prevented the issue of licences of that specific kind.

If, on the other hand, as we contend, 4.3.12 had a specific meaning prior to 2008, then Tabcorp fails regardless of 4.3.4A because the licences simply were not issued.  Even if 4.3.4A did not appear in the legislation,

your Honours, the trigger for 4.3.12 was not satisfied.  Your Honours see in the material an announcement by the Premier at application book 212 to 213 that makes clear the State’s intention not to issue any more of these gaming licences and gaming operators’ licences.

The third thing we say is, let us look at 4.3.4A as an expression of parliamentary will.  If 4.3.12 has a specific meaning, then the intention manifest in 4.3.4A could not be clearer.  It is clearly there to deprive 4.3.12 of the necessary triggers for the payment entitlement.  But there is one further thing, and we say that the Court of Appeal was perfectly right about this.  There are plenty of cases which say the legislature must, if it wants to divest someone of a vested right or interfere with a fundamental right – privilege against self‑incrimination, a vested proprietary right – must do so in the clearest possible terms. 

We say 4.3.4A did that, but the legality principle is not really engaged here because the entitlement was not an entitlement unless and until those triggers had been satisfied, those licences had been issued.  Sections 4.3.6 through to 4.3.8 contemplated clearly that that might never occur.  The Commission was not entitled to make a recommendation; the Governor was not entitled to issue a licence until those things had been satisfied.  That might never have happened.  This is, on all fours, we say, with the WA Planning Commission v Temwood decision that is referred to the bundle where an equivalent right was held not to be a right at all unless and until the triggers had been satisfied.

In relation to the contractual claim, your Honours, we rely on what we have said in our submissions.  In terms of breach, we are only in this territory if 4.3.12 has a specific meaning, and Tabcorp has lost on the statute.  That means that the only cure would be for the legislature to have enacted a new and broader payment entitlement.  That has to be what the contract, if it existed – and we say it did not – required the State to do, because simply preserving 4.3.12 would not have done the trick.  The licences were not issued; the payment entitlement would not have been triggered.  In order to get Tabcorp its money, the contract must have required the State to enact a new provision with a broader effect, giving it an entitlement different to what it had ever had.  If the Court pleases.

HAYNE J:   Thank you, Ms Harris.  Yes, Mr Archibald.

MR ARCHIBALD:   Three matters, if we may, if the Court pleases.  First, we did argue, particularly at first instance, that the expression “new licences” in the 1994 legislation carried the non‑specific meaning.  It is a composite phrase.  The composite phrase has never been defined, and the integers of the composite phrase convey that the expression is calculated to

include licences other than the particular species of licence initially identified in the 1994 legislation and carried into the 2003 amendment.

The second point is our learned friend’s argument, and the court’s construction, treats the adjective “new” as though it meant further.  The contrast between “new” and “further” is something we remarked upon in our submissions in‑chief.  The adjective “new” includes further licences of the same species as have previously been granted and known, but it is also apt to embrace licences of the same genus, but a different species, that have not previously been captured.  That is the reach and object of the undefined expression in section 4.3.12.

Thirdly, our learned friend referred to the need for harmonisation and the provisions of section 4.3.4A.  Section 4.3.4A has two limbs.  The first is a negative limb.  It precludes the grant of further Part 3 licences.  It cuts back the operation of the part to a single iteration, and it therefore cuts back the potential operation of 4.3.12 to a single iteration.  That is accepted. 

The second limb of 4.3.4A is a positive provision.  It preserves the operation of the part in relation to the initial licences.  It recognises their continued operation.  The construction accorded to 4.3.12 denies 4.3.12 further operation.  It is that that renders it redundant; not its natural operation, but produced by the construction accorded by the court.  That, if one likes, produces disharmony between 4.3.4A and 4.3.12.  The construction for which we contend does the reverse.  If the Court pleases.

HAYNE J:   Thank you, Mr Archibald.  As I indicated to the parties, we will hear argument in the related matter before we determine what course we will take in this matter.  Ms Harris.

MS HARRIS:   If the Court pleases.  Your Honours, numerous decisions of this Court confirm the approach to construction of commercial contracts.  What would a reasonable businessperson have made of the words, having knowledge of the background circumstances and the commercial purpose or object to be secured by the contract?

HAYNE J:   Can I come at the issue from a logically prior point?  A contract was made; the contract provided that the State, or the counterparty, would take reasonable efforts to enact legislation; legislation is enacted.  What is the consequence for the contractual obligations of the enactment of the statute?

MS HARRIS:   With respect, your Honour has put your finger on the very point that we agitate and say this is why this matter justifies special leave.  In effect, what the Court of Appeal has done has made errors of principle at numerous points at that intersection between contract and statute.

HAYNE J:   What does the State contend?  I read with interest the pleadings, and that is why we sent for the pleadings, to just see what the State says is the consequence of the enactment of the legislation.  What do you say it is?

MS HARRIS:   There are two pieces of legislation, of course, your Honour.  The first piece of legislation was the one which was enacted in 1996.  That piece of legislation – can I take your Honours to the agreement?

HAYNE J:   With a view to demonstrating what?  What I want to know is what does the State say is the effect of enacting either the first Act or the second Act on the persistence or availability of remedies, that is, the availability or persistence of obligations under the contract?

MS HARRIS:   At the moment that the 1996 legislation was passed, two provisions of the 1995 agreement were spent.  That is the first thing we say.  The two provisions we say were spent are the payment obligation on Tatts, which is in clause 3, and the terminal payment obligation on the State in clause 7.  It is very important to remember that those are the two provisions that were the subject of the legislation.  The agreement provided, at page 216, that the trustees shall pay a licence fee to the State, and it has set out the basis of that licence fee.  It then provided, in clause 7, that:

If the Gaming Operator’s Licence expires without a new gaming operator’s licence having issued to the Trustees, the Trustees shall be entitled to be paid –

It then provides in clause 8:

The Minister will cause to be drafted and will use his best ‑ ‑ ‑

HAYNE J:   We have read all this, Ms Harris.  It is a question of what is the legal consequence.  What is the rubric that the State puts its argument under?

MS HARRIS:   The first thing we say is that at that point, those clauses were spent.  No reasonable businessperson could construe this contract as one where the parties intended, for those obligations, to continue alongside the parallel statutory obligations.  That is the first thing we say.

HAYNE J:   Well, let us unpack that.  The word “spent” is masking much more than it is illuminating.  Do you say that the contract in these respects was discharged by performance, discharged by merger?  Is this a species of the doctrine of merger?  What is the legal rubric under which you put this argument, and if you answer with the word “spent”, Ms Harris, I fear that you may not be quite satisfying the purpose of the inquiry.

MS HARRIS:   As a matter of construction, your Honour, the parties intended that those provisions would no longer be enforceable and that they would no longer ‑ ‑ ‑

HAYNE J:   Is it discharged by agreement, discharged by performance?  What is it?

MS HARRIS:   It must be discharged by the performance of clause 8, your Honour.

HAYNE J:   Yes.

MS HARRIS:   They come to an end because clause 8 has been satisfied.

HAYNE J:   Well, that seems to me to be, if anything – and I do not know whether it is anything at all – if anything, it is a species of merger, that is, creation of a different – let me avoid the word “higher” for the moment – obligation, just as contractual obligations merge in conveyance, just as security obligations merge in the taking of a higher and better security.  It may be that ultimately you are propounding some idea of merger.  Mr Crutchfield will no doubt ultimately tell us why that, if it is a point that is available and open and being argued, is not a suitable matter for leave, but that seems to me to be the logically prior first set of issues that arise in this case.

MS HARRIS:   With respect, your Honour, the anterior issue is the construction of clause 7.1 itself and the way in which the Court of Appeal found that the words “gaming operator’s licence” had a meaning under the statute, but failed to import those into clause 7.1.  The one that your Honour has identified is undoubtedly the second issue; whether as a matter of contract, the parties agreed that their obligations and their entitlements under those clauses would no longer be enforceable once the legislation was passed.  Your Honours, the logic of that to ordinary ‑ ‑ ‑

HAYNE J:   It may or may not be a question of agreement.  I do not know.

MS HARRIS:   Your Honour, that is the next step, if your Honour likes.  Whether they agreed or not, what was the effect of the legislation ‑ ‑ ‑

HAYNE J:   I like nothing and will never be deciding it, Ms Harris, so there we are.

MS HARRIS:   We are grateful for your Honour’s views, of course.

HAYNE J:   I am not here to give you an advisory opinion, even on my last sitting day.  We do need to know what it is that the State is propounding here.

MS HARRIS:   That is it, your Honour.  Those clauses could not have continued – once the statute has enacted those parallel obligations to pay a licence fee and to make a terminal payment, those clauses of the contract no longer have any work to do.  One can treat it as a matter of construction, which we do, or as a matter of necessary effect of the statute, which we also put forward.  Once the legislature spoke, it intended that the statute would be the repository of those rights.

KEANE J:   Well, it created a new charter.

MS HARRIS:   I beg your pardon, your Honour?

KEANE J:   The legislature created a new charter.  Just as when a court pronounces on a contract, the rights of the parties are to be found in the judgment, not in the contract.

MS HARRIS:   Yes, your Honour.

KEANE J:   That is quite irrespective of what the parties had intended.

MS HARRIS:   I am separating the two points.  We say as a matter of construction, the parties did not intend those rights to go forward, but even if they had, once the legislature spoke and enacted those rights, it could not be taken to have thought that there were contractual rights which remained in place such that Tatts could be required to pay two licence fees, and the State could be required to pay two terminal payments.  If the provisions co‑existed then that is the logical consequence.

HAYNE J:   But push comes to shove as it does in this case when the legislation is repealed.  Is it said that somehow the contractual right has been held in abeyance, springs up?  What is going on here as a matter of fundamental legal relationships in the face of statute?

MS HARRIS:   Your Honours, that is our point precisely, with respect.  The critical reasoning is at paragraph 214 of the judgment.

HAYNE J:   Page?

MS HARRIS:   Page 168, I beg your pardon, your Honour, of the application book.  It is worth actually turning to the previous page, because your Honours see on these less than two pages the sum total of the court’s reasoning on this issue.  The first two things that they say ‑ ‑ ‑

HAYNE J:   Am I to be forgiven for thinking that might reflect the course of argument below, Ms Harris, or ‑ ‑ ‑

MS HARRIS:   I would not think that that is a fair reflection, your Honour.

HAYNE J:   I withdraw it unreservedly at once, Ms Harris.

MS HARRIS:   What we come to, actually, is an argument that was not put forward by anybody.  Paragraphs 212 and 213, the points there made, with respect, miss the point.  The court there says you cannot say that these provisions were spent because the 1995 agreement continued to exist.  We know the 1995 agreement continued to exist because it was the subject of a later amending agreement and the transfer deed.  The State embraces that proposition.  Of course the agreement continued to exist because it provided for things other than the matters in clause 3 and the matters in clause 7.  The State’s argument was those two clauses could not have survived the enactment of the statute.

HAYNE J:   But again, there may be a point that even if, as is the case here, there are iterations of the agreement, the point may be whether there is not a succession of mergers.

MS HARRIS:   Indeed, your Honour, and that arises at the point of the transfer deed because that was a novation.  At that point, if clause 7 does not form part of the 1995 agreement because it has been discharged, then the agreement which is novated does not have clause 7 in it.  It cannot be revived, as the ‑ ‑ ‑

HAYNE J:   But even if it does, it may then be merged on account of the later legislation, may it not?

MS HARRIS:   Indeed, your Honour.  These are precisely the issues, with respect, the Court of Appeal did not grapple with.  Your Honours see what is said at ‑ ‑ ‑

HAYNE J:   Well, it does not stand out with stark clarity from your pleadings, Ms Harris.  It really does not.

MS HARRIS:   We apologise for that, your Honour.  In mitigation, might I say that ‑ ‑ ‑

HAYNE J:   The question may be whether it is now open to you.  That is why we sent for the pleadings.  We will hear what Mr Crutchfield has to say, but you may need to confront whether these arguments are in fact available.  Perhaps those are issues on which may be left to your reply.

MS HARRIS:   Certainly, your Honour.  I do not have the pleadings in front of me, but I am familiar enough with them to know that we said in terms that these clauses were spent and no longer enforceable at the time the 1996 legislation was passed.

HAYNE J:   Yes.

MS HARRIS:   The argument that the Court of Appeal articulates in 214 was not raised by anybody.  It certainly was not addressed on our pleadings, nor was it raised on our opponent’s pleadings.  What they say there is, firstly, that possibly the right to compensation provided for in clause 7 could not have co‑existed with the right to compensation for which the Act provided.  That is the point that we made, that that right must have come to an end once the 1996 legislation was passed.

But then they go on to say until the 2009 amendments prohibited the issue of a new gaming operator’s licence under Division 3 of Part 3, it does not follow that clause 7 of the 1990 agreement was forever eliminated by the introduction of the 1996 amendments.  We say that having been raised for the first time by the Court of Appeal, how can that be?  How can the 2009 amendments somehow revive something which has ceased to exist?  Their Honours do not answer that question. 

As a matter of legal principle, we cannot see how that could happen.  Still less do we see how that could happen when we look at the terms of the legislation which is supposed to have revived it.  The legislation appears at section 3.4.3, which is on page 21.  These are the only amendments to the legislation which are made:

This Part applies only with respect to the gaming operator’s licence that was issued on 14 April 1992 and does not authorise the grant of any further gaming operator’s licence.

Not a mention, of course, of the contract.  That provision was, with respect, rightly held by the learned trial judge and by the Court of Appeal to have negated the possibility of a terminal payment under 3.4.33, the statutory provision.  It did not eliminate the statutory provision; it did not repeal it.  It simply meant that the triggers to its exercise could no longer occur.  What is unexplained in the Court of Appeal’s reasoning is how the passage of that statutory provision could have revived some contractual right which they had just suggested could not have co‑existed with the statute.

KEANE J:   Just apropos of the question as to whether this contention is open to your side, having regard to the pleaded issues, is one of the things you are saying that whatever the issues that were tendered by the parties to the court, the gremlin that is in 214 is something which has to be dealt with in any event?

MS HARRIS:   Yes, your Honour, absolutely.  This is the key special leave question, because it does not illuminate how some contractual right which has ceased to exist can suddenly be resuscitated.  That then infects the balance of the judgment, your Honour.

HAYNE J:   As to the pleading point, I may have been too condemnatory too quickly.  It may be that paragraph 11(b) and 11(c) at pleadings 32 to 33 bundle might get you home.

MS HARRIS:   Your Honour, my learned junior has just dug those out and I was going to refer the Court to those, as well as Tatts’ reply at paragraph 2, which responds to those points.

HAYNE J:   Yes.

MS HARRIS:   The final thing we say, your Honours – that point that we are just dealing with is, if you like, a standalone point which of itself justifies special leave because of the tension which it creates between the realm of contract and the realm of statute.  Equally, in response to the argument we did make, which was that the 2009 amendments abrogated not just the statutory entitlement but also the underlying contractual entitlement, if it survived, the Court of Appeal deals with this at 216 to 217 on page 169.  The burden of its reasoning appears in 217.  It says two things:

We reject that submission . . . It is premised on an assumption that . . . cl 7 of the 1995 Agreement has the narrow specific meaning –

It was not, with respect, put forward on that premise.  If it had a narrow specific meaning, we do not need to worry about whether it was abrogated by 3.4.3 because it simply was not triggered; the licences were not issued.  The argument was put forward on the basis that even if clause 7.1 has that broader meaning, the findings of the Court of Appeal about the purpose of the statute in rendering it impossible for the payment right to be triggered ought to have brought into play the principles in Magrath’s Case and Thomson’s Case.  The findings of the Court of Appeal were at page 125, paragraph 65, and at about line 35, the court says:

The emasculation of the right to compensation which has now been accomplished by the enactment of s 3.4.3 may do little to enhance

the State’s reputation for reliability and commercial morality in its dealings.  But, as the State made unmistakably clear at the time of the Treasurer’s letter and the 1995 Agreement, its then stated intention would not bind that government or future governments –

and so on.  That was perfectly right, with respect, your Honours, but if the clause 7 right survived the passage of 3.4.3, then the State’s reputation for commercial dealing must remain intact because the conclusion is that the contract survives, even though Parliament has done its best to eliminate the statutory entitlement.  The necessary corollary of the conclusion is that Parliament was just wasting its time.  As your Honours please.

HAYNE J:   Yes, thank you, Ms Harris.  Yes, Mr Crutchfield.

MR CRUTCHFIELD:   If the Court pleases.  Could I take the long way in answer to your Honour Justice Hayne’s question about this merger point by going first to the agreements that postdate the 1995 agreement because it is necessary to recognise that what Tatts sues on is not that agreement.  It is, as your Honours know, the 2005 transfer agreement.

HAYNE J:   Yes, I understand that.

MR CRUTCHFIELD:   It is also necessary to recognise that the State in – could I ask your Honours to go ‑ ‑ ‑

HAYNE J:   Do you say the 2005 agreement survived the legislative steps taken, I think, after that agreement, were they not?

MR CRUTCHFIELD:   The clause 8 obligation, to use the State’s best endeavours obligation, was put into legislation in 1996, so the year after the 1995 agreement.  We do say that the clause 7 obligations did survive the introduction of that legislation in 1996, yes, we do.

HAYNE J:   You had two obligations:  one statutory, one contractual?

MR CRUTCHFIELD:   Two obligations and two rights.

HAYNE J:   Capable of being chosen at your election?

MR CRUTCHFIELD:   Yes.

HAYNE J:   Upon repeal of the statute that left you with an unaffected contract?

MR CRUTCHFIELD:   Precisely.

HAYNE J:   It is an odd result, Mr Crutchfield.

MR CRUTCHFIELD:   It is a matter of construction of the contracts.  That is the way the case was argued below and dealt with below by the courts below.  We say as a matter of construction the matter becomes clear from the 1999 agreement, and then the transfer agreement.  If you go first to the 1999 agreement at application book page 240, this is three years after the statute has been enacted in accordance with the clause 8 best endeavours obligation, so the statute exists, and the recitals say, paragraph B:

the Parliament of Victoria legislated to reflect in statutory form the payment requirements contained in clause 3 –

and then recital C –

The Government of Victoria and the Trustees have decided for mutual benefit to alter the payment requirements as reflected in the 1995 Agreement and in –

the 1996 Act and for this purpose, et cetera.  Then, recital D –

The Government of Victoria and the Trustees have agreed to amend the 1995 Agreement in view of the new statutory payment obligations –

Then we would ask your Honours to go to clause 2, which amends very significantly for our case, your Honours, clause 3, which is dealing with the Tatts payment obligation.  We submit it makes it clear that that payment obligation under clause 3 would no longer operate after the 30 June 1999 financial year, and from that time on, only the statutory payment obligation continued. 

We submit at the time the 1999 agreement was entered into – this amending agreement was entered into – it is clear that the parties had intended and agreed that clause 3 would continue alongside the old section 135A in the 1996 amendments.  Why?  Your Honour Justice Hayne says that is an odd result?  We submit it is not an odd result at all.  This was an extremely valuable right.  Everyone recognises sovereign risk as an issue.  Everyone recognised that alarm bells would ring at standard and pause if the State Government expropriated ‑ ‑ ‑

HAYNE J:   Maybe, but you avoid sovereign risk by making an agreement.  The two propositions just do not fit together.  Sovereign risk is that legislation is enacted.  You are saying by agreement you can avoid that.

MR CRUTCHFIELD:   No, you cannot avoid it, but you can minimise the risk, and unless you have got a Durham Holdings‑type situation where the government actually, by statute, takes away the valuable right, which it did not do – of course, as your Honours know, the legislation did not even refer to the contract.  Can I go then to the transfer agreement?  I want to come back to your Honour Justice Hayne’s merger point.  This was argued as a matter of pure statutory construction.  When you go to the transfer agreement – it is at application book 244.  This is when the licence gets transferred to Tattersall’s, and your Honours will see that the other Tattersall’s companies are parties to the agreement.  Recital D:

The Minister . . . 

(ii)effect the transfer of the rights and obligations under the 1995 Agreement as amended by the 1999 Agreement together with all rights and obligations of the Trustees arising pursuant to the 1999 Agreement –

and then, if your Honours could go, please, to clause 10, the 1995 agreement:

The rights and obligations of the Trustees arising pursuant to the 1995 Agreement as amended by the 1999 Agreement together with all rights and obligations of the Trustees arising pursuant to the 1999 Agreement are transferred to Tattersall’s in accordance with clause 11 –

As Justice Hargrave found, and as the Court of Appeal found, the matter was put beyond doubt as a matter of contract by these provisions.  It was beyond question that the contractual obligations are not spent, or whatever – the State put it in various ways.  It is also very important to recognise the State eschewed any notion below that there was a more general point of principle, perhaps of the kind your Honour Justice Hayne is alluding to.

HAYNE J:   Does that yield some bar to them propounding it in this Court?  Is there a Coulton v Holcombe point?  Would the evidence have been different, or is it simply legal characterisation of consequences?

MR CRUTCHFIELD:   It is more than that, we say, your Honours.  We say that the Court finds a special leave point in the way the case was argued and run, not a point that the Court, with respect, thinks might have been available to be run.  If we are in the discourse of merger or in the area of Acts and agreements and how they interact, which I think was what your Honour was getting at ‑ ‑ ‑

HAYNE J:   Yes, a matter of prime importance in business and government today.

MR CRUTCHFIELD:   Sure, your Honour, but that is not the way this case was run below.  We would have referred to all the mining agreements that your Honour, of course, and Justice Keane know very well.  Then the interaction between Mining Acts and ‑ ‑ ‑

HAYNE J:   But this is radically different.  The mining agreements are scheduled; the agreement is approved by the Act.  This is radically different.  You have an apparently commercial contract with a “best endeavours legislate” clause.  You then have the Act.  Has this Court ever looked at that intersection, because the intersection is one which, correct me if I am wrong, seems to me to be of quite deep significance in the way in which private parties deal commercially with government ‑ ‑ ‑

MR CRUTCHFIELD:   Yes, your Honour.

HAYNE J:   ‑ ‑ ‑ and what happens if government, whether with the urging or without the urging of the private commercial party, enacts legislation to give effect to some or all of the terms.  That is the problem, to my mind, that you have to grapple with, Mr Crutchfield.

MR CRUTCHFIELD:   There is no question, with respect, that that is an important issue, and it is a matter of general importance, but the difficulty is that is not this case.  It is not the way it was argued below.  It was argued purely as a point of construction, and the Solicitor‑General made that clear in a number of places. 

For example – and we have copies of the transcript, if the Court would be assisted – in the Court of Appeal, Justice Whelan asked the Solicitor “Do you mean that the agreements be interpreted as being, once the Act comes into force, these provisions will no longer apply, or is there some principle of law that says once a contractual obligation is put in statute, that contractual obligation does not exist any more?”, which is perhaps, with respect, close to your Honour’s merger point and the Solicitor said, rightly, with respect, “It is a construction of the agreement, your Honour, to say that here there is a contractual promise and we are going to legislate to give effect to this promise”.  That is the way it was pleaded.  I can take your Honour to the pleadings that your Honour referred to, application book A32.

HAYNE J:   That is the separate bundle, yes.

MR CRUTCHFIELD:   Yes.  The first clause that our learned friend referred to, 11(b), that is a construction point, as is made clear from the opening line:

says further that, on the proper construction ‑ ‑ ‑

HAYNE J:   It is 11(c) that is the difficulty for you, because it has the magic words “were discharged by”.

MR CRUTCHFIELD:   Yes, but it was argued by way of implied repeal – it was all about implied repeal.

HAYNE J:   If you go to Chitty’s Contracts in about editions 23, 24, 25, you will find the subject “Discharge by merger”.

MR CRUTCHFIELD:   Yes.

HAYNE J:   That, to tell you no secrets, Mr Crutchfield, is what sparked my chain of thought.  Is this a case of discharge by merger?

MR CRUTCHFIELD:   We say it is not the right vehicle for the Court to answer that question because the State have not had one judge in their favour on the way that the case was run, which is what was the proper construction, and what was fatal to their case insofar as Tatts is concerned is the contract and the fact that that contract - we took the benefit of that contract in 2005.

Your Honours, can I also, while I am in the pleadings, refer to 15, which is at application book A34, and ask your Honours, please, to see (b)(iii).  The State pleaded what I endeavoured to put to your Honours earlier about the effect of the 1999 agreement.  It was:

to vary the terms of the 1995 Agreement so that they reflected the changes to the Trustees’ payment obligations –

To put that another way, the case was conducted on the basis that it is, in effect, an implicit acceptance that clause 3 of the 1995 agreement operated until then.  That is unsurprising too, your Honours, because it posits a situation where there is a contractual obligation on Tatts to make payment for the operation of the pokies business in this State.  There is introduced into the statute an obligation to make payments, which is similar to perhaps – let us say similar to, but not quite the same as the clause 3 obligation.  Then two years later, the statute is repealed, and the statute does not make mention of clause 3.

Would anyone seriously contend in that situation that Tatts could keep running the poker machines in this State and not pay any money to the government?  The State would no doubt bridle at that.  What they have said below unsuccessfully is essentially the opposite of that, and the arguments that your Honour raises about merger, they were never part of the case. 

The pleading, your Honour, 11(c), that your Honour Justice Hayne referred to, if you go to 27 and 28, which is the cross‑reference, the abrogation and discharge, your Honour – so the merger, in your Honour’s language – was not effected on the pleaded case by the 1996 amendments; it is effected by the 2009 amendments, and they lost that.

HAYNE J:   And legislation at every stage, is it not?

MR CRUTCHFIELD:   Not that they said, and that is not the way the argument was run below.  It was simply a matter of construction was the way Mr Karkar put it at the trial as well.  There may well – the course of the trial may well have been different.  I cannot say to your Honour that it certainly would have, but part of the background context ‑ ‑ ‑

HAYNE J:   No, but you have to give me more than that.  If you are going to take a Coulton v Holcombe point, I think, Mr Crutchfield, you have to be a little more precise than the bare possibility.

MR CRUTCHFIELD:   We know the 1995 agreement is entered into, that Justice Hargrave had regard to the background context or what was happening with Tabcorp and all the rest of it; your Honours know about that.  All I am saying is, if that were the case that we were to meet, there may well have been evidence led about what the context was at the point of the introduction of, I think your Honour is putting, the 1996 amendments – that is a case not even pleaded – but at the point of the 2009 amendments.  We do know, your Honours, that at the point of the introduction of the 2009 amendments, which is the case that was pleaded, there is no reference to the contract at all.

Your Honours, as Justice Hargrave said, with respect, it made perfect sense for those advising Tatts in 1995 to incorporate this valuable right in a contract as well, because everybody knows it is not politically palatable for a government to go around taking away people’s private rights, and the government did not do that here; they left the contract.  For all of those reasons, your Honours, we do say there is no point of general importance.  It was a pure contract construction case. 

We say that the matters that your Honour Justice Hayne has raised about merger were simply not the way the case was conducted below.  We do not dispute the proposition that they are important issues, the interaction

between a private contract and a legislation, but that is not the way in which this case comes up before the Court, at least the way it was formulated by your Honour Justice Hayne.  If the Court pleases.

HAYNE J:   Thank you, Mr Crutchfield.  Yes, Ms Harris.

MS HARRIS:   A couple of things, your Honour.  In relation to the 1999 agreement, we assert first that it is ex post evidence.  The question of construction arises four years earlier at the time at which the 1995 agreement is entered into and what is the intention of the parties at that point, upon the introduction of the legislation.

The second point we make about the 1999 agreement is that it says nothing whatsoever about clause 7.  There is nothing in that agreement that would suggest that anyone thought that clause 7 survived the enactment of the 1996 legislation.  It does not deal with the 1996 legislation at all, or the effect of it.  The question which is begged by both of these agreements, and not answered, is what parts of the 1995 agreement still subsist.  When we look at the transfer deed of 2005 and the key clause at page 257 of the application book, it says:

The rights and obligations of the Trustees arising pursuant to the 1995 Agreement as amended by the 1999 Agreement together with all rights and obligations of the Trustees arising pursuant to the 1999 Agreement are transferred to Tattersall’s –

That clause only transfers whatever rights and obligations still subsist, and the State’s case is that clause 7 did not still subsist at that point.  As I submitted to your Honours earlier, that is another reason which makes the reasoning in 214 of the Court of Appeal’s judgment problematic, because if clause 7 had ceased to exist in 1996, it could not be transferred and be enjoyed by Tatts post‑2005.

The other point is in relation to the way in which the case was argued below.  Your Honours, the other part of our pleadings to which I would refer the Court is paragraph 13 of our defence.  That paragraph of the defence responds to paragraph 13 of the statement of claim which pleads the 1996 legislation, the introduction of the provisions, and at paragraph (d), we say:

the enactment of the provisions . . . satisfied the obligations of the Minister –

and the obligations were spent.  For our part, your Honours, we cannot see how the trial would have been run any differently.  It is a legal point, so we would resist the proposition that there is any unfairness in allowing the

State to contend, as it does, that those 1996 amendments have the effect of bringing an end to those contractual obligations, whether treated as a matter of construction of the contract, or as a matter of the force of the statute in and of itself.  If the Court pleases.

HAYNE J:   Thank you, Ms Harris.  We will adjourn for a time to consider the course we should take in this matter.

AT 11.23 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.25 AM:

HAYNE J:   In each of these matters, there will be a grant of leave.  In the first of the applications, Tabcorp, Mr Archibald, your leave is limited by excluding the second part of the grounds you urge.

MR ARCHIBALD:   Yes.  We will amend our draft notice of appeal accordingly, if the Court pleases.

HAYNE J:   Yes.  The cases obviously will be fixed for hearing on the same day.  The way in which the hearing will be conducted will, of course, be a matter for the Full Court to determine, but there is evident sense in trying, as best counsel can, to avoid any duplication, particularly of authorities or statutory material, and if it were possible, as I suspect it should be, to produce a single bundle of legislation that affects both cases.  Obviously that is desirable.  It would seem likely that the cases together would occupy more than one day, but less than two?

MR ARCHIBALD:   Yes, your Honour, especially with our second ground not being before the Court.  Ours would be quite short, but it would be tight to fit both within one day.

HAYNE J:   Yes.  Do other counsel agree that together they are a two‑day fixture?

MR CRUTCHFIELD:   Yes, we do, your Honour.

HAYNE J:   Yes.  Those instructing counsel will be given the directions for the filing of submissions.  Those directions are to be complied with without fail.  Is there any other matter that counsel need to raise in either of these matters?  I think not.

MS HARRIS:   No, your Honour.

HAYNE J:   The Court will adjourn to reconstitute.

AT 11.27 AM THE MATTERS WERE CONCLUDED