A C Archibald QC and J C Sheahan QC with P G Liondas and B K Holmes for the appellant (instructed by Herbert Smith Freehills)
W A Harris QC with R G Craig and K A Loxley for the respondent (instructed by Johnson Winter & Slattery)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Tabcorp Holdings Limited v Victoria
Statutes – Interpretation – Where conjoined "wagering licence" and "gaming licence" issued under statutory scheme – Where statute provided for payment on "grant of new licences" – Where statutory scheme amended so no new wagering licence and gaming licence could be issued – Whether "grant of new licences" confined to grant of new wagering licence and gaming licence – Whether payment due.
Statutes – Interpretation – Context – Relevance of legislative history – Relevance of commercial context.
Statutes – Interpretation – Principle of legality – Whether principle engaged where nature of right is contingent and interest to be protected is limited.
Words and phrases – "gaming licence", "gaming machine entitlement", "grant of new licences".
Gambling activity involving the use of gaming machines was legalised in Victoria in 1991[1]. In 1992, the respondent, the State of Victoria ("the State"), issued each of the Totalisator Agency Board of Victoria ("TAB") and the Trustees of the Will and Estate of the late George Adams ("Tatts"[2]) a gaming operator's licence for a term of 20 years[3]. It was a duopoly. Neither TAB nor Tatts paid a fee to the State for the grant of their respective gaming operator's licences.
[2]In 1998, that estate was restructured and corporatised and Tatts Group Limited became the holder of the gaming operator's licence previously held by the Trustees. In these reasons, for convenience the Trustees and Tatts Group Limited are referred to as "Tatts".
In 1994, TAB was privatised. The Gaming and Betting Act 1994 (Vic) ("the 1994 Act") was enacted. Investors subscribed for shares in the appellant, Tabcorp Holdings Limited ("Tabcorp"), through a public float. Under the 1994 Act, Tabcorp was granted conjoined licences – a wagering licence and a gaming licence – for a term of 18 years. The duopoly was retained[4].
[4]Subject to the geographically and functionally limited exception of the Crown Casino.
The proceeds of the privatisation of TAB were paid to the State. The State was advised that, if Tabcorp was to be repaid the…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Tabcorp Holdings Ltd v Victoria [2016] HCA 4
Case
[2016] HCA 4
Decision Date
CaseChat Overview and Summary
The High Court of Australia heard an appeal from the Victorian Court of Appeal concerning the interpretation of a statutory provision regarding payments due upon the grant of new licences. The dispute arose between Tabcorp Holdings Ltd and the State of Victoria. Tabcorp contended that a payment was due to it under section 4.3.12(1) of the 2003 Act, which stipulated a payment on the "grant of new licences." Tabcorp argued that this provision applied to the allocation of gaming machine entitlements (GMEs), which it claimed constituted "new licences" in a broader sense, and that it was entitled to a payment calculated based on the value of its previous licences.
The central legal issue before the High Court was whether the phrase "grant of new licences" in section 4.3.12(1) of the 2003 Act encompassed the allocation of gaming machine entitlements, or if it was confined to the grant of new wagering and gaming licences as originally conceived under the statutory scheme. This required the Court to consider the specific wording of the provision, the legislative history surrounding the regulation of gaming and wagering in Victoria, and the commercial context in which the legislation was enacted. The Court also considered whether the principle of legality had any application in this context.
The High Court, affirming the decision of the Court of Appeal, held that the phrase "new licences" in section 4.3.12(1) was confined to the grant of a new wagering licence and a new gaming licence under Part 3 of Chapter 4 of the 2003 Act. The Court reasoned that this interpretation was compelled by the textual considerations within the 2003 Act itself, which established a specific framework for these two types of licences. Furthermore, the legislative history, including the evolution of the statutory provisions from earlier Acts, and the commercial context of a long-standing duopoly in the gaming machine industry, supported this narrower construction. The Court found that Tabcorp's argument that GMEs constituted "new licences" for the purposes of section 4.3.12(1) was not supported by the statutory language or its surrounding context, particularly as GMEs were allocated to multiple venue operators, not just a single successor licensee.
The appeal was dismissed with costs.
Orders
Orders of the court
Appeal dismissed with costs.
Background
Background to the litigation
These reasons will set out the facts and legislative history and then turn to the question of construction of s 4.3.12(1) of the 2003 Act. Facts and legislative frameworkIntroduction of gaming in Victoria and the creation of the duopoly In Victoria, gambling activity involving the use of gaming machines was illegal until the introduction of the Gaming Machine Control Act 1991 (Vic) ("the 1991 Act"). The 1991 Act legalised such conduct by providing for the grant of a "gaming operator's licence", which authorised the holder to conduct gaming on gaming machines at approved venues in Victoria. On 14 April 1992, the State issued each of TAB and Tatts a gaming operator's licence for a term of 20 years[8]. Neither TAB nor Tatts paid a fee to the State for the grant of its gaming operator's licence.[8]Under s 33 of the 1991 Act. The licences authorised TAB and Tatts to conduct gaming on gaming machines at approved venues in Victoria. Section 14 of the 1991 Act set out the authority conferred by a gaming operator's licence as follows:"(1)… a gaming operator's licence authorises the licensee, subject to this Act and any conditions to which the licence is subject—(a)to obtain from manufacturers and suppliers listed on the Roll [of Recognised Manufacturers and Suppliers of Gaming Machines and Restricted Components] approved gaming machines and restricted components; and(b)to manufacture approved gaming machines and restricted components; and(c)to supply approved gaming machines and restricted components to venue operators; and (d)to conduct gaming at an approved venue; and(e)to sell or dispose of gaming equipment with the approval of the Commission; and(f)to service, repair or maintain gaming equipment through the services of licensed technicians; and(g)to do all things necessarily incidental to carrying on the activities authorised by this section.(2)In this section 'approved gaming machines' means gaming machines of a type approved by the Commission under section 69." The 1991 Act also provided for the grant of a venue operator's licence[9]. Section 13 of the 1991 Act set out the authority conferred by a venue operator's licence as follows:"… a venue operator's licence authorises the licensee, subject to this Act and any conditions to which the licence is subject—(a)to obtain from a gaming operator, gaming machines of a type approved by the Commission under section 69; and(b) to possess gaming equipment; and(c)to do all things necessarily incidental to carrying on the activities authorised by this section."[9]s 13 and Div 2 of Pt 3 of the 1991 Act. TAB's gaming division began operating gaming machines in licensed clubs and hotels in Victoria on 16 July 1992. Tatts commenced gaming operations in Victoria on 6 August 1992. Neither TAB nor Tatts ever held a venue operator's licence. Instead, TAB and Tatts had contractual arrangements with the holders of venue operator's licences. From 1992, TAB and Tatts each held half of Victoria's gaming industry (outside of the Crown Casino) whilst they each held one of the two gaming operator's licences issued by the State under the 1991 Act. That duopoly remained until 2012, when their licences expired.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
FRENCH CJ, KIEFEL, BELL, KEANE AND GORDON JJ
The second purpose for s 4.3.4A identified by Tabcorp was to "cut back to a single iteration the operation of [s] 4.3.12 to allow it to apply in respect of [Tabcorp's] licences but not other licences"[67]. That contention should also be rejected. If the "grant of new licences" in s 4.3.12(1) referred to licences other than the wagering licence and the gaming licence, such as GMEs, and the holder of the licences last in force is Tabcorp (as contended for by Tabcorp), it is readily apparent that the operation of s 4.3.12 cannot be "cut back to a single iteration". 27,300 GMEs were allocated to multiple licensed venue operators. On Tabcorp's own construction, s 4.3.12 would not operate once but rather would operate each and every time a GME was allocated because, on each occasion, Tabcorp would be the holder of the licences last in force. And questions about the calculation of the payment under the balance of s 4.3.12(1) would also remain[68]. [67][2015] HCATrans 288 at 546-548.[68]See [60]-[64] above.Conclusion on proper construction of s 4.3.12(1) of the 2003 Act The Court of Appeal was right to conclude that "new licences" in s 4.3.12(1) of the 2003 Act must mean a new wagering licence and a new gaming licence granted under Pt 3 of Ch 4 of the 2003 Act[69]. The Court of Appeal was also right to say that the conclusion followed from textual considerations in the 2003 Act[70]. Both the relevant legislative history and the commercial context revealed by the legislation also support that conclusion. Those matters will now be addressed.[69]Tabcorp Holdings Ltd v Victoria [2014] VSCA 312 at [23].[70]Tabcorp Holdings Ltd v Victoria [2014] VSCA 312 at [23(1)-(8)].Legislative history The legislative history of s 4.3.12, the regulation of the gaming industry in Victoria and the commercial context of the 2003 Act support and are consistent with the phrase "new licences" in s 4.3.12(1) meaning a new wagering licence and a new gaming licence granted under Pt 3 of Ch 4 of the 2003 Act. As noted earlier, gambling activity involving the use of gaming machines was legalised in Victoria in 1991. From 1992 until the expiration of Tabcorp's and Tatts' licences in 2012, the gaming machine industry was a duopoly. Whilst that duopoly remained in place, the statutory framework addressed the specific licences held by Tabcorp and Tatts. Tatts held its licence under the 1991 Act. Tabcorp, because of TAB's privatisation, held its conjoined licences under the 1994 Act.1994 Act As seen earlier, the predecessor to s 4.3.12 in the 2003 Act was s 21 of the 1994 Act. Section 21 of the 1994 Act appeared in "Part 2—Wagering Licence and Gaming Licence", as the first section in Div 4 ("Entitlement of former licensee"), immediately following Div 3 ("Grant of licences after initial licences"). Section 21(1) provided:"On the grant of new licences (other than the initial licences), the person who was the holder of the licences last in force (in this section called the 'former licences') 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."
Ratio Decidendi
Legal Principle Established
Established by:
FRENCH CJ, KIEFEL, BELL, KEANE AND GORDON JJ