HIGH COURT OF AUSTRALIA
FRENCH CJ,
KIEFEL, BELL, KEANE AND GORDON JJSTATE OF VICTORIA APPELLANT
AND
TATTS GROUP LIMITED RESPONDENT
Victoria v Tatts Group Limited
[2016] HCA 5
2 March 2016
M83/2015
ORDER
1.Appeal allowed with costs.
2.Set aside the orders of the Court of Appeal of the Supreme Court of Victoria made on 4 December 2014 and in their place order that:
(a)the appeal be allowed with costs;
(b)orders 1 and 2 of the orders of Hargrave J made on 27 June 2014 be set aside, and in their place order that the proceeding be dismissed with costs;
(c)the respondent pay the appellant $540,467,887.92 with interest, calculated from 27 June 2014.
On appeal from the Supreme Court of Victoria
Representation
W A Harris QC with R G Craig and K A Loxley for the appellant (instructed by Johnson Winter & Slattery)
N J Young QC with P D Crutchfield QC and N P De Young for the respondent (instructed by Clayton Utz Lawyers)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
Contract – Construction of terms – Where contract used statutory term "gaming operator's licence" – Where contract provided for payment to respondent if "new gaming operator's licence" issued to person other than respondent – Where statutory scheme amended so gaming operator's licence could no longer be issued – Meaning of "new gaming operator's licence" – Whether payment due.
Contract – Construction of terms – Context and purpose – Where commercial context regulated by statutory regime – Where letter from member of Executive annexed to contract – View of reasonable business people.
Contract – Construction of terms – Whether pre-existing contractual right operated independently of statutory right on same subject matter – Whether pre‑existing contractual right discharged or abrogated by subsequent legislative enactment.
Words and phrases – "gaming machine entitlement", "gaming operator's licence", "new gaming operator's licence".
Gaming Machine Control Act 1991 (Vic), Pt 3.
Gambling Regulation Act 2003 (Vic), Pts 4 and 4A of Ch 3.
FRENCH CJ, KIEFEL, BELL, KEANE AND GORDON JJ.
Introduction
The legalisation of gaming in Victoria in 1991 by the Gaming Machine Control Act 1991 (Vic) ("the 1991 Act"), the creation in 1992 of a duopoly in the gaming industry in Victoria by the issue of a gaming operator's licence to each of the Totalisator Agency Board of Victoria ("TAB") and the Trustees of the Will and Estate of the late George Adams ("Tatts"[1]) for a term of 20 years[2], the subsequent privatisation of TAB (resulting in the creation of Tabcorp Holdings Limited ("Tabcorp")) in 1994 and the enactment of the Gaming and Betting Act 1994 (Vic) ("the 1994 Act"), as well as the inclusion in the 1994 Act of a "terminal payment provision"[3] in favour of Tabcorp, are explained in the reasons published in the related appeal in Tabcorp Holdings Ltd v Victoria[4]. That factual and legislative…
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- Case
- [2016] HCA 5
- Decision Date
CaseChat Overview and Summary
The central legal issue before the court was the interpretation of the term "new gaming operator's licence" within the context of the 1995 Agreement, particularly in light of the amended statutory framework. The court was required to determine whether the contractual obligation to pay Tatts was triggered by the legislative changes, or if the absence of a mechanism to issue such a licence rendered the condition precedent impossible to fulfil, thereby excusing the State from payment. This involved considering whether the contractual right operated independently of the statutory right and whether the subsequent legislation discharged or abrogated the pre-existing contractual right.
The High Court reasoned that the 1995 Agreement, when read as a whole and in its commercial context, indicated that the parties intended the contractual provisions to operate even if the specific statutory mechanism for issuing a "gaming operator's licence" changed. The court found that the definition of "gaming operator's licence" in the relevant legislation was precise and did not permit an alternative, broader interpretation that would accommodate the changed circumstances. Consequently, the court concluded that the State's obligation to pay Tatts under the agreement was not discharged by the legislative amendments.
The appeal was allowed with costs. The orders of the Court of Appeal of the Supreme Court of Victoria were set aside, and in their place, the High Court ordered that Tatts Group Limited pay the State of Victoria $540,467,887.92, with interest calculated from 27 June 2014. The proceeding was dismissed with costs.
Orders
Orders of the court
1. Appeal allowed with costs.
2. Set aside the orders of the Court of Appeal of the Supreme Court of Victoria made on 4 December 2014 and in their place order that:
(a) the appeal be allowed with costs;
(b) orders 1 and 2 of the orders of Hargrave J made on 27 June 2014 be set aside, and in their place order that the proceeding be dismissed with costs;
(c) the respondent pay the appellant $540,467,887.92 with interest, calculated from 27 June 2014.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Established by: FRENCH CJ, KIEFEL, BELL, KEANE AND GORDON JJ
Full text does not contain this section.