Victoria v Tatts Group Limited

The High Court of Australia heard an appeal concerning the construction of a contract between the State of Victoria and Tatts Group Limited. The dispute arose from a clause in the 1995 Agreement that stipulated a payment to Tatts if a "new gaming operator's licence" was issued to a party other than Tatts. However, subsequent legislative amendments to the statutory scheme meant that gaming operator's licences could no longer be issued in the manner contemplated by the original agreement.

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.