One Foundation Ltd v Minister of Internal Affairs
[2023] NZHC 3869
•21 December 2023
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2023-485-413
[2023] NZHC 3869
UNDER the Judicial Review Procedure Act 2016; Part 30 of the High Court Rules; the Declaratory Judgments Act 1908; and the Common Law IN THE MATTER
of an application for judicial review and/or for declaratory judgments
BETWEEN
ONE FOUNDATION LTD
First Applicant
AIR RESCUE SERVICES LTD
Second ApplicantKIWI GAMING FOUNDATION LTD
Third Applicant
GAMING MACHINE ASSOCIATION OF NEW ZEALAND INC
Fourth ApplicantAND
THE MINISTER OF INTERNAL AFFAIRS
Respondent
Hearing: 20 November 2023 Appearances:
M S Smith and J W True for Applicants K B Bell and S J Smith for Respondent
Judgment:
21 December 2023
JUDGMENT OF LA HOOD J
ONE FOUNDATION LTD v THE MINISTER OF INTERNAL AFFAIRS [2023] NZHC 3869 [21 December 2023]
Table of Contents
Para No.
A judicial review challenge to regulations made under the
Gambling Act 2003[1]
Issues to be determined[11]
The approach to review in this statutory context[14]
The process challenge[31]
The interpretation of s 372(5) of the Act[31]
Are there any additional obligations under the common law or s 27(1)
NZBORA?[41]
Has there been a breach of s 372?[46]
Legitimate expectation[63]
The substantive challenge to the contents of the Regulations [65]
Improper criminalisation of unspecified conduct[65]
Workability of the cash withdrawal duties[77]
Workability of the sweep duties[82]
Casinos[86]
The Department’s guidance document[89]
Conclusion[90]
Appendix – extracts from the Regulations
A judicial review challenge to regulations made under the Gambling Act 2003
[1] The applicants, One Foundation Ltd, Air Rescue Services Ltd, Kiwi Gaming Foundation Ltd and Gaming Machine Association of New Zealand Inc bring judicial review proceedings against the Minister of Internal Affairs. They challenge the process that led to the promulgation of the Gambling (Harm Prevention and Minimisation) Amendment Regulations 2023 and the associated guidance, alleging particularly that the consultation process was unfair. The applicants also challenge the substance of the Regulations, alleging that they are unworkable and counterproductive to the aim of minimising harm.
[2] The Regulations came into force on 1 December 2023 under the Gambling Act 2003. They address harm from gambling occurring at class 4 gabling venues, where electronic gaming machines are used, such as pubs, clubs and some TAB venues. The process underlying the Regulations began in August 2021.
[3] In March 2022, Cabinet agreed to, and the Department of Internal Affairs (“Department”) released a discussion document entitled “Reducing Pokies Harm Public Discussion Document”, outlining areas of improvement in existing regulations and seeking feedback on a range of options aimed at reducing gambling harm in class 4 gambling venues. Public consultation on the document ran from its release on 17 March 2022 until 28 April 2022. A total of 1,983 written submissions were received. The fourth applicant, along with some other submitters, were able to submit until 12 May 2022. Consultation also involved 11 online consultation hui with interested groups. As well, a hui was held with class 4 operators, such as the first to third applicants, and a hui was held with the fourth applicant as the representative body of class 4 operators in New Zealand, both in April 2022.
[4] Following the consultation process, the Department evaluated the regulatory options in light of the feedback received, which in turn informed the policy advice and options presented to the Minister. On 28 September 2022, Cabinet agreed to introduce a range of requirements for class 4 gambling venues, with the Minister to issue drafting instructions. This was publicly announced on 18 November 2022 with related Cabinet
documents being released and published on the “Proactive Releases” page of the Department’s website on 24 November 2022.
[5] The Department then undertook further consultation between December 2022 and January 2023 with groups it considered were likely to be substantially affected by the Regulations. This included the fourth applicant, who along with other representatives was provided with an exposure draft of the Regulations for their views on workability and clarity. The representatives were also notified of the documents that came under the proactive release of Cabinet Papers and the Regulatory Impact Statement, which were all by this point publicly available. The draft regulations, however, were subject to legal privilege. Over the course of this second stage of the consultation, the Department approved requests by various representatives to share the draft regulations with specified people. Again, the process sought written feedback and feedback through online consultation hui.
[6] In late January 2023, the Department finalised the draft regulations. I note the particular aspects of the Regulations that the applicants’ substantive challenge relates to:
(a)Cash withdrawal duties: that withdrawing, or attempting to withdraw, cash from an automatic teller machine (ATM) or EFTPOS device on two or more occasions in one day to use for gambling at a venue is a sign of harm, requiring venue personnel to have a conversation with the player and keep a record which the venue manager would then use to assess whether appropriate action was taken following the withdrawals; and
(b)Associated sweep duties: the requirement to conduct gambling area sweeps (three gaming room sweeps per hour) and keep associated records to monitor and identify players who have been gambling during consecutive sweeps.
[7] On 15 May 2023, the Regulations were promulgated by the Executive Council under ss 313 and 316 of the Act. To support the implementation of the Regulations,
the Department developed a guidance document in consultation with stakeholders, including the applicants. This involved participation in focus groups to provide feedback on a draft version of the guidance document which was then incorporated into the final guidance document published on 2 November 2023.
[8] The applicants’ case is that the consultation process was flawed. They allege that key stakeholders were excluded and the participation of those selected was unreasonably constrained. That has resulted in unworkable and inherently unsuitable regulations. The applicants seek a declaration that the consultation process was unlawful and an order quashing the Regulations and requiring the process to be restarted afresh. If the Regulations are not quashed in their entirety, the applicants seek that the Regulations relating to the cash withdrawal duties and the associated sweep duties be severed and quashed. In summary, they allege:
(a)In relation to process, the first to third applicants were deprived of the opportunity to comment on aspects of the Regulations, and the first to third applicants’ legitimate expectation in relation to consultation was breached. The Discussion Document that the first to third applicants were consulted on did not include specific details of the cash withdrawal duties or the associated sweep duties that were later implemented. This meant that the first to third applicants did not get a chance to comment on those aspects in their consultation submissions. Nor were the two aspects under challenge among the options discussed in the online hui in April 2022. At the second stage, where consultation took place between the Department and representative groups on the draft regulations, the claim of privilege over the draft regulations hindered efforts to undertake wide consultation resulting in the exclusion of key stakeholders, such as venue managers and staff.
(b)In relation to the challenge to the substance of the Regulations, the applicants allege that the cash withdrawal duties and associated sweep duties criminalise omissions relating to unspecified signs of harm (through a non-exhaustive list of signs of harm), are contrary to the rule of law and unlawful and invalid for uncertainty. As well, the draft
guidance goes beyond the Regulations rendering it unlawful, irrational, unreasonable and/or disproportionate. Finally, there is a lack of evidence for these aspects of the Regulations, they are disconnected with the way gambling in casinos is regulated, and they are operationally unworkable.
[9] Affidavit evidence was filed for the applicants by Kerry Bird, the Chief Executive of One Foundation Ltd; Martin Cheer, a member of the executive committee of the Gaming Machine Association of New Zealand as well as the Managing Director and Chief Executive of Pub Charity Ltd; Sheldon Bell, the Chief Executive of Kiwi Gaming Foundation Ltd; Barry Steans, Managing Director of Air Rescue Services Ltd; Wibo Bosma, General Manager of Next Payments New Zealand Ltd; Peter Dengate-Thrush, the independent chair of the Gaming Machine Association of New Zealand; and Tony Crosbie, an Executive Committee member of Gaming Machine Association of New Zealand. The respondent filed affidavit evidence from Suzanne Doig, the Department’s General Manager Policy Group and Victoria Scott, the Department’s Director Regulatory System (Gambling).
[10] Attached to this judgment as an appendix is a copy of the relevant regulations, namely regs 13, 14, 15 and 16, and the Schedule to the Regulations.
Issues to be determined
[11]There are two overarching issues:
(1)whether the process of making the Regulations was unlawful (“the process challenge”); and
(2)whether the content of the Regulations is unlawful (“the substance challenge”).
[12]In relation to the process challenge, the following issues arise:
(a)Did the respondent comply with the statutory consultation requirements in s 372 of the Gambling Act?
(b)If so, does the common law or s 27(1) of the New Zealand Bill of Rights Act 1990 (“NZBORA”) add additional requirements to those contained in s 372 of the Act? If so, were they complied with?
(c)Was there a legitimate expectation that the first and third applicants would be consulted directly at the second stage of the consultation process?
[13]In relation the substance challenge, the following issues arise:
(a)Are the Regulations invalid because they create an impermissible open- ended discretion in respect of criminal liability?
(b)Are the cash withdrawal duties, requiring venue staff to assess the number of cash withdrawals made by players, unworkable?
(c)Are the associated sweep duties unworkable?
(d)Does the discrepancy between the regulation of class 4 venues and casinos make the Regulations invalid?
(e)Is the related guidance contained in the guidance document unlawful?
The approach to review in this statutory context
[14] There was some discussion at the hearing about the appropriate approach to review in this context. I consider helpful Cooke J’s recent framing of the approach to the judicial review of statutory powers. Under this approach, the starting point is identifying the express and implied legal limits on the power conferred by the statute. The key question is not the intensity with which the Court reviews the exercise of the power, but whether its exercise comes within its identified legal controls.1
1 Patterson v District Court, Hutt Valley [2020] NZHC 259 at [14]–[16]; and New Zealand Council of Licensed Firearms Owners Inc v Minister of Police [2020] NZHC 1456 at [83]–[85].
[15]The respondent referred to Turners & Growers Ltd v Zespri Group Ltd (No 2)
for a summary of the applicable law. I note the following passages:2
[21] The Supreme Court judgment in Cropp is also authority for the proposition that Parliament would not intend to authorise regulations that cannot be given an ascertainable and reasonable meaning. Parliament would not intend regulations to be so conceptually uncertain or unreasonable in their application that they were ambiguous.
[22] Reference to the reasonableness of meaning does not, however, mean that the Court is concerned with the reasonableness of the regulation in policy terms because that is the responsibility of the Government which promulgated the regulation. As Cooke J said in New Zealand Drivers’ Association v New Zealand Road Carriers:
It is elementary that the Court is not concerned with the wisdom or otherwise of regulations, nor with whether the Court considers them necessary, nor with assessing the comparative values of social policies.
Whether regulations fall within the authority of an empowering statute is in the end a question of opinion and degree: Brader v Ministry of Transport.
[23] The distinction between reasonableness in policy terms and reasonableness of meaning was recognised by Greig J in Ross v Secretary for Transport:
It is plain, I think, that the Courts are not entitled to inquire into policy considerations or as to the appropriateness, the desirability, whether the regulations are fitting or fair in the general circumstances. In that sense the Courts may not consider the reasonableness or unreasonableness of the regulations or their effect. But there is a sense where unreasonableness means contrary to reason or, in another word, irrational. If that may be shown then the Court must be entitled to say that the regulation is made outside the powers given by the legislature and is therefore invalid. Like all such questions it is, in the end, a matter of degree.
(Emphasis added)
[24] The need for the Court to take care in focussing on the legal limits of the exercise of the regulation making power rather than on assessing the merits of its exercise reflects the general approach of the Court to the review of the exercise of statutory powers. As the Supreme Court said in Unison Networks Ltd v Commerce Commission in the judgment of the Court delivered by McGrath J:
[53] A statutory power is subject to limits even if it is conferred in unqualified terms. Parliament must have intended that a broadly framed discretion should always be exercised to
2 Turners & Growers Ltd v Zespri Group Ltd (No 2) (2010) 9 HRNZ 365 (HC) at [21]–[23] (footnotes omitted).
promote the policy and objects of the Act. These are ascertained from reading the Act as a whole. The exercise of the power will be invalid if the decision maker “so uses his discretion as to thwart or run counter to the policy and objects of the Act”. A power granted for a particular purpose must be used for that purpose but the pursuit of other purposes does not necessarily invalidate the exercise of public power. There will not be invalidity if the statutory purpose is being pursued and the statutory policy is not compromised by the other purpose.
[54] Ascertaining the purpose for which a power is given is an exercise in statutory interpretation which is not always straightforward. This is partly because legislative regimes differ in the specificity with which they grant powers. In this area the courts are concerned with identifying the legal limits of the power rather than assessing the merits of its exercise in any case. They must be careful to avoid crossing the line between those concepts.
[55] Often, as in this case, a public body, with expertise in the subject-matter, is given a broadly expressed power that is designed to achieve economic objectives which are themselves expansively expressed. In such instances Parliament generally contemplates that wide policy considerations will be taken into account in the exercise of the expert body’s powers. The courts in those circumstances are unlikely to intervene unless the body exercising the power has acted in bad faith, has materially misapplied the law, or has exercised the power in a way which cannot rationally be regarded as coming within the statutory purpose.
(Footnotes omitted. Emphasis added.)
[16] The Supreme Court’s above discussion in Unison of the correct approach to the judicial review of statutory powers appears to generally accord with Cooke J’s approach.3 The Supreme Court said that, when assessing the purpose for which a power is given, the courts “are concerned with identifying the legal limits of the power rather than assessing the merits of its exercise in any case” and that they “must be careful to avoid crossing the line between those concepts”.4 The Court then recognised that a public body can be given broadly expressed, wide policy-based regulatory powers, which the courts will be reluctant to interfere with in the absence of bad faith, material misapplication of the law, or a decision that cannot rationally be regarded as coming within the statutory purpose.
3 Unison Networks Ltd v Commerce Commission [2007] NZSC 74, [2008] 1 NZLR 42 at [53]–[55].
4 At [54].
[17] In other words, the legal limits or controls on the statutory power may be such that they confer on the decision-maker a wide discretion. Although this approach may be practically equivalent to recognising that context may require a variable intensity of review,5 I agree with Cooke J that the fundamental question is not the intensity with which the Court reviews the decision, but the identification of the legal limits on the power.6 As Cooke J has noted “it is the nature and extent of the legal controls that vary between cases, not the intensity with which the Court assesses compliance with them”.7 For example, when fundamental rights are engaged, the NZBORA, international human right instruments and the common law are likely to provide additional limits on the exercise of the power.
[18]The starting point is the statutory scheme. The purpose of the Act is to:8
(a)control the growth of gambling; and
(b)prevent and minimise harm from gambling, including problem gambling; and
(c)authorise some gambling and prohibit the rest; and
(d)facilitate responsible gambling; and
(e)ensure the integrity and fairness of games; and
(f)limit opportunities for crime or dishonesty associated with gambling and the conduct of gambling; and
(g)ensure that money from gambling benefits the community; and
(h)facilitate community involvement in decisions about the provision of gambling
[19] The purpose, at (b) and (d), expressly includes “prevent[ing] and minimis[ing] harm from gambling, including problem gambling” and “facilitat[ing] responsible gambling”. The other matters set out in the purpose appear aimed at limiting and controlling gambling, or ensuring that community benefits from the money generated by it and is involved in decisions about its provision.
5 See, for example, Lawyers for Climate Action NZ Inc v The Climate Change Commission [2022] NZHC 3064 at [69]–[76].
6 Patterson v District Court, Hutt Valley, above n 1, at [14]
7 At [16].
8 Gambling Act 2003, s 3.
[20] “Problem gambler” is defined by s 4 of the Act to mean “a person whose gambling causes harm or may cause harm.”
[21]“Harm” is further defined by s 4:
(a)means harm or distress of any kind arising from, or caused or exacerbated by, a person’s gambling; and
(b)includes personal, social, or economic harm suffered–
(i)by the person; or
(ii)by the person’s spouse, civil union partner, de facto partner, family, whanau, or wider community; or
(iii)in the workplace; or
(iv)by society at large.
[22] Subpart 3 of pt 4 of the Act is entitled “Regulations relating to harm prevention and minimisation”. Under subpt 3 pt 4, s 316(1)(a) allows for regulations to be made:
prescribing 1 or more procedures to enable a venue manager, the holder of a class 4 operator’s licence or the holder of a casino operator’s licence, or a person acting on behalf of any of those persons, to identify problem gamblers (including the sources of information that must or may be considered or sought to assist in identifying problem gamblers):
[23]Section 316(2) provides:
Regulations made under subsection (1) may—
(a)specify the grounds on which a person may be identified as a problem gambler:
(b)set out the steps to be taken to identify a person as a problem gambler
…
[24] Section 317 of the Act allows the Government to allocate responsibility to a Government department for an integrated problem gambling strategy. This must include measures to promote public health by preventing and minimising the harm to gambling, services to treat and assist problem gamblers and their families and whānau, independent research on the impacts of gambling, and evaluation. The Ministry of
Health has been given responsibility for this strategy and its 2022/23 to 2024/25 report runs to 96 pages.9
[25] The Act has a series of express purposes to fulfil its public welfare object. The Act recognises that problem gambling is a significant public welfare issue, the harm from which is succinctly defined in s 4 of the Act. The statutory purposes, and the regulation-making provisions in subpt 3, indicate the conferring of wide discretionary regulation-making powers to fulfil the public welfare policy objective of the Act.10
[26] There are recent cases, in similar legislative contexts, where the courts have held that a statutory power confers a wide discretion to implement controls aimed at minimising public harm. In the alcohol regulation context, the Supreme Court and Court of Appeal have recently confirmed the appropriateness of local authorities taking a precautionary approach to regulatory measures in local alcohol policies aimed at minimising alcohol related harm.11 Notably, the twin objects of the Sale and Supply of Alcohol Act 2012 mirror the purposes in s 3(b) and (d) of the Act, namely minimising alcohol-related harm from excessive or inappropriate drinking and ensuring the sale, supply and consumption of alcohol is undertaken safely and responsibly.12
[27] Likewise, a precautionary approach has been taken to the Government’s regulatory response to the Covid-19 pandemic. The approach was explained in Yardley v Minister for Workplace Relations and Safety as follows:13
[94] Even a modest vaccination protection on a modest number of personnel needs to be considered in the context of the potential effects of a pandemic. In Four Aviation Security Service Employees v Minister of COVID-19 Response I referred to what can be described as the precautionary principle as being of real significance. I indicated that in the case of the Aviation Security workers who were at a key location where COVID-19 might first enter New Zealand, which at that stage had managed to eliminate COVID, this principle should operate. This principle has been explained in other COVID-19 related cases, particularly in Canada. In Spencer v
9 Ministry of Health, Strategy to Prevent and Minimise Gambling Harm 2022/23 to 2024/25
(Ministry of Health, June 2022).
10 Ross v Secretary for Transport HC Wellington CP No 531/89, 4 April 1990 at 8.
11 Woolworths New Zealand Ltd v Auckland Council [2023] NZSC 45, [2023] 1 NZLR 113 at [84]; and Auckland Council v Woolworths New Zealand Ltd [2021] NZCA 484 at [56]–[64].
12 Sale and Supply of Alcohol Act 2012, s 4.
13 Yardley v Minister for Workplace Relations and Safety [2022] NZHC 291.
Attorney-General of Canada the Federal Court of Ontario addressed this concept in relation to restricting entry into Canada. Pentney J said:
… The precautionary principle is a foundational approach to decision-making under uncertainty, that points to the importance of acting on the best available information to protect the health of Canadians. The Order is a public health measure that was adopted based on available scientific evidence from Canada and abroad, and it gives effect to the precautionary principle in a manner that reflects the Government of Canada’s overall assessment of the risks posed by the previously circulating virus and variants, and the lack of alternatives to mitigate it given the current state of knowledge of the virus.
Viewed in light of the precautionary principle, the fact that the Order may not provide perfect protection is not particularly significant. The evidence shows that the challenged measures are a rational response to a real and imminent threat to public health, and any temporary suspension of them would inevitably reduce the effectiveness of this additional layer of protection. This, in turn, would have a significant—perhaps deadly—effect on the wider Canadian public, based on the experience thus far.
[95] I agree with that approach. It is consistent with the one I applied in Four Aviation Service Employees. But the position is different here as this Order is not sought to be promulgated and justified on a public health need to suppress the spread of the virus. Rather it is imposed for the purpose of ensuring continuity of, and confidence in, essential services. One of the main justifications for the precautionary approach is the health risk to the wider public. That is not suggested as relevant here. But I accept that there may be an analogous concept—if there was evidence of a threat to the continuity of Police and NZDF services then there is room for giving the Crown the benefit of the doubt in imposing measures to address that risk. It is plain that such services are of vital importance, and that they can be needed during the pandemic. In the last few months the effects of the tsunami in Tonga, and the occupation of the grounds of Parliament and the surrounding areas by protesters demonstrates the need to ensure such services are readily available.
(Emphasis added and footnotes omitted.)
[28] In New Zealand Council of Licensed Firearms Owners Inc v Minister of Police, in the context of the Minister’s regulatory approach under the Arms Act 1983, Cooke J held: 14
[93] Whilst the safety of the public is an overall objective of this regime, it is not correct to say that measures can only be imposed under the Act once each measure has been demonstrated by some evidential foundation to so improve safety. It is equally consistent with the purposes of the Act to achieve safety in a broader or more indirect sense. A precautionary approach is plainly open. The Minister did not conduct a relative safety analysis between the categories of ammunition that were to be prohibited, and conventional
14 New Zealand Council of Licensed Firearms Owners Inc v Minister of Police, above n 1, at [93].
ammunition. But he did not need to do so in order to fulfil the purposes of the Act. His approach was at a higher level, and involved the application of a policy view. …
[Emphasis added.]
[29] It is important to note, like selling or consuming alcohol,15 or smoking tobacco,16 gambling and operating gambling venues is not a right. The ability to gamble and to operate a gambling business is only conferred under the Act and on its terms.17
[30] All of this leads to the conclusion that the legal limits on the regulation-making powers conferred by the Act provide the Minister with a wide discretion. It involves high-level policy choices in relation to which the Minister is entitled to take a precautionary approach. The Court will not intervene unless a decision could not rationally have come within this wide discretion.18
The process challenge
The interpretation of s 372(5) of the Act
[31]Section 372 of the Act provides:
372 Consultation before regulation
(1)This section applies to regulations proposed to be made under sections 17, 21, 86, 114, 116, 172, 219, 301, 313 to 316, 327, 360, 368, 370, 370A, and 371.
(2)Before making regulations under those sections, the Minister must consult, or be satisfied that the Secretary has consulted, in accordance with subsections (3) and (4).
(3)The Minister or the Secretary must consult with the persons or organisations that appear to the Minister or the Secretary to be representative of the interests of persons likely to be substantially affected by the relevant regulations.
15 Auckland Council v Woolworths New Zealand Ltd (CA), above n 11, at [22]; and Woolworths New Zealand Ltd v Auckland Council (SC), above n 11, at [85].
16 B v Waitemata District Health Board [2017] NZSC 88, [2017] 1 NZLR 823 at [136].
17 Gambling Act, s 9. Auckland Council v Woolworths New Zealand Ltd (CA), above n 11, at [22].
18 My understanding is that Mr Smith, for the applicants, accepted that it would be open to the Court to conclude that the statutory context allowed the Minister a “wide margin of discretion” (which I believe was his term), or to put it in more traditional terms that the equivalent of Wednesbury unreasonableness would be required: Associated Provincial Picture Houses v Wednesbury Corporation [1947] All ER 680, [1948] KB 223.
(4)The process for consultation should, to the extent practicable in the circumstances, include—
(a)giving adequate and appropriate notice of the intention to make the regulations; and
(b)giving a reasonable opportunity for interested persons to make submissions; and
(c)adequate and appropriate consideration of submissions.
(5)A failure to comply with this section does not affect the validity of regulations made.
[32] The parties were unable to refer me to any New Zealand or overseas authority that deals with a clause analogous to s 372(5). I have also not been referred to any legislative history that might assist with its interpretation.19
[33] The starting point is that there is no general obligation to consult in the drafting of regulations.20 In Fowler & Roderique Ltd v Attorney-General,21 the Minister issued a notice that amounted to delegated legislation under the Fisheries Act 1908 in respect of oyster fishing in Foveaux Strait. The Court of Appeal held that as the notice was made within the purposes of the empowering statute and for the general public purposes for which the power was provided, a strong case would be required before
19 I note the Legislation Design and Advisory Committee’s Legislation Guidelines (September 2021), at 102, states:
Judicial review should generally remain available as a means of challenging the adequacy of a consultation process.
Generally, any failure to comply with the legislative process for making a decision (including a failure to consult) can be challenged by judicial review. If the failure involves a decision to make legislation, a failure to comply with a consultation obligation can also be queried by the Regulations Review Committee.
Sometimes, consultation provisions in legislation contain a provision stating that a failure to comply with the requirement to consult before making a decision does not affect the validity of that decision. The purpose of this protection is to save a decision from an attack on its validity due to a minor or technical error in the course of a genuine consultation process (perhaps because a particular person missed out on being consulted or some minor information was not communicated). It does not generally protect against a deliberate decision not to consult in the face of a statutory obligation. Also, it does not save the decision if the lack of consultation means that relevant considerations were not taken into account or irrelevant considerations were taken into account.
However, this type of concern can often be addressed in other ways, for example, by clearly specifying the consultation process or by giving the decision maker some discretion as to how far to go in determining which members of a group need to be consulted. A validating provision may still be appropriate to ensure that minor or technical failures do not affect the validity of the decision. However, the scope of the validating provision should be clear.
[Footnote omitted.]
See also Ministry of Justice Departmental Report: Statutes Amendment Bill (27 June 2022) at 11-12.
20 The parties only referred to one case where there was a statutory obligation to consult during the process of enacting secondary legislation, but there was no provision equivalent to s 372(5) in the statute under consideration in that case: McInnes v Minister of Transport [2001] 3 NZLR 11 (CA).
21 Fowler & Roderique Ltd v Attorney-General [1987] 2 NZLR 56 (CA).
the Court would intervene. Somers J said the exercise of the power to issue the notice was not “attended to by any general obligation to call for submissions”, but went on to say:22
Whether any particular person should be given an opportunity to be heard before a power is exercised depends upon the circumstances. If the exercise of the power is likely to affect the interests of an individual in a way that is significantly different from the way in which it is likely to affect the interests of the public generally, the person exercising the power will normally be expected to have regard to the interests of the individual before it is exercised. Where a person having no legal right to the renewal of the licence or permit has a reasonable and legitimate expectation of renewal the Court will normally intervene to protect that expectation by judicial review.
[34] The Minister’s notice had the effect of “selective” legislation against the applicant’s ability to hold a permit to fish for oysters. Although that was justified by the purposes of the legislation, given the complex procedural history of disputes between the Ministry and the applicant and the selective effect of the notice on the applicant’s rights, Somers J concluded that he was “inclined to think that the whole background leading to the final reluctant grant of a permit is such that an opportunity to make submissions, or to be heard, should have been given”.23 However the Court declined a declaration because the relevant law had been so “wholly changed” it would achieve nothing.24 It seems Fowler confirms that a failure to consult will not generally be grounds to declare secondary legislation invalid unless the provision has significant selective effects on an individual.
[35] The applicants submit that the plain words of s 372(5) neither prevent judicial review nor the ability to declare the Regulations invalid. The respondent’s position is that s 372(5) does not prevent judicial review, but any remedy is limited to a declaration of a breach of the section rather than a declaration that the Regulations are invalid. The respondent submits this must be the effect of the clear words that a failure to comply with s 372 “does not affect the validity of regulations made”.
22 At 74.
23 At 74.
24 At 74.
[36] The authorities I have been referred to relate to quite different statutory provisions. The most recent case cited was Zaoui v The Attorney-General.25 That case dealt the with following privative clause:26
Except on the ground of lack of jurisdiction, no proceeding, report, or finding of the Inspector-General shall be challenged, reviewed, quashed or called in question in any court.
[37] In Zaoui the Court noted that this “particular form of privative clause is therefore a legislative indication that judicial review on grounds of lack of jurisdiction (in the Anisminic sense) is available”.27 Lack of jurisdiction in the “Anisminic sense” was noted by the Court as being well established in New Zealand as, subject to statutory context, “material errors of law”.28 Despite the privative clause, the Court concluded there was nothing in the statutory context that meant review was intended to be unavailable for errors such as denial of natural justice and failure to have regard to international human rights instruments.29
[38] The plain words of s 372(5) do not purport to limit the availability of judicial review, nor do they expressly limit the remedies available on review. The section makes no reference to the courts or their jurisdiction. As Zaoui demonstrates, even language expressly limiting the court’s jurisdiction will not be interpreted as preventing invalidity due to a material error of law such as a breach of natural justice. As the Court in Zaoui also noted, the interpretation of a provision that is said to limit the Court’s jurisdiction must be read consistently with ss 6 and 27(2) of NZBORA. In my view, much clearer language would be required for s 372(5) to have the effect for which the respondent contends.30
[39] I consider the effect of s 372 is to impose reasonably prescriptive consultation obligations, while making it clear that non-compliance with those obligations will not, on its own, render the regulations invalid. For example, if the Minister discovered she
25 Zaoui v Attorney-General (No 2) [2005] 1 NZLR 690 (CA).
26 At [86].
27 At [179] per William Young J.
28 At [101] per Glazebrook J.
29 At [101] per Glazebrook J.
30 I also note Cooke J’s decision in Wairarapa Moana Ki Pouākani Inc v Attorney-General [2023] NZHC 2086 that ouster clauses cannot be interpreted to exclude a court’s jurisdiction in its entirety (citing R (on the application of Privacy International) v Investigatory Powers Tribunal [2019] UKSC 22, [2020] AC 491).
had simply overlooked consulting with an established representative organisation in accordance with s 372(3), that would not render invalid any enforcement action taken before the error came to light. The regulations remain valid until they are set aside by a court of competent jurisdiction despite any failure to comply with s 372. Although this is likely the legal position irrespective of s 372(5),31 it seems to me Parliament wanted to put the matter beyond doubt.
[40] However, I consider s 372(5) is a further legislative indication that the legal controls on the Minister’s regulation-making power confer a wide discretion. A court on review considering whether regulations should be declared invalid due to non-compliance with s 372, must make its assessment in this context. It is important, in this context, that any alleged non-compliance is considered in a substantive and non-technical way.
Are there any additional obligations under the common law or s 27(1) NZBORA?
[41] The next issue is whether the common law or s 27 NZBORA provide additional consultation obligations to those in s 372(5).
[42] I accept the respondent’s submission that common law adds nothing, as the statutory provision is clear and comprehensive, and it is not a situation where it is “insufficient to achieve justice”.32
[43] In respect of s 27(1) NZBORA, the respondent relies on the decision in Brook Valley Community Group.33 It is submitted that there is no “parallel duty to consult” under NZBORA. Brook Valley related to the making of regulations under a provision of the Resource Management Act (“RMA”) that did not require consultation, whereas other regulation-making powers in the same section required consultation. Justice Churchman held that as the regulation-making power was being exercised in
31 See, for example, Diagnostic Medlab Ltd v Auckland District Health Board [2007] 2 NZLR 832 (HC) at [335].
32 Wiseman v Borneman [1971] AC 297 (HL) at 308.
33 Brook Valley Community Group Inc v Trustees of the Brook Waimarama Sanctuary Trust [2017] NZHC 1844.
the context of a high-level policy decision that did not affect individual rights, there was no duty to consult imposed by s 27 NZBORA.34
[44] To the extent that the applicants contend that s 27(1) of NZBORA imposes more extensive duties to consult than s 372, I disagree. Given the prescriptive nature of s 372, it is not readily apparent what these additional obligations might be. I do not accept that if I find there was compliance with s 372, I am nevertheless able to find that there has been a breach of s 27(1) NZBORA due to a consultation failure. This is reinforced by the starting position, referred to above, that there is no general duty to consult when making regulations. In this case, that starting position is altered by comprehensive and clear statutory obligations. It is also reinforced by the wide discretion conferred on the Minister by the statutory context, which involves high-level policy decisions about gambling harm prevention and minimisation.
[45] I consider that s 372 was intended to be a comprehensive description of the Minister’s consultation obligations, with no additional requirements imposed by s 27(1) NZBORA.
Has there been a breach of s 372?
[46] I accept the respondent’s submissions that the consultation process occurred in two stages:
(a)public consultation on the Discussion Document which informed the policy development; and
(b)targeted consultation on draft regulations which was directed at their workability and clarity.
[47] As I understood the applicants’ case, no real challenge was made to the first stage of the consultation process. All four of the applicants participated in that process. The challenge is in essence that there was non-compliance at the second stage due to:
34 At [101]–[107].
(a)The first to third applicants’ involvement in the first stage of the process did not comply with s 372 because they were not provided with sufficient detail of the content of the draft regulations in respect of the cash withdrawal and sweep duties.
(b)Consultation with the fourth applicant as an organisation representative of their interests was not sufficient because the fourth applicant was effectively prevented from acting as a representative body due to the inability to share the draft regulations.
(c)In any event, s 372(4) placed a distinct obligation to consult with the first to third applicants at the second stage of the process as “interested persons”,35 in addition to the requirement to consult with the fourth applicant as a representative organisation.
[48] I accept the respondent’s submission that although specific proposals on cash withdrawals were not outlined in the Discussion Document, ATM withdrawals was an issue that was broadly consulted on, and the applicants in fact provided comments and feedback on harm minimisation options relating to it.
[49] I also accept the respondent’s submission that the Discussion Document specifically sought feedback on the sweep duties, including staff being required to talk to a person who has been gambling for a specified period; venues being required to monitor gambling areas at set intervals to ensure patrons are not displaying signs of harm; and venues being required to record a specified range of harm-related events and signs. The Department received submissions from the applicants on these proposed sweep duties.
[50] At the second stage, the regulations were drafted and provided to 11 representative organisations for comment on their workability and clarity. The respondent considered the fourth applicant to be the appropriate representative organisation for the first to third applicants’ interests in accordance with s 372(3).
35 Gambling Act, s 372(4)(b).
[51] I accept the respondent’s submission that this was not a situation where consultation was required to start again once the proposed regulations were drafted. The draft regulations were rationally connected to the Discussion Document and the harm prevention and minimisation purpose of the legislative power. Although the cash withdrawal duties as drafted in the regulations were not specifically outlined at the first stage, the issue of ATM withdrawals was broadly discussed and considered. The sweep duties were directly discussed and considered.
[52] The fourth applicant was then given the opportunity as a representative body to comment on the workability and clarity of the draft regulations. I do not accept that a failure to provide the first to third applicants with a separate opportunity to make submissions on the draft regulations breached s 372.
[53] Sections 372(3) and 372(4) must be read together. Section 372(3) is expressed in more mandatory language. The Minister “must consult” under it, but it still requires discretionary assessments of the organisations “that appear to the Minister” to be representative of the interests of persons “likely to be substantially affected” (emphasis added).
[54] Section 372(4) confers an even wider discretion on the Minister. It states the Minister “should, to the extent practicable in the circumstances…give a reasonable opportunity for interested persons to make submissions” (emphasis added). There is nothing in this wide discretion to prevent the respondent concluding that, given the practicalities at play, a reasonable opportunity to make submissions by interested parties was through their representative organisations.
[55] So, assuming the applicants are right that s 372(4) was required to be met in addition to s 374(3), I consider it was clearly open to the respondent to decide it was. Any suggestion that the decision was unlawful because the respondent may not have expressly considered whether s 372(4) was met, is a form over substance argument that could not justify the Court’s intervention in this statutory context.
[56] The more difficult question is whether the maintenance of privilege over the draft regulations had the effect of depriving the fourth applicant of its representative
role. No attempt was made to explain why privilege was maintained over the draft regulations.
[57] There was the following email exchange, on 11 January 2023, between a Departmental official and Tony Crosbie, an Executive Committee member of the fourth applicant and Chair of a National Venue Operators Sub-committee,36 in relation to Mr Crosbie’s request for permission to discuss the draft regulations with the Sub-committee:
…
In terms of the draft regulations, you won’t be able to share the documents themselves with them, but you can discuss the content and the Cabinet paper outlining the changes has been proactively released: So we could potentially use that as the basis for discussion? The changes are covered in table 1 on page 5 and appendix A.
Mr Crosbie replied:
Thanks heaps for the reply…
Also heaps [sic] for the guidance on what I can and cannot discuss with group [sic], I’ll use that information.
Once again thanks heaps for putting time aside to come and talk to us it will be so appreciated [by] all.
[58] I doubt that advising Mr Crosbie that he is free to discuss the content of privileged regulations, and proactively releasing a Cabinet Paper that outlines the regulations contents, is consistent with maintaining privilege.
[59] Mr Crosbie’s affidavit evidence is that he did not download the Cabinet Paper despite being directed to it and being told that it had been proactively released. He says:37
I did not download the Cabinet Paper or Regulatory Impact Statement. I did not view the Cabinet Paper or Regulatory Impact Statement. I did not share the Cabinet Paper or Regulatory Impact Statement with other members of the
36 The Sub-committee was created through the fourth applicant and was made up of eight experienced class 4 venue operators from around New Zealand.
37 Affidavit of Tony Crosbie dated 26 October 2023 at [5].
class 4 gaming machine industry. I did not obtain the impression from the email exchange, or the subsequent meeting, that I was free to circulate more broadly the Cabinet paper and/or Regulatory Impact Statement. No one from the DIA said we should do that, in the meeting we had with DIA representatives on 24 January 2023 or at any other time. I did not gain the impression that I was free to use the Cabinet paper as a means of encouraging other members of the industry to make submissions on the draft regulations, or as a means for others to provide the DIA with their own feedback on the draft regulations.
[60] I do not find it easy to reconcile this evidence with the contents of the above email exchange. Mr Crosbie was expressly told that he could discuss the content of the draft regulations with a Sub-committee that contained eight experienced operators of class 4 gaming venues, was directed to the proactively released Cabinet Paper (including where to find the pages outlining the relevant changes) and was told he could potentially use this as a basis for discussion. Mr Crosbie’s reply was to thank the official for letting him know what he could and could not discuss with the group. I infer from Mr Crosbie’s affidavit that he did not share the Cabinet Paper with the Sub-committee or any other class 4 venue operators.
[61] I am in no position to reconcile the apparent disconnect between the affidavit evidence and the email exchange. What is clear is that Mr Crosbie did not share the Cabinet Paper with the first to third applicants. I accept that the maintenance of privilege has caused confusion and complicated the fourth applicant’s ability to fulfil its role as a representative organisation under s 372(3). The end result is that the contents of the draft regulations were not shared with the first to third applicants despite being clearly outlined in the Cabinet Paper that had been proactively released.
[62] The question is whether these matters give rise to non-compliance with s 372 and, if so, whether the non-compliance is such that I should declare the regulations invalid. I do not consider that it does. The process followed provided a fair opportunity to comment in the manner contemplated by the section. I do not accept that the confusion about the ability to share the substance of the draft regulations is sufficient to amount to substantive non-compliance with s 372. Even if I am wrong about that, I consider any non-compliance is insufficient to invalidate the regulations. I reach these conclusions for the following reasons:
(a)The first stage of the consultation process included cash withdrawal and sweep duty issues, albeit in more detail in respect of the latter. The first to third applicants made submissions on these issues.
(b)The more detailed proposals in the draft regulations did not transform the substance of what was being proposed. The proposed regulations were rationally connected to the Discussion Document and the submissions received on it directly informed the contents of the draft regulations.
(c)There was no obligation to provide the draft regulations to the first to third applicants. The fourth applicant’s receipt of the draft regulations meant it had a direct opportunity to make submissions about the cash withdrawal and sweep duties based on its existing understanding and knowledge of the likely impact on its members.
(d)As discussed above, in this statutory context, the respondent had a wide discretion, including deciding what was required to fulfil the consultation obligations under s 372.
Legitimate expectation
[63] I accept the respondent’s submission that the single statement in a public consultation document that “another, more targeted consultation (and “exposure draft”) to provide a further opportunity for feedback” is insufficient to establish a legitimate expectation that the first to third applicants would be directly consulted at the second stage.
[64] There was no representation as to who would be involved in the “more targeted consultation”. The statement lacks the requisite clarity to establish a legitimate expectation.38 It is not a situation where the first to third applicants have been told they will be consulted further, or that there has been an established practice of doing
38 Comptroller of Customs v Terminals (NZ) Ltd [2014] 2 NZLR 137 (CA) at [125].
so. Providing the draft regulations to the fourth applicant is consistent with the statement that there will be “another, more targeted consultation”.
The substantive challenge to the contents of the Regulations
Improper criminalisation of unspecified conduct
[65] I understood the essence of this challenge to be as follows. The Schedule to the regulations setting out the “signs of harm” should contain an exhaustive definition. In other words, it should say “signs of harm mean” rather than “signs of harm include (without limitation)”.
[66] The applicants rely on Professor Joseph’s commentary that a power to regulate may not authorise regulations that delegate an open-ended discretion.39 Reliance is also placed on the statement in Campbell v McDonald, where a regulation was held to be invalid for conferring an uncontrolled discretion whether or not to issue a licence for trout, that:40
The effect is to leave it to the discretion or caprice of an irresponsible person to say who may and who may not exercise a public right.
[67] It will always be a matter of degree whether a regulation creating criminal liability is sufficiently uncontrolled to be invalid. The applicants have focused on one aspect of the legislative scheme that creates liability. In my view, read as a whole, the scheme creating liability falls short of the level of uncertainty required to invalidate them.
[68] The infringement offences in question are described in the Schedule to the Gambling (Infringement Offences) Amendment Regulations 2023 as follows:
Regulation 15(2)
Failure of venue manager to ensure that venue personnel have conversations with players who have exhibited 1 or more signs of harm
39 Philip Joseph Joseph on Constitutional and Administrative Law (5th ed, Thomson Reuters, Wellington, 2021) at [26.5.16].
40 Campbell v McDonald (1903) 22 NZLR 65 (CA) at 70.
Regulation 16(3)
Failure of venue manager to ensure that venue personnel record required information in relation to identified signs of harm
[69] These infringements offences do not result in a criminal conviction.41 I accept, however, that liability under them will be relevant to a venue manager’s continued ability to hold a licence.42
[70] A regulatory regime that enables the prosecution of a general duty informed by a non-exhaustive list of statutory criteria is well known in the health and safety context. For example, s 36 of the Health and Safety at Work Act 2015, relevantly provides:
36 Primary duty of care
(1)A PCBU must ensure, so far as is reasonably practicable, the health and safety of—
(a)workers who work for the PCBU, while the workers are at work in the business or undertaking; and
(b)workers whose activities in carrying out work are influenced or directed by the PCBU, while the workers are carrying out the work.
(2)A PCBU must ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking.
(3)Without limiting subsection (1) or (2), a PCBU must ensure, so far as is reasonably practicable,—
(a)the provision and maintenance of a work environment that is without risks to health and safety; and
(b)the provision and maintenance of safe plant and structures; and
(c)the provision and maintenance of safe systems of work; and
(d)the safe use, handling, and storage of plant, substances, and structures; and
41 Infringement offences do not qualify as criminal convictions: Criminal Procedure Act 2011, s 375.
42 Gambling Act, pt 2 subpt 3. I note that there is the possibility of criminal conviction under s 308, a provision that is not in issue in this case. Under that section, venue licence holders must develop a policy for identifying problem gamblers under s 308, and venue managers are liable under the same section for failing to take all reasonable steps to ensure that the policy is used identify problem gamblers. They are liable to criminal conviction and a maximum penalty of $5,000.
(e)the provision of adequate facilities for the welfare at work of workers in carrying out work for the business or undertaking, including ensuring access to those facilities; and
(f)the provision of any information, training, instruction, or supervision that is necessary to protect all persons from risks to their health and safety arising from work carried out as part of the conduct of the business or undertaking; and
(g)that the health of workers and the conditions at the workplace are monitored for the purpose of preventing injury or illness of workers arising from the conduct of the business or undertaking….
[71] Criminal liability is created by a combination of a general primary duty followed by an expressly non-exhaustive list of specific duties that form part of the primary duty.43 This type of liability places the obligation on the duty-holder to assess the risks associated with its workplace and ensure compliance in the circumstances. That the duties need only be complied with “so far as is reasonably practicable”, requires an additional layer of discretionary judgement. Any attempt to provide certainty through an exhaustive list of specific duties would undermine this contextual risk assessment purpose. It would encourage a tabulated approach resulting in obvious steps to ensure safety being overlooked because they fall outside the list.
[72] The fact the prosecutor needs to assess whether the duty has been breached by reference to non-exhaustive criteria, which often includes consideration of non-binding industry guidance, does not mean criminal liability is “at the whim of the prosecutor”. Conviction for a breach of s 36 requires careful investigation of the circumstances of the alleged breach, a charge that particularises the alleged failures,44 and a court being satisfied beyond reasonable doubt that the alleged failings occurred and the duty was breached.
[73] It is readily apparent that liability under the Regulations is based on the same broad approach. They contain duties on venue managers to ensure venue personnel have conversations and record information in relation to signs of harm. There is also
43 Notably, the maximum penalties for breaches of these duties are significant, ranging from fines of up to $500,000 for breaches that do not expose a person to a risk of death or serious injury, to fines of up to $1.5 million for breaches that do expose a person to such risks, and to fines of up to
$3 million or 5 years imprisonment for reckless breaches that expose a person to a risk of death or serious injury: ss 47-49 of the Health and Safety at Work Act 2015.
44 Talley’s Group Ltd v WorkSafe New Zealand [2018] NZCA 587, [2019] 2 NZLR 198.
an overarching duty on the venue manager to “ensure that personnel consider whether any player is exhibiting any signs of harm, including those described in the Schedule”.45 These assessments will necessarily be context specific and require the exercise of judgement informed by the signs of harm in the Schedule, staff training under reg 13, the venue’s policy for identifying problem gamblers under s 308, and the definition of harm in s 4.
[74] I accept the respondent’s submission that an exhaustive list will likely result in clear signs of harm that do not fall within it being ignored. It would encourage a tick-box approach that would discourage the exercise of judgement to identify signs of harm, undermining the harm prevention and minimisation purposes of the Regulations.
[75] I do not accept that providing further guidance about what might constitute a sign of harm in the Department’s guidance documents, or even Department employees generally expressing views about what might amount to a sign of harm, results in the possibility of arbitrary conviction at the whim of the Department’s employees. Whether a sign of harm that is not included in the schedule is sufficient to found liability will ultimately be a matter for a court to determine should the question arise on a prosecution. It will be decided having regard to the alleged failings and the evidence adduced to prove them.
[76] I therefore consider the Regulations are sufficiently clear to found criminal liability.
Workability of the cash withdrawal duties
[77] In a memorandum file post-hearing, at my request, the respondent confirmed its oral submission that a non-observable withdrawal outside the venue would not count as a withdrawal for the purposes of sign of harm for the cash withdrawal duties.46 This is because a person making such a withdrawal would not be a “player” at the time of withdrawal, reg 15(1) is only concerned with ensuring signs of harm are considered
45 Gambling (Harm Prevention and Minimisation) Amendment Regulations 2023, reg 15(1).
46 Schedule, sign of harm (a).
for “players”, and the general legislative context is that there is an observational component to assessing signs of harm.47 I agree with the respondent’s interpretation. This will preclude venue staff from having to consider whether a cash withdrawal before somebody enters the venue counts as a first withdrawal for the purposes of these duties.
[78] The more difficult question is whether a person who withdraws cash in-venue and then begins gambling is a “player” and therefore the cash withdrawal counts as a first cash withdrawal. Sign of harm (e) in the Schedule recognises that “player” may be wider than someone who has started gambling, as it applies to a person “waiting to gamble before the venue opens”. To ensure consistency between these regulations, I accept the respondent’s submission that a player means a person who has started gambling, or whose actions and behaviours demonstrate an intention to start gambling.48 I do not consider the requirement to make such an assessment makes the cash withdrawal duties unworkable. As noted above, the requirement to apply contextual judgement is an important component of fulfilling the legislative purpose.49
[79] The remainder of the challenge to the cash withdrawal duties is criticism of the evidence relied upon by the respondent regarding their likely effectiveness, and criticism that the operational effect of their prescriptive nature is likely to generate a large number of problem gambler ‘false positives’ and prevent staff from having regard to the actual context or evidence of harm.
[80] In relation to the evidential foundation challenge, there is no dispute that there is evidence that supports the respondent’s decision. It is not for the Court to resolve disputes between experts about the weight of that evidence. There is no suggestion, nor could there be, that there is no rational connection between the cash withdrawal duties and the harm prevention and minimisation purposes of the legislation. The respondent is not prevented from acting because there is uncertainty about whether
47 See, for example, regs 9(2), 15(1) and 15(2).
48 I also accept this interpretation would be consistent with sign of harm (c) in the Schedule, namely a person attempting to borrow money to gamble, as it would apply to a person who has not yet started gambling but their behaviour demonstrates and intention to start.
49 See discussion above under the subheading “Improper criminalisation of unspecified conduct”.
that proposed measures will be effective. That is the antithesis of a precautionary approach to significant public harm prevention.
[81] In relation to possible adverse consequences, again it is not for the Court to resolve evidential disputes about these issues. It appears clear that the prescriptive nature of the obligations is to enhance harm prevention through mandated minimum expectations. There is nothing improper about a regulatory regime requiring a combination of compliance with prescribed minimum standards and the exercise of contextual judgement. Deciding on this combination of measures is well within the Minister’s policy discretion. For this allegation to succeed, it would need to be established that the adverse consequences will be so disproportionate that imposing the duties fall outside the respondent’s wide discretion. In other words, that no rational Minister could have imposed them to meet the harm prevention and minimisation purposes of the legislation. The evidence falls well short of this.
Workability of the sweep duties
[82] The applicants’ reliance on the KPMG report falls short of demonstrating that the sweep duties are “unworkable” to the point where no reasonable regulator could have imposed them.
[83] Although the KPMG report is said to be independent, it has been prepared on the instructions of the fourth applicant. The methodology involved KPMG staff trying to simulate a venue working environment. It can be inferred that KPMG staff would not be familiar with nor have experience or training in class 4 venue management and supervision. They would not have knowledge of regular gamblers at the venue in accordance with the existing Gambling Host Responsibility Guidelines.
[84] Moreover, their methodology was only one possible way of implementing the Regulations. For example, there seems to have been limited or no use of technology. The report itself acknowledges that there are a number of variables that can affect the implementation of the duties including venue layouts, sizes, numbers of staff on duty and ATM placement. It also includes a list of options which may increase the workability of the Regulations, including use of security camera technology and
designated staff numbers to monitor, venue-specific data collection tools, and cloud-based recording systems.
[85] I accept the respondent’s submission that the need for existing practices to change, or to hire more staff, or obtain further resources in order to comply with the Regulations does not make them unreasonable. It was anticipated that the Regulations would create extra burdens on venue operators. I consider that far greater evidence of a disproportionate burden on venue operators would be required for the Regulations to be unreasonable in this statutory context.50
Casinos
[86] I accept the respondent’s submission that taking a different approach to casinos does not invalidate the Regulations. As noted in Discussion Document Pokies and Casinos, “casinos are out of the scope because they are dealt with differently under the Act”.
[87] Part 5 of the Act deals with casino gambling. Casino licences are subject to special harm minimisation requirements and minimum standards that are different to class 4 venues, and are subject to special oversight by the Gambling Commission. The Minister requested the Department to consider whether casinos should be covered by the Regulations, but due to the differences the Department considered different approaches needed consideration. Additional policy work and consultation would have been required to ensure the Regulations were effective if casinos were included. The harm prevention efforts in relation to pubs and clubs is an initial step in the Government’s broader gambling harm prevention programme.
[88] I accept the respondent’s submission that it is a policy matter for the Minister to decide the order the Government takes to broader gambling reforms. I consider there is nothing unreasonable or irrational in that approach and certainly nothing that would justify the Court’s intervention.
50 Woolworths New Zealand Ltd v Auckland Council (SC), above n 11, at at [86]-[87].
The Department’s guidance document
[89] To the extent that the guidance document may go beyond the obligations imposed under the Regulations, it is nothing more than what it says, namely guidance. It does not replace the Regulations or have any legal status beyond its purpose of providing “a general guide to support those involved in implementing the 2023 regulations”. Putting to one side whether there is any jurisdiction for me to judicially review guidance, there is simply no basis to do so independently of the challenge to the Regulations dealt with above. In fairness to Mr Smith, I do not believe he pressed the point for the applicants.
Conclusion
[90] The process followed provided for a fair opportunity for the applicants to comment on the Regulations in the manner contemplated by the legislation. There was no legitimate expectation that any greater consultation would occur.
[91] The fact that there is some disagreement among experts, or between the respondent and the members of the applicants, about the most effective means of achieving the legislation’s harm prevention and minimisation purposes, is not a basis to conclude that the Regulations have been made outside that statutory purpose.
[92] The applicants have not established that the Regulations are unreasonable. There is a clear rational connection between the challenged duties and the harm prevention and minimisation purpose of the power being exercised, and the respondent is entitled to take a precautionary approach to the significant public harm caused by problem gambling. In these circumstances, there is no basis for the Court to intervene.
[93] I note that the respondent intends to keep the effectiveness of the Regulations under review, as would be expected of a responsible regulator.51 It appears clear this will include discussion and consultation with the applicants and other similar organisations to ensure the purposes of the legislation are being achieved.
51 Department of Internal Affairs Regulatory Impact Statement: Interim assessment for Reducing Pokies Harm (8 December 2021); and Department of Internal Affairs Regulatory Impact Statement: Regulatory amendments to reduce pokies harm (21 September 2022).
[94]Accordingly, I dismiss the application for judicial review.
[95] My preliminary view is that the respondent is entitled to costs on a 2B basis. If costs cannot be agreed, the parties are to file and serve memoranda not exceeding four pages by 1 February 2024, and reply memoranda not exceeding two pages five working days thereafter.
La Hood J
Solicitors/Counsel:
True Legal, Hamilton
M S Smith, Barrister, Wellington Crown Law Office, Wellington
Appendix – extracts from the Regulations
Problem gambling awareness training: class 4 venues
13 Requirement to provide problem gambling awareness training: class 4 venues
(1)The holder of a class 4 venue licence must, in relation to a class 4 venue at which it conducts gambling, provide problem gambling awareness training to the venue manager, and any other venue personnel who supervise gambling
in the course of their duties at the venue,—
(a)before the venue manager or venue personnel first start supervising gambling in the course of their duties at the venue; and
(b)at least once a year.
(2)As a minimum, the training referred to in subclause (1) must enable the venue manager or venue personnel to whom the training has been provided to—
(a)approach a player that the venue manager or venue personnel have reasonable grounds to believe may be experiencing difficulties
relating to gambling; and
(b)provide information to a player about the characteristics of problem gambling (including recognised signs of problem gambling); and
(c)provide information to a player about the potential dangers of problem gambling; and
(d)provide information to a player about how to access problem gambling services; and
(e)remind a player that the venue manager or a person acting on the manager’s behalf may identify a person who they have reasonable
grounds to believe is a problem gambler and exclude the player from the gambling area of the venue for up to 2 years; and
(f)remind a player that they can identify themselves as a problem
gambler and request that the venue manager or a person acting on the manager’s behalf exclude them from the gambling area of the venue for up to 2 years; and
(g)monitor for signs of harm, including through conducting gambling area sweeps.
(3)As a minimum, the training referred to in subclause (1) must include—
(a)practical and interactive sessions on—
(i)interacting with players to gain familiarity and build rapport with them; and
(ii)initiating conversations with a player who may be experiencing harm; and
(iii)how to interact with a player who is distressed or agitated; and
(iv)how venue personnel can support problem gamblers through the exclusion process, including how to start conversations with players about the exclusion process and how players can access multi-venue exclusion; and
(b)the following information:
(i)information about identifying the signs of harm (including those described in the Schedule):
(ii)basic information about how gaming machines work, including why they can be addictive:
(iii)first-hand accounts (which may be pre-recorded) from people who have experienced or been affected by harm:
(iv)information about the types of harm:
(v)information about local and national problem gambling services and other organisations that can provide support to people affected by harm:
(vi)information about what harm resources are available to support venue managers or venue personnel to help prevent and minimise harm:
(vii)the procedure for self-exclusion and venue-initiated exclusion, including when it is appropriate for the venue manager or a person acting on their behalf to consider excluding an
individual; and
(c)guidance on the following matters:
(i)how to maintain records to ensure that information is retained so that actual or potential problem gamblers can be identified, and obligations under the Privacy Act 2020 can be complied with:
(ii)how to conduct gambling area sweeps.
(4)The holder of a class 4 venue licence must ensure that a person who has received problem gambling awareness training is present at the class 4 venue at all times when gambling activities are available to players.
Gambling area sweeps
14 Gambling area sweeps
(1)The venue manager must ensure that venue personnel conduct a gambling area sweep at least 3 times per hour while the gambling area is operating, with each sweep being at least 10 minutes after the previous sweep.
(2)The venue manager must ensure that venue personnel, when conducting a gambling area sweep, take all reasonable steps to identify whether any player has been gambling during 9 or more consecutive gambling area sweeps.
(3)Despite subclause (1), venue personnel are not required to conduct a
gambling area sweep if the personnel can verify through other means that the gambling area is unoccupied by players.
Venue manager must ensure that venue personnel consider whether player is
exhibiting signs of harm
15 Venue manager must ensure that venue personnel consider whether player is exhibiting signs of harm
(1)The venue manager must ensure that venue personnel consider whether any player is exhibiting any of the signs of harm, including those described in the Schedule.
(2)The venue manager must ensure that venue personnel, after identifying that a player is exhibiting 1 or more of the signs of harm (including any of those described in the Schedule), have a conversation with that player to assist with identifying whether the player is a problem gambler.
Records relating to gambling area sweeps and signs of harm
16 Records relating to gambling area sweeps and signs of harm
(1)The venue manager must maintain records for the purposes of recording the information required by subclauses (2) to (6).
(2)The venue manager must ensure that venue personnel record the following information in relation to a gambling area sweep:
(a)identification of the venue personnel who conducted the gambling area sweep:
(b)the date and time that the venue personnel conducted the gambling area sweep:
(c)how many players were present in the gambling area during the gambling area sweep:
(d)evidence of the steps taken by the venue personnel to monitor and identify whether players have been gambling during consecutive gambling area sweeps:
(e)if a gambling area sweep is not conducted because venue personnel could verify through other means that the gambling area was unoccupied by players,—
(i)the method by which venue personnel verified that the gambling area was unoccupied by players; and
(ii)the date and time that the gambling area sweep was not conducted.
(3)The venue manager must ensure that venue personnel record the following information in relation to each sign of harm identified:
(a)the name of the venue personnel who identified the sign of harm:
(b)the date and time that the venue personnel identified the sign of harm:
(c)information that would help venue personnel to identify a player who displayed the sign of harm (for example, their name, if known, or a general description of their appearance):
(d)which sign of harm was identified:
(e)the name of the venue personnel who talked to the player as required by regulation 15(2):
(f)the date and time that the venue personnel talked to the player:
(g)a summary of the conversation with the player:
(h)any further action taken in respect of the player.
(4)The venue manager must review, or ensure that a person reviews on their behalf, the records for at least the previous 7 days at least once each week to—
(a)assess whether venue personnel have taken appropriate action following the identification of 1 or more signs of harm in a player; and
(b)assess whether further action is required in respect of a player; and
(c)determine whether there are any players who the venue manager, or the person acting on their behalf, has reasonable grounds to believe are problem gamblers.
(5)The venue manager, or the person acting on their behalf, after reviewing the records in accordance with subclause (4), must record—
(a)the date of the review; and
(b)any further action taken as a result of the review.
(6)The venue operator must ensure that information recorded is retained for a period of 3 years after the date on which it was recorded.
Schedule Signs of harm
For the purposes of these regulations, the signs of harm include (without limitation) the following:
(a)withdrawing, or attempting to withdraw, cash from an automatic teller machine or EFTPOS device on 2 or more occasions in 1 day to use for gambling at the venue:
(b)gambling during 9 or more consecutive gambling area sweeps:
(c)attempting to borrow money from venue personnel or other venue customers to use for gambling:
(d)leaving children in a car or otherwise unattended at the venue:
(e)waiting to gamble as soon as the venue opens:
(f)refusing to stop gambling at the venue when the venue is closing, or otherwise appearing unable to stop gambling:
(g)appearing visibly distressed or angry either during or after gambling (for example, crying, holding their head in their hands, or hitting a machine).
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