Pub Charity Incorporatated v Secretary of Internal Affairs
[2015] NZHC 195
•17 February 2015
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2014-485-11181 [2015] NZHC 194
UNDER the Judicature Amendment Act 1972 and
Part 30 of the High Court Rules
IN THE MATTER OF
an application for judicial review
BETWEEN
PUB CHARITY INCORPORATED Applicant
AND
THE SECRETARY OF INTERNAL AFFAIRS
First Respondent
THE GAMBLING COMMISSION Second Respondent
Hearing: 24 and 25 November 2014 Appearances:
M S Smith for the Applicant
K G Stephen and E F Hockly for the First Respondent
S E Kuper for the Second RespondentJudgment:
17 February 2015
JUDGMENT OF MALLON J
Introduction ....................................................................................................................................... [1] The Gambling Act 2003 .................................................................................................................... [6] Pub Charity ..................................................................................................................................... [17] The decisions.................................................................................................................................... [21] The Secretary’s first decision. ....................................................................................................... [21] The Gambling Commission’s first decision .................................................................................. [23] Secretary resets suspension date .................................................................................................. [27] The High Court decision .............................................................................................................. [28] The Court of Appeal’s decision ..................................................................................................... [30] The Gambling Commission’s second decision .............................................................................. [35] The Secretary’s second decision: date reset ................................................................................. [37] Interim relief ................................................................................................................................. [39] Issue 1: basis of withdrawal............................................................................................................ [40] What happened ............................................................................................................................. [40]
Summary ....................................................................................................................................... [59]
PUB CHARITY INCORPORATED v THE SECRETARY OF INTERNAL AFFAIRS [2015] NZHC 194 [17
February 2015]
Conclusion on basis of withdrawal ............................................................................................... [61] Issue 2: power to reset. .................................................................................................................... [62] Issue 3: obliged to reconsider penalty? .......................................................................................... [83] Error of law? ................................................................................................................................ [84] Procedural impropriety/mandatory relevant considerations? ...................................................... [90] Issue 4: where does that leave the formal warning?................................................................... [101] Result .............................................................................................................................................. [106] Costs ............................................................................................................................................... [107]
Introduction
[1] The plaintiff (Pub Charity) has a licence to operate gaming machines (an operator’s licence). The gaming machines are placed in venues (various pubs and clubs) around New Zealand. A legislative requirement that applies to Pub Charity’s operator’s licence is that in any 12 month period its venue costs must not exceed 16 per cent of the combined gaming machine profits from all of its gaming machines. This is referred to as Limit D. This application for judicial review concerns a decision of the First Respondent (the Secretary) to suspend Pub Charity’s operator’s licence for one day for a breach of Limit D.
[2] The issue arises because the date for serving the suspension was reset following considerable procedural background. To summarise that background, Limit D was exceeded by 0.46 per cent in the year ending 31 July 2009. The Secretary’s decision was made on 27 June 2011. It determined that the one day suspension was to be served on 25 July 2011. Pub Charity appealed the Secretary’s decision. The second respondent (the Gambling Commission) dismissed that appeal on 16 March 2012, by which time the date for serving the suspension had expired. It did not nominate a new date for the suspension.
[3] Pub Charity challenged the Gambling Commission’s decision by judicial review proceedings. A decision of the High Court (sitting as a Full Court) allowed Pub Charity’s application for review on 19 December 2012.1 The Secretary appealed that decision. On 10 December 2013 the Court of Appeal allowed the Secretary’s appeal and referred the matter back to the Gambling Commission for
reconsideration, while reinstating the Secretary’s 2011 decision for the purposes of
1 Pub Charity v Gambling Commission [2012] NZHC 3530, [2013] NZAR 249.
that reconsideration.2 Pub Charity advised the Gambling Commission that it was withdrawing the appeal. The Gambling Commission accepted that withdrawal. The Secretary considered that its reinstated decision then stood. It reset the date on which the one day suspension was to be served (as the original date had long since passed).
[4] The issues in this case are as follows:
(a) What was the basis on which Pub Charity withdrew its appeal?
(b)Were the Gambling Commission and the Secretary correct that there was a power to reset the date?
(c) Were the Gambling Commission or the Secretary obliged to reconsider the decision to impose the one day sanction in light of intervening events (namely, because the Secretary had issued a warning in respect of the breach after the High Court decision and before the Court of Appeal decision, and that there were errors in his original decision as found by the Court of Appeal)?
(d) What is the status of the formal warning?
[5] The answers to these questions will determine the grounds of review relied on by Pub Charity.
The Gambling Act 2003
[6] The Gambling Act 2003 (the Act) regulates gambling in New Zealand. Its purposes include authorisation of some gambling, prohibition of the rest, and ensuring that money from gambling benefits the community.3 Gambling is
prohibited and illegal unless it is authorised by the Act and complies with, amongst
2 Secretary for Internal Affairs v Pub Charity [2013] NZCA 627, [2014] NZAR 177.
3 Gambling Act 2003, s 3(c) and (g).
other things, any relevant licence.4 The Act creates offences which include, for example, conducting illegal gambling.5
[7] The Act establishes a number of classes of gambling.6 Class 4 is gambling involving gaming machines or other gambling categorised by the Secretary as class
4 gambling.7 The net proceeds from the gambling must be applied to or distributed
for authorised purposes, commission cannot be paid to or received by a person conducting the gambling, and the gambling must satisfy the relevant game rules.8
Class 4 gambling can only be conducted with a class 4 operator’s licence for the gambling and a class 4 venue licence for the place where the gambling is conducted.9
[8] The Act sets out a procedure for obtaining a class 4 operator’s licence.10
Section 52 of the Act sets out the matters about which the Secretary must be satisfied in order to grant a licence. These include that the applicant will maximise net proceeds from the gambling and minimise operating costs, and net proceeds will be applied to or distributed for authorised purposes.11 The licence may be subject to conditions including any conditions consistent with the Act “that the Secretary considers will promote or ensure compliance” with the Act.12 An operator’s licence has an expiry date. The Act sets out a procedure for renewing a licence before the expiry date.13 An operator’s licence may also be suspended or revoked. It is this power, provided for in s 58 of the Act, that is in issue in this proceeding.
[9] The grounds on which an operator’s licence may be suspended or cancelled
include where the licence-holder “is failing, or has failed, to comply with any relevant requirement of this Act, licence conditions, game rules, and minimum
4 Section 9(1)(a).
5 Section 19(1)(c).
6 Section 20.
7 Section 30(b) and (c).
8 Section 30(a).
9 Section 31(a) and (b).
10 Sections 50 to 53.
11 Section 52(1)(d) and (e).
12 Section 53(2)(g).
13 Section 56.
standards”.14 In deciding whether to suspend or cancel a licence the Secretary must take into account the same matters relevant in considering an application for a grant of an operator’s licence.15 A suspension can be imposed for a period of up to six months.16
[10] The procedure for suspending or cancelling a class 4 operator’s licence is the same as that for refusing to amend or renew it. If the Secretary proposes to make such a decision the operator must be informed of the proposal, the reasons for it, the operator’s rights, and the procedure to be followed.17 The operator also has the opportunity to make written submissions before the decision is made.18 If the Secretary decides to suspend a licence after having considered the submissions, he “must notify” the operator of:19
(a) the date that the suspension takes effect; (b) the suspension period (up to six months); (c) the reason for the suspension;
(d) the matters to be dealt with in order for the Secretary to consider withdrawing the suspension before the end of the suspension period; and
(e) the consequences of not dealing with the matters identified.
[11] The Secretary is empowered to withdraw a suspension before the end of a suspension period if the reasons for it are resolved to his satisfaction.20
[12] The Secretary must also notify the operator of its right of appeal and the process for that appeal.21 An appeal may be made to the Gambling Commission.22
The same powers and procedures apply in respect of other decisions relating to class 4 operator’s licences.23 The Gambling Commission may request any
information from the operator or the Secretary, is not bound to follow a formal
14 Section 58(1)(b).
15 Sections 58(2) and 52.
16 Section 58(1).
17 Section 59(1).
18 Section 59(2).
19 Section 59(4).
20 Section 60(2).
21 Section 59(6).
22 Section 61(1)(e).
23 Section 61(1)(a) to (d).
procedure, does not need to hold a hearing and must consider any information provided by the Secretary or the operator.24 It must give notice of its decision with reasons to the operator and the Secretary. The Gambling Commission may:25
(a) confirm, vary, or reverse the decision of the Secretary; or
(b) refer the matter back to the Secretary with directions to reconsider the decision.
[13] Section 62 provides:
62 Consequences of appeal regarding class 4 operator’s licence
(1) The conditions of a class 4 operator’s licence remain unchanged pending the outcome of an appeal if the appellant appeals an amendment or revocation of a condition or the addition of a new condition under section 61(1)(b).
(2) A class 4 operator’s licence remains in force until—
(a) the expiry of the period for an appeal under section 61(2); or
(b) the outcome of an appeal, if the appellant—
(i) appeals a refusal to renew or amend the licence under section 61(1)(c) or (d); or
(ii) appeals a decision to suspend or cancel the licence under section 61(1)(e).
[14] Section 106 requires an operator to “apply or distribute the net proceeds from class 4 gambling only to or for an authorised purpose specified in the [operator’s] licence.”26 Authorised purposes are defined in the Act and include charitable purposes and non-commercial purposes that are of benefit to the community.27 Failure to comply with this requirement is an offence for which a
fine of up to $10,000 can be imposed.28 The Court can make orders to recover
wrongly applied amounts and the operator’s licence and all its venue licences are cancelled upon conviction.29
24 Section 61(3).
25 Section 61(4).
26 Section 106(1).
27 Section 4(1).
28 Section 106(2).
29 Section 106(3) and (4).
[15] The Act seeks to ensure that holders of class 4 licences maximise net proceeds and minimise operating costs.30 The Act permits the Secretary to set limits on the costs that may be incurred by a class 4 operator.31 Limit D is a control that has been imposed pursuant to this power.32 It was imposed by a New Zealand Gazette notice dated 17 July 2008.33 This Gazette notice replaced a similar control imposed in 2004, the difference being a clarification that the 16 per cent limit is to
be calculated excluding GST.
[16] In addition the Secretary has issued guidelines/practice notes. The 2012 guidelines set out the Secretary’s approach to compliance. They state that his response to non-compliance will differ for those who are wilfully or deliberately non-compliant from those who are genuinely trying to comply. They state that unintentional errors and mistakes are tolerated. They set out a graduated list of responses as follows:
How we might respond
Prosecution, licence suspension or cancellation, fines & pecuniary penalties
Auditing, intelligence, inspections, monitoring, formal warnings, infringement notices & fines
Guidance, information, templates, codes of practice, simplified compliance
& notices
Providing guidance, online services, longer licensing, compliance cooperation agreements & collaborative initiatives
Pub Charity
[17] Pub Charity was established as a charitable trust in 1987. It applied for and received its first gaming licence in the same year. By 2008 it was operating 1,787 gaming machines in 178 venues (pubs and clubs) around New Zealand. Pub Charity’s gross revenue for the year ending 30 September 2008 was over $69
million, from which it made community donations of more than $25 million to a
30 A matter under s 52(1)(d) of which the Secretary must be satisfied when granting or renewing a class 4 licence.
31 Section 116(1).
32 Refer to [1] above.
33 “Limits and Exclusions on Class 4 Venue Costs” (17 July 2008) 114 New Zealand Gazette 3027.
wide range of recipients in the arts, community, social services, conservation, heritage, health, education, rescue services, and sports.
[18] In accordance with the regulatory environment, Pub Charity has at all material times held an operator’s licence and venue licences for each venue in which its gaming machines are placed. It has contractual arrangements with class 4 venue operators for them to host Pub Charity’s gaming machines in the required form and terms.
[19] In the year ending 31 July 2009, Pub Charity’s expenses exceeded Limit D by 0.46 per cent, amounting to an overspend of $286,275. An explanation as to how this arose is provided by Pub Charity in affidavit evidence filed in this proceeding. Pub Charity says that it received late notice of the change to Limit D coming into effect. It says that it was then necessary to notify and/or renegotiate payments to venue operators. This took some time given that it had 178 venue contracts in place. It says that this was complicated by the economic downturn at the time and the associated wildly fluctuating gaming machine revenues. This made accurate forecasting of revenue and appropriate reductions in venue payments almost impossible at this time.
[20] By the end of 2009 matters stabilised. Pub Charity continued to review venue payments and, for the year ending 31 July 2009, was able to claw back the overspend in the previous year. It advised the Secretary on 8 March 2011 of the overspend for the year ending 31 July 2009 and the remedial action it had taken in the year ending 31 July 2010.
The decisions
The Secretary’s first decision.
[21] By letter dated 20 April 2011 the Secretary gave notice that he proposed to
suspend Pub Charity’s operator’s licence for breach of Limit D in the year ending
31 July 2009. He advised that he proposed to impose a two day suspension on the basis of his understanding that this would match the overspend in the year ending
31 July 2009. Following submissions from Pub Charity, the Secretary made a
decision by letter dated 27 June 201134 that a one day suspension would be imposed on Monday 25 July 2011.
[22] The 27 June 2011 letter commented on the way that the length of the suspension was calculated. It said that the Secretary considered it essential that Pub Charity be penalised so as to recover the amount of the overspend. Having considered Pub Charity’s information about that, the Secretary considered that a starting point for a suspension would be between one and two days. The Secretary noted that he had given Pub Charity the opportunity to provide evidence that the overspend had been recovered in which case he would consider withdrawing the suspension in part. While Pub Charity had not provided such evidence in its formal submissions it did provide information about that in a letter sent earlier in the year. Taking into account all the circumstances the Secretary advised that the suspension was to be for one day with “one day having been withdrawn for the recovery efforts” of Pub Charity.
The Gambling Commission’s first decision
[23] Prior to the Gambling Commission’s decision on Pub Charity’s appeal, this Court delivered its decision in another matter, The Trillian Trust v The Secretary for Internal Affairs, which also involved a suspension for non-compliance with Limit D.35 In that decision this Court held that non-compliance with Limit D was not a breach of s 52 because that section did not impose an obligation on the holder of a licence. This Court also considered whether expenditure incurred in breach of
Limit D might be a breach of s 106 of the Act. This Court doubted that it did. It considered that the suspension power under s 58(1)(b) was available in respect of such a breach.
[24] The Gambling Commission had also given its decision in Blue Waters
Community Trust in which it found that the Secretary’s jurisdiction to suspend for
34 Replacing a letter dated 21 June 2011 with which Pub Charity had taken issue.
35 The Trillian Trust v Secretary for Internal Affairs HC Wellington CIV-2010-485-2411, 14
November 2011.
non-compliance with Limit D was under s 58(1)(b) of the Act.36 It also held that
the Secretary’s standard approach to fixing suspension periods was wrong.
[25] The Gambling Commission’s decision on Pub Charity’s appeal was delivered on 16 March 2012.37 Following The Trillian Trust and Blue Waters Community Trust it found that the Secretary had wrongly considered that non- compliance with Limit D was a breach of ss 52(1)(d) and 106 of the Act. It also found that the Secretary was wrong to calculate the suspension period by reference to the number of days it would take for gaming machine profits to equal the amount
of the overspend.
[26] Considering the matter afresh, it held that compliance with Limit D was a requirement of the Act for the purposes of s 58(1)(b) and accordingly was grounds for a suspension. It concluded that a one day suspension was appropriate. It dismissed the appeal. It made no other order even though the date set by the Secretary for serving the suspension had passed.
Secretary resets suspension date
[27] On 4 April 2012 the Secretary advised that he now nominated 16 April 2012 as the day the suspension was to be served. The suspension was not served on that day because Pub Charity applied to the High Court for judicial review.
The High Court decision
[28] A Full Court of the High Court considered Pub Charity’s application for judicial review of the decisions of the Secretary and the Gambling Commission. The Full Court considered that suspension under s 58(1)(b) could only be imposed in respect of an ongoing breach of the Act’s requirements that was capable of remedy. It considered that suspension was not available for a past non-continuing breach as was the case on the facts before it. It therefore held that the suspension was invalid. It set aside both the Secretary’s first decision and the Gambling
Commission’s decision.
36 An appeal by Blue Waters Community Trust Gambling Commission GC01-12, 1 February 2012.
37 An appeal by Pub Charity Inc Gambling Commission GC06/12, 16 March 2012.
[29] Because it had concluded that the suspension was invalidly imposed the Full Court did not need to consider the other grounds of review. These included that the Secretary did not have power under the Act to reset the date the suspension was to be served. It did, however, express agreement with the view of this Court in The Trillian Trust, that a breach of Limit D was not a breach of s 106 of the Act.38
The Court of Appeal’s decision
[30] The Secretary appealed to the Court of Appeal. A preliminary procedural point on the appeal was the status of the Secretary’s first decision following the appeal to the Gambling Commission. The Gambling Commission had not confirmed, varied or reversed the Secretary’s first decision, nor referred it back for reconsideration. Rather it upheld the decision on different grounds and formally dismissed the appeal. Counsel in the Court of Appeal agreed that the appropriate course would have been for the Gambling Commission to have varied the Secretary’s decision or to have sent the matter back to the Secretary for that to be
done.39
[31] On the substantive issues, the Court of Appeal disagreed with the view reached by the Full Court. It held that the power to suspend under s 58(1)(b) could be used as a sanction for past non-compliance with the requirements of the Act.40 It said that suspension “may properly be viewed as a useful part of a graduated approach to enforcement, arising between a warning and cancellation.”41 It said:
[61] That is not to say that every breach of the Act should automatically result in a suspension. The power should only be exercised if the Secretary considers suspension is necessary for the purpose of maintaining the integrity and effectiveness of the licensing system. That will of necessity entail a consideration of the transgressor’s culpability, the importance of the requirement breached, the matters in s 58(2) to the extent they are relevant and issues relating to deterrence and accountability. Of particular importance will be the profile of the licence holder’s past compliance with the Act and its licence conditions.
[62] Insofar as the Commission’s use of the suspension power was intended to hold Pub Charity to account for its breach and thereby encourage more accurate forecasting in order to maintain the effectiveness of the class 4
38 The Trillian Trust v Secretary for Internal Affairs, above n 35, at [18].
39 Secretary for Internal Affairs v Pub Charity, above n 2, at [22].
licensing system, it was clearly in our view a proper exercise of the power within the scope of s 58(1)(b).
[32] Pub Charity contended that the Gambling Commission breached natural justice because it relied on Blue Waters Community Trust in deciding upon a one- day suspension without giving the parties the opportunity to make submissions about that decision. It contended that the cases were not comparable in that the Blue Waters Community Trust was only a two-venue operator. As such it had a greater ability to forecast revenue than Pub Charity as a 178 venue operator. A further difference was that the financial detriment for Blue Waters Community Trust was $10,000 compared with $286,000 for Pub Charity.
[33] The Court of Appeal accepted that a breach of natural justice had occurred. Had the parties been invited to make submissions on Blue Waters Community Trust the Court of Appeal considered that the outcome might have been the same or it might have been different.42 It also accepted a submission from Pub Charity that the Gambling Commission had failed to take into account relevant s 52 matters, and in particular Pub Charity’s past record of compliance with its obligations under the Act.43 For these reasons it considered that the Gambling Commission’s
decision could not stand.44
[34] The Court of Appeal considered the appropriate course was to remit the matter back to the Gambling Commission for fresh consideration of Pub Charity’s appeal and to reinstate the Secretary’s first decision (set aside by the High Court) in order to give the Gambling Commission jurisdiction to hear that appeal.45
The Gambling Commission’s second decision
[35] As discussed in more detail below, Pub Charity advised the Gambling Commission that it was withdrawing its appeal against the Secretary’s decision. This was opposed by the Secretary. The Secretary’s concern arose because there
were doubts about whether he had power under the Act to reset the date of
42 At [75].
43 At [77].
suspension if his first decision was left reinstated and Pub Charity’s appeal was not determined. If there was no power, no suspension would be served because the original suspension date had long since passed.
[36] The Gambling Commission’s second decision was given on 1 August
2014.46 Its decision was to accept “the withdrawal of its appeal by Pub Charity with the result that the appeal is brought to an end.”47 In reaching that decision it considered whether the Secretary had the power to reset the suspension date. It noted that there was no express power in the Act to reset the date. It considered
that s 16(1) of the Interpretation Act 1999 applied, so that the power to set the suspension date could be re-exercised. The Gambling Commission did not express any view on the substantive issues of whether a suspension was an appropriate penalty and, if so, for what period.
The Secretary’s second decision: date reset
[37] On 20 August 2014 Pub Charity wrote to the Secretary seeking confirmation that, in resetting the date for any penalty to be served, the Secretary would also be considering what “if any” penalty was appropriate in accordance with the Court of Appeal’s decision.
[38] By letter dated 22 August 2014 the Secretary informed Pub Charity that, as Pub Charity had withdrawn its appeal, his first decision stood with the only matter to address being the date for the suspension. He advised that he did not accept that Pub Charity’s explanation for the Limit D breach weighed against a suspension. He also considered that a formal warning issued on 7 June 2013 (discussed below) was not a sanction for the Limit D breach. He notified Pub Charity that it was to serve the suspension on 8 September 2014.
Interim relief
[39] Pub Charity then made this application for judicial review. On 4 September
2014 the High Court granted Pub Charity interim relief, ordering that the
46 An appeal by Pub Charity Inc Gambling Commission GC09/14, 1 August 2014.
suspension was not to take effect until the determination of the judicial review application.48
Issue 1: basis of withdrawal
What happened
[40] The background to Pub Charity withdrawing its appeal is a warning given to it by the Secretary after the appeal to the Court of Appeal was filed and the case on appeal was lodged. The warning was first given orally at a meeting on 23 May
2013. There is no file note of the meeting. Pub Charity relies on a letter dated 24
January 2014 to the Gambling Commission which records:
The formal warning of Pub Charity for breaching Limit D in 2008/2009 was issued by the Secretary himself to Pub Charity Chairman Mr Hayes and myself in a meeting on the 23rd of May 2013 at his office.
Despite my comment that the matter was before the Courts Mr MacDonald insisted that the formal warning was issued ‘putting a line under the matter and moving on’.
[41] On 7 June 2013, Mr Hewett, a Team Leader (Licensing Compliance), wrote to Pub Charity in these terms:
1.The purpose of this letter is to notify you of my decision to issue a formal warning to Pub Charity (PC) for three areas of non- compliance against the Gambling Act 2003 (Act) as detailed below, including:
…
ii. A breach of Limit D, of the ‘Limits and Exclusions on Class
4 Venue Costs Notice 17 July 2008’ published in the New
Zealand Gazette (Gazette Notice) by an overspend of
$286,275 in the period 1 August 2008 to 31 July 2009;
…
2.I hold a warrant of appointment as a Gambling Inspector issued to me by the Secretary for Internal Affairs (Secretary) under section
331 of the Act.
…
4.The Department of Internal Affairs (Department), in regulating gambling activity in New Zealand, has a graduated approach to
48 Pub Charity Incorporated v Secretary for Internal Affairs [2014] NZHC 2146.
enforcement. As part of this approach, Gambling Inspectors are able to issue formal warnings, rather than proceed with prosecution action …
…
16.As PC has breached Limit D of the Gazette Notice, I consider that there has been a breach of section 106(1) of the Act, as that breach resulted in net proceeds not being applied or distributed for authorised purposes. Given that context, a formal warning for this breach is issued to PC.
…
23.This letter is a formal warning for the three areas of non-compliance with the Act as outlined above; society costs that are not necessary; a breach of Limit D, and a Sevens Tournament grant outside PC’s authorised purposes statement.
[42] A second letter that same day was also sent to Pub Charity from
Mr Quivooy, a General Manager (Regulatory Services). This letter said:
2. This letter follows your recent meeting with Colin MacDonald, Paul
James and Maarten Quivooy held on 23 May 2013.
…
4. We intend to renew PC’s licence and grant a licence for PC Limited.
Both licences will be issued with special conditions attached in order to maintain the status quo, and ensure transparency, with regard to
the issues currently before the High Court relating to the accounting
treatment of gambling assets.
5. The Department is issuing PC with an official warning (dated 7 June
2013), outlined below and attached to this letter, to address three areas of non-compliance. We expect PC to consider these findings
and look forward to PC’s active compliance in future. Once we have
received PC’s response to the warning letter we will finalise our decisions on PC and PC Limited’s licenses.
…
Warning
16.The Department is issuing PC with an official warning to address three areas of non-compliance identified by the Department including:
i. Costs incurred by PC of $52,502 for the relocation of a gaming room, and construction of walls at four further venues that were not necessary, in breach of section 106 of the Act;
ii. A breach of Limit D, of the ‘Limits and Exclusions on Class
4 Venue Costs Notice 17 July 2008’ published in the New
Zealand Gazette (Gazette Notice) by an overspend of
$286,275 in the period 1 August 2008 to 31 July 2009; and
iii. A grant for $220,000 to the Queenstown National Sevens Tournament, not being a charitable purpose as required by PC’s authorised purposes, in breach of section 106 of the Act.
17.The two matters currently before the High Court relating to the Gazette Notice and the accounting treatment of gambling assets will run their course. The Department will assess its position when the outcomes of those proceedings are known.
18.I note that the Department is currently appealing the findings of the High Court in Pub Charity v The Gambling Commission and the Secretary for Internal Affairs, CIV-2012-485-808 to the Court of Appeal. If the Department is successful, the suspension may apply (as well as the warning), or the Court may refer the matter back to the Gambling Commission.
19.We have given PC the opportunity to respond to the warning in writing. We expect PC to consider these findings and look forward to PC’s active compliance in future. We will make final decisions on PC and PC Limited’s licences once we receive a response to the warning letter.
[43] Pub Charities responded to Mr Hewett’s letter by letter dated 8 July 2013. It referred to the High Court decision and that the matter was now before the Court of Appeal and said that “[a]s this matter remains sub judice it is our submissions that no action is available to the Department on this matter at this time.” Mr Hewett responded on 1 August 2013 as follows:
3. The formal warnings were issued for the following three breaches:
i. Costs incurred by PC of $52,502 for the relocation of a gaming room, and construction of walls at four further venues that were not necessary or reasonable, in breach of section 106 of the Act (society costs);
ii. A breach of Limit D (breach of Limit D), of the ‘Limits and Exclusions on Class 4 Venue Costs Notice 17 July 2008’ published in the New Zealand Gazette, by an overspend of
$286,275 in the period 1 August 2008 to 31 July 2009; and
iii. A grant for $220,000 to the Queenstown National Sevens Tournament (Sevens Tournament grant), not being a charitable purpose as required by PC’s authorised purposes, in breach of section 106 of the Act.
4.The formal warnings were issued on 7 June 2013, and were not proposals.
…
6.Thank you for your comments in relation to the breach of Limit D. I have read and considered the points you have raised. Your comments will be kept on file with the warning.
[44] After the Court of Appeal decision was released Pub Charity wrote to the Gambling Commission by letter dated 13 December 2013, referring to the outcome in the Court of Appeal and stating:
Subsequent to the commencement of the above Court action the Secretary
revisited the issue of Pub Charity’s alleged breach of Limit D for the period
1 August 2008 to 31 July 2009, and in a letter dated 7 June 2013 (para 16)
advised Pub Charity that they had issued a formal warning for that breach.
In light of the Secretary’s decision of 7 June 2013 Pub Charity wishes to
withdraw its appeal to the Gambling Commission.
[45] An in-house lawyer with the Department of Internal Affairs responded to the Gambling Commission by an email dated 18 December 2013 which was copied to Pub Charity’s lawyers. The advice was:
Pub Charity remains the appellant, so the Secretary’s view is that Pub
Charity may choose to withdraw the appeal if it wishes.
Suspension and formal warning
In terms of the appropriateness of the appeal being withdrawn, it appears that
Pub Charity has withdrawn its appeal based on a mistake of fact.
…
The formal warning was issued to Pub Charity by Gambling Inspector Jason Hewett. In that warning Mr Hewett noted that Pub Charity had reported it had breached Limit D. As a result, Mr Hewett concluded that, because of the breach, Pub Charity had contravened section 106(1) of the Gambling Act, which is an offence punishable by a fine of up to $10,000, and carries a mandatory consequence on conviction of cancellation of class 4 operator’s and venue licences, without right of appeal. Rather than prosecute Pub Charity for this contravention, the Department elected to issue a formal warning, as outlined in the introduction to Mr Hewett’s warning letter (at paragraph 7).
The formal warning, as an alternative to prosecution, was not a reconsideration of or an amendment to the Secretary’s previous decision to suspend Pub Charity’s licence for the breach of Limit D. This was made clear in Mr Quivooy’s letter at paragraph 18. The formal warning was the
action of a Gambling Inspector in response to detection of an offence against the Act, and had no impact on the suspension decision by the Secretary.
Secretary’s position
As such, the Secretary considers that his decision to suspend Pub Charity’s operator’s licence still stands, subject to the appeal in the Gambling Commission. Therefore, it is the Secretary’s view that, though it is open to Pub Charity to withdraw its appeal, it would be advisable for Pub Charity to reconsider this given the above points.
[46] In a letter dated 7 January 2014 to the Executive Director of the Gambling Commission Pub Charity noted the view that the appeal was being withdrawn based on a mistake of fact and said:
The other matters raised with you by Mr Appleton appear to be more directed at Pub Charity, including the claim that ‘Pub Charity has withdrawn its appeal based on a mistake of fact.’
If the Secretary chooses to direct those claims to Pub Charity they will be rigorously disputed however as to Pub Charity’s view that the Appeal in question can be withdrawn it appears that on this rare occasion both the Secretary and Pub Charity are in agreement.
[47] On 22 January 2014 the in-house lawyer with the Department of Internal Affairs emailed the lawyer for the Gambling Commission stating that the Secretary no longer supported the withdrawal given the consequences of a withdrawal.
[48] On 24 January 2014 the Gambling Commission sought submissions on whether Pub Charity could withdraw its appeal. It asked the parties to address a number of matters including whether the position was altered if a withdrawal meant that the original decision would not be effective or if the parties disagreed on the consequences of the withdrawal.
[49] Pub Charity responded by letter to the Gambling Commission that same day. It did not address the issues relating to the consequences of the appeal. It set out its position as follows:
As previously stated it is Pub Charity’s position that the Gambling Commission jurisdiction in this matter ended with notification of the withdrawal of the appeal on 13 December 2013.
…
It is inconceivable that an appeal process can proceed without an Appellant.
…
The formal warning of Pub Charity for breaching Limit D in 2008/2009 was issued by the Secretary himself to Pub Charity Chairman Mr Hayes and myself in a meeting on the 23rd of May 2013 at his office.
Despite my comment that the matter was before the Courts Mr MacDonald insisted that the formal warning was issues ‘putting a line under the matter and moving on’.
The same argument was put to national Licensing Manager Jason Hewitt (sic) by Mr Hayes in an exchange of correspondence that followed our meeting with the Secretary but was also ignored. On the 1st of August 2013
Mr Hewitt confirmed that, while Mr Hayes’ comments would be placed on
the file, the formal warning for the breach of Limit D was confirmed.
Should the Department continue to dispute the impact of the imposition of that formal warning we are left with little choice but to yet again seek judicial relief from what is another failure of due process.
[50] The Secretary responded by way of memorandum to the Gambling Commission dated 10 February 2014. This memorandum addressed the issues raised by the Gambling Commission. The Secretary submitted that he had no explicit authority to amend the date on which a suspension was to be served. Rather the Act anticipated that any variation would be available only via the appeal considered by the Gambling Commission.49 He considered that the Court of Appeal could have directed him to set new dates but that no such direction was given. The Secretary submitted that, because “there is no longer an effective sanction as there is no ability for the Secretary to amend the suspension period”,
the right to withdraw the appeal was not unfettered. He submitted that leave to withdraw the appeal was required and that it should not be granted.
[51] The Secretary also submitted that the formal warning did not and was not intended to replace the suspension decision. He said that “the formal warning … was a response to the breach of s 106 of the Act rather than the breach of Limit D of the 2008 Gazette Notice.” He said that Pub Charity accepted that it had breached Limit D. He said that Pub Charity was notified that the formal warning would have no impact on these proceedings.
[52] The Gambling Commission met on 14 February 2014 to consider the position. By letter dated 21 February 2014 it advised:
The Commission has decided that it should proceed in the meantime to rehear the appeal as ordered by the Court of Appeal, leaving the issue of the status of the appeal as a matter to be determined at the rehearing. If Pub Charity wishes to argue that it has an unqualified right to withdraw the appeal in the circumstances or that leave should be granted for it to so do and that, as a consequence, the Commission should not render a decision on the rehearing of the appeal, it may do so in its submissions on the rehearing. On the rehearing, the Commission will consider both the status of the appeal and the substantive issues raised by appeal. Parties should therefore file evidence and submissions on all issues as they see fit.
[53] It set out a timetable for the filing of submissions and evidence.
[54] Pub Charity did not file submissions or evidence. Instead, by letter dated 25
February 2014, it responded as follows:
We remain of the view that Pub Charity’s appeal to the Gambling Commission of 7 July 2011 was ours of right to lodge and ours of right to withdraw, which we have done.
Neither the Commission nor the Secretary’s representative has in the subsequent correspondence offered any argument, legal or otherwise, that has in any way altered that view.
The Commission’s offer for Pub Charity to somehow reinstate its appeal is politely declined.
[55] The Secretary filed submissions and evidence. The evidence addressed the Secretary’s view as to the matters relevant to the suspension period. Amongst other things, he asserted that Pub Charity did not have an unblemished record of compliance.50 The affidavit referred to the Secretary’s concern that Pub Charity had over $10 million in undistributed net proceeds at the time of the present issue. He also referred to Pub Charity’s provision of grants to the Queenstown Rugby
Sevens tournament, allegedly contrary to Pub Charity’s authorised purposes and in alleged breach of s 106 of the Act in relation to renovations at the White Swan Tavern (said not to be actual, reasonable and necessary).
[56] The submissions for the Secretary also addressed matters relevant to the suspension period. In relation to Pub Charity’s record, the Secretary noted his concerns as set out in the affidavit and that these concerns existed “at the time of [the] decision to suspend as well as in more recent years”. He noted that the undistributed net proceeds issue did not result in formal action. He noted that although the other two matters:
… resulted in the Secretary issuing [Pub Charity] with a formal warning it does not detract from the seriousness of the breach of Limit D. The formal warning was not intended to nor did it replace the decision to suspend [Pub Charity’s] Licence.
[57] The submissions also addressed differences with Blue Waters Community Trust. The Secretary submitted that a suspension period of two days was appropriate. He submitted that as “the Secretary is unable to set a new date for serving the suspension” the Gambling Commission should determine the date on which the suspension was to be served.
[58] In the event the Gambling Commission did not consider the substantive issues on Pub Charity’s appeal following the Court of Appeal decision. As set out above, it concluded instead that Pub Charity was correct that it could withdraw the appeal. It also considered that the Secretary could rely on s 16 of the Interpretation Act to reset the suspension date. The Secretary subsequently did so.51
Summary
[59] In summary, Pub Charity advised the Gambling Commission that it was withdrawing the appeal because the Secretary had issued a formal warning. The Secretary’s view was that Pub Charity was wrong about the effect of the formal warning, and considered that Pub Charity should not be permitted to withdraw the appeal because the Secretary would not have power to reset the date. The Gambling Commission sought submissions on whether the parties’ positions would be different if they disagreed on the consequences of a withdrawal. It also advised that it would reconsider the substantive issues raised by the appeal as well as the
status of the appeal.
51 Refer to [37] and [38] above.
[60] The Secretary took the opportunity provided to make submissions on both aspects (still being of the view that he had no power to reset the date). Pub Charity did not take that opportunity and reasserted that it could and had withdrawn the appeal. Without reference back to the parties the Gambling Commission did not determine the substantive merits of the appeal, expressed the view that s 16 of the Interpretation Act provided the Secretary with the power to reset the date, and
accepted that the appeal was withdrawn.52
Conclusion on basis of withdrawal
[61] There is no issue that Pub Charity could elect to withdraw its appeal and did so. Pub Charity’s withdrawal was not a contingent one. It might have been arguable that when it first advised it was withdrawing the appeal, it was doing so only on the basis that the matter was at an end because of the formal warning. But it was aware that the Secretary had a different view about the relevance of that warning. It was also aware that the Gambling Commission was considering the consequences of a withdrawal in respect of the original decision and that it was proposing to consider the substantive issues. It nevertheless chose not to respond on these matters and insisted that its appeal was withdrawn. The withdrawal was therefore not a contingent one.
Issue 2: power to reset
[62] Section 16 of the Interpretation Act provides:
16 Exercise of powers and duties more than once
(1) A power conferred by an enactment may be exercised from time to time. (2) A duty or function imposed by an enactment may be performed from
time to time.
52 Pub Charity considers that the Gambling Commission breached natural justice in determining the appeal on the basis that, contrary to the Secretary’s position, s 16 provided him with a power to reset the date. Pub Charity also says that the Gambling Commission further breached natural justice in not considering the substantive merits of the one day suspension in light of the Court of Appeal decision as it indicated it would. It says that, had this been foreshadowed, it would have made submissions. However it considers that any breach of natural justice is now irrelevant because the correctness of the Gambling Commission’s view is now before this Court. It says that the questions are whether the Secretary had the power to reset the date pursuant to s
16 of the Interpretation Act and, if he did, whether he could do so without reconsidering the appropriate penalty in light of the formal warning and the Court of Appeal’s judgment.
[63] Section 4 of the Interpretation Act provides that s 16 applies to any enactment unless “the enactment provides otherwise” or “the context of the enactment requires a different interpretation.”
[64] As set out above,53 the Gambling Act expressly provides that the Secretary may suspend a licence and that he is to notify the operator of the date a suspension is to take effect.54 It also expressly empowers the Secretary to withdraw a suspension before the end of the suspension period.55 There is, however, no express power vested in the Secretary to reset a suspension date or, more generally, to reconsider any decision. This contrasts with the Gambling Commission which is empowered to “reconsider any matter that has been determined by it and issue a fresh determination”.56
[65] As also set out above,57 a decision to suspend a licence may be appealed to the Gambling Commission.58 An appeal operates as a stay of the decision pending the outcome of the appeal.59 Although an appeal must be brought within 15 working days after the date the Secretary’s decision is notified,60 there is no timeframe by which the Gambling Commission’s decision on the appeal must be
given. The legislative scheme therefore contemplates that a suspension date set by the Secretary may have passed by the time the appeal is determined. The suspension date can in those circumstances be reset because the Gambling Commission is empowered to vary the decision of the Secretary or to refer the matter back to him with a direction to reconsider the date of the suspension.61 The legislative scheme therefore contemplates that a suspension date can be reset and provides a mechanism through which that can be done.
[66] Up until the Gambling Commission’s second decision, the parties were of the view that the Secretary did not have the power to reset the suspension date
53 Refer to [10] above.
54 Gambling Act 2003, s 59(4).
55 Section 60(2).
56 Section 226(3)(a).
57 Refer to [12] above.
58 Gambling Act 2003, s 61(1)(e).
59 Section 62(2).
60 Section 61(2)(a).
61 Section 61(4).
except via that mechanism. That mechanism was potentially available but was not utilised because the Gambling Commission had only dismissed the appeal without making any orders in relation to the suspension date. Of its own initiative the Gambling Commission expressed the view that s 16 of the Interpretation Act could be relied upon.
[67] The Gambling Commission’s view was as follows:
(a) While the absence of an express power vested in the Secretary to reconsider determinations (in contrast to the Gambling Commission) might indicate a legislative intention that the Secretary should not have that power, the omission is explained by the appeal provisions.
(b)There is nothing in the Act which prohibits resetting the date in appropriate circumstances.
(c) Once the Secretary has made a decision to suspend a licence, he is not functus officio in the absence of an appeal. The Secretary is empowered to withdraw a suspension62 and may cancel a licence at the end of a suspension period if the reasons for the suspension are not resolved to his satisfaction.63
(d)On common law principles a decision cannot be altered once it is perfected, except in exceptional circumstances and subject to the Interpretation Act.64
(e) In Zaoui v Attorney-General it was held that, while there was no ability under s 16 of the Interpretation Act to vary the decision to detain, the place of detention could be amended.65 An analogy could be drawn in the present case between the decision to suspend (detain)
and the date of suspension (the place of detention).
62 Section 60(2).
63 Section 60(3).
64 Goulding v Chief Executive, Ministry of Fisheries [2004] 3 NZLR 173 (CA).
65 Zaoui v Attorney-General [2005] 1 NZLR 577 (SC and CA).
(f) The circumstances strongly favour the ability to re-exercise the power in order to notify a new suspension date, the Act does not provide otherwise, and the context does not require a different interpretation. Otherwise an appellant could simply withdraw an appeal before it is determined and after the date set for the suspension has passed and thereby avoid penalty. Conversely, re-exercising the power to set the date would allow the status quo prior to the withdrawal of the appeal to be restored.
[68] Pub Charity submits that this analysis was incorrect. The relevant ground of review is that the Gambling Commission, and by implication the Secretary, made an error of law in relying on s 16 to reset the suspension date. It says that the text and scheme of the Act tell against the application of s 16. It says that Parliament has turned its mind to when the Secretary might amend a suspension and has only provided the power to do so by way of withdrawal if the reasons for
the suspension are resolved to the Secretary’s satisfaction.66 Parliament has also
turned its mind to who can reconsider a decision (that is, the Gambling Commission67) and it has provided an appeal process through which the Secretary’s decision can be varied.
[69] Pub Charity submits that its position is supported by the common law principle affirmed in Goulding v Chief Executive, Ministry of Fisheries.68 That is, that the strong starting point is that an administrative decision-maker like the Secretary is functus officio after he has notified his decision to affected parties. In that case an application for a marine farming permit was made to the Minister of Fisheries. The Minister granted the application but, before communicating that
decision to the applicant, learned of information that caused a new assessment and a decision to decline the application. The Court of Appeal considered that s 25(g)
of the Acts Interpretation Act 1924 (now s 16 of the Interpretation Act) does:69
66 Gambling Act 2003, s 60(3).
67 Section 226(3)(a).
68 Goulding v Chief Executive, Ministry of Fisheries, above n 64.
69 At [47].
… not give power to reverse a previous decision made in the exercise of the power which affects legal rights within which we would include the benefits obtained on the issue of a marine permit.
[70] However, as the decision had not been “perfected” by communicating the outcome to the applicant in a manner which indicated finality, it was held that the decision could be revoked and a fresh decision substituted in its place.
[71] This common law principle has limits, as illustrated in Zaoui v Attorney- General.70 In that case, Mr Zaoui, a refugee, was subject to a security risk certificate issued by the Director of Security. He was detained in Auckland Central Remand prison pursuant to a warrant of commitment issued by the District Court under s 114O of the Immigration Act 1987. Due to proceedings challenging the certificate and a number of other related proceedings, Mr Zaoui remained in prison for over two years. He sought bail or alternatively that his place of detention be
varied to the Mangere Refugee Resettlement Centre. An issue arose as to whether there was power under the Immigration Act to detain Mr Zaoui other than at a penal institution. The Supreme Court held that there was. It went on to consider whether the power, having already been exercised, could be re-exercised again (so as to vary the place of detention). Without elaboration the Supreme Court said that:71
We have no doubt that it may be. By its very nature this is the kind of power that may be exercised from time to time, in response to changing circumstances.72 … We emphasise the need for the Judge to make a careful assessment of whether the proposed premises are fit for purpose.
[72] McGrath J in the Court of Appeal provided more comment as to why the power could be re-exercised. 73 His Honour referred to s 16 and noted that it had limited effect in situations where a power, duty or function creates vested rights. He then referred to an extract from Wade & Forsyth which discusses the equivalent provision to s16 in the United Kingdom.74 The authors note that the where a power
is one affecting legal rights, then in the interests of finality, the courts are strongly
70 Zaoui v Attorney-General, above n 65.
71 At [96] and [99].
72 Interpretation Act 1999, s 16.
73 Zaoui v Attorney-General, above n 65, at [51] to [55]. The other Court of Appeal judges did not discuss this.
74 HWR Wade and CF Forsyth Administrative Law (8th ed, Oxford University Press, Oxford, 2000)
at 235, discussing the Interpretation Act 1978 (UK), s 12.
inclined to hold that a decision is irrevocable once validly made. The authors go on to comment that there is a distinction between powers of a continuing character and powers which, once exercised, are finally expended in the particular case.
[73] McGrath J then said:
[53] In Goulding v Chief Executive of the Ministry of Fisheries [2004] 3
NZLR 173, this Court said of the comparable power in s 13 to correct errors that it could not be exercised simply because the decision maker had
changed his or her mind. Similarly, s 16 is unlikely to authorise exercising a
power of this nature afresh in the absence of some material change in circumstances.
[54] The order for detention pursuant to a warrant of commitment does not in my view create rights to which an important interest in finality attaches. The decision as to place of detention is an administrative one legitimately the subject of revision if circumstances change. That is also consistent with the apparent intention of Parliament to create a discretion as to place of detention rather than a conditional release regime in Part 4A. I conclude that to this limited extent the District Court has the power to vary the warrant.
[55] If presented with the alternatives of prison and some other place for detention under Part 4A’s provisions, the District Court would exercise its discretion having regard to the nature of the available facilities. ...
[74] Pub Charity submits that Zaoui was different to the situation which arose here for two reasons. First, in Zaoui there was to be a fresh reconsideration of the alternative places of detention whereas here the Gambling Commission was proposing no reconsideration of the merits of the previous penalty decision. Secondly, there was no prejudice to Mr Zaoui in the reconsideration of the detention decision (which concerned whether he should be detained in a less restrictive environment).
[75] However it can be seen from the discussion in Zaoui, which I have set out above, that the scope of s 16 is not determined by those distinctions. The question is whether the power creates rights to which an important interest in finality attaches, or whether it is administrative and may be revised if circumstances change. A decision as to the date at which a suspension is to be served seems to me to be of the latter kind. A changed circumstance necessitating a revision arises where an appeal is lodged and the date for the suspension passes before the appeal
is disposed of. The Secretary would need to re-determine an appropriate date and consider any matters relevant to that question.
[76] I am reinforced in this view by additional discussion on the subject in Wade
& Forsyth. After the comments referred to by McGrath J in Zaoui the authors go on to say that there is a further class of case “where there is a power to decide questions affecting private rights but where there is also an inherent power to vary an order or power to entertain fresh proceedings and make a different decision.”75
Pub Charity’s licence for the Limit D breach.
92 Theoretically, that could still be done even now. I am told that the parties have engaged in a mediation process to improve their relationship going forward.
93 Gambling Act 2003, s 60(3).
[103] The distinction the Secretary seeks to make in this respect is unclear to me. What is clear is that the formal warning was given for the same breach as that for which the suspension was imposed. When that formal warning was given Pub Charity was told that the breach of Limit D was a breach of s 106 of the Act. The formal warning was said to be issued instead of proceeding with prosecution and
because of the graduated approach taken to enforcement.94 When Pub Charity
responded that the matter was sub judice because of the court proceedings, the Department responded that the formal warning was not a proposal and had already been issued.95
[104] The formal warning was given in June 2013. This was after this Court’s decision in The Trillian Trust and after the Full Court’s decision on Pub Charity’s judicial review application. Those decisions expressed the view that a breach of Limit D was not a breach of s 106. That was common ground before the Court of
Appeal.96 The Court of Appeal said that a suspension “may properly be viewed as
a useful part of a graduated approach to enforcement, arising between a warning and cancellation.”97 Despite this, the Secretary has continued to maintain that there is a distinction between the suspension decision for the Limit D breach and the formal warning.98
[105] The result is that Pub Charity has received both a formal warning and a suspension for the same breach. The formal warning ought not to have been given if the Secretary continued to regard a suspension as the appropriate penalty. It was issued on an erroneous basis. It would be appropriate for the Secretary to remove the formal warning from the file.
Result
[106] The application for judicial review is dismissed. One option would be to refer the matter back to the Secretary to reset the suspension date. However
counsel proposed that I set the day instead. It was proposed that a Monday would
94 Refer to [41] above.
95 Refer to [43] above.
96 Secretary for Internal Affairs v Pub Charity, above n 2, at [23].
97 At [60].
98 Refer to [56] above.
be an appropriate date for the suspension, that being a day when gambling on gaming machines at pubs and clubs tends to be lighter. It was proposed that it be the first Monday following the release of my decision. However it seems fair to Pub Charity to allow a little more time to consider this decision and put in place whatever arrangements it needs to make in respect of the suspension. I therefore order that the date for the suspension is to be Monday 30 March 2015 subject to any different agreement reached by Pub Charity and the Secretary before then. The interim order remains in place until then and is again subject to any different agreement reached by Pub Charity and the Secretary before then.
Costs
[107] The Secretary sought indemnity costs. Pub Charity submits that costs should lie where they fall.
[108] The Secretary regarded Pub Charity’s actions as an abuse of process and this present judicial review application as meritless in light of its earlier stance to withdraw its appeal. Pub Charity does seem to have sought to take advantage of what was then the parties’ understanding that the date for the suspension could not be reset.
[109] On the other hand, the Secretary’s position could be regarded as somewhat inflammatory by Pub Charity. Limit D was breached by a relatively small margin. The breach occurred at a time when, for the reasons Pub Charity explained, forecasting was difficult. It voluntarily disclosed the breach and it voluntarily took action to redress the situation. The Secretary was unsympathetic to this for reasons which I have not seen detailed. When Pub Charity successfully challenged the decision it was told that a formal warning would be given for “putting a line under
the matter and moving on”99 and that if the Secretary was successful in the Court of
Appeal “the suspension may apply (as well as the warning)”. After the Court of Appeal decision, the Secretary, through his Department, continued to regard the warning as separate from the suspension even though it had been issued for the
same breach of Limit D and on the basis that it also breached s 106 when it did not.
99 The Secretary has not filed evidence disputing this.
After the Court of Appeal decision, rather than taking into account that the formal warning had been given, the Secretary sought an increased period of suspension.
[110] In all the circumstances I do not regard the case as one where indemnity costs are appropriately ordered. Nor do I regard it as a case where costs should lie where they fall. The parties are agreed that the appropriate costs category is 2B in that event. The Secretary is the successful party. I consider that he should have costs in his favour. Counsel for the Gambling Commission did not have instructions on costs. If there is any remaining issue about costs brief memoranda may be filed within 28 days.
Mallon J
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