Pub Charity v Department of Internal Affairs

[2013] NZHC 1254

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2012-485-330 [2013] NZHC 1254

BETWEEN  PUB CHARITY Applicant

ANDDEPARTMENT OF INTERNAL AFFAIRS

Respondent

Hearing:                   27 May 2013

Counsel:                  D M O'Neill for Applicant

K Muller and A Sintenie for Respondent

Judgment:                29 May 2013

JUDGMENT OF WILLIAMS J

In accordance with r 11.5, I direct the Registrar to endorse this judgment with the delivery time of 4.30pm on the 29th May 2013.

[1]      Pub Charity holds a class 4 gambling licence.  It operates pokie machines at pub and club venues around the country.  Those venues are owned or operated by third party operators.  Pub Charity pays those operators certain costs being overheads incurred in siting and operating Pub Charity’s pokie machines at those venues.  The amount that can be paid by Pub Charity to the venue operator is controlled by a Gazette notice issued by the Secretary of the Department of Internal Affairs under s 116 of the Gambling Act 2003.

[2]      The current Gazette notice was issued in 2008 and it sets maximum amounts that can be claimed.  Those amounts have not been changed since the first Gazette notice under the 2003 Act which was issued in 2004.  The essential complaint is that

the maximums imposed in the Gazette notice are out of date and too low.

PUB CHARITY v DEPARTMENT OF INTERNAL AFFAIRS [2013] NZHC 1254 [29 May 2013]

[3]      The vehicle chosen by Mr O’Neill to air this dispute is an application for declaratory judgment. The relief sought is as follows:

(a)       A declaration that the Plaintiff is entitled to reimburse site operators with actual necessary and reasonable costs of operating under an operator’s licence or a venue licence and not be constrained nor limited by the Defendant’s limits as determined by internal policy.

[4]      As far as I can tell, that relief is to the effect that Pub Charity can ignore the Gazette notice when paying the actual, reasonable and necessary expenses of the venue operators.  It is, as I indicated to Mr O’Neill, a courageous proposition.

[5]      It is in that context that Mr O’Neill applies for further and better discovery.

The discovery sought is in these terms:

That the Defendant file and serve an affidavit of documents discovering all memoranda, correspondence, emails and any communication with the Secretary of Internal Affairs in relation to actual, reasonable and necessary costs on which the Secretary has been consulted.

[6]      The phrase actual, reasonable and necessary costs is sourced to the definition of net proceeds in s 2 of the Gambling Act 2003.  Mr O’Neill’s argument is that the Gazette notice issued pursuant to s 116 is constrained by that phrase.  By the terms of s 372(3), the Secretary must consult with gaming industry players before setting limits by Gazette notice under s 116, although by the terms of s 372(5) a failure to consult cannot be fatal to the notice.

[7]      Mr O’Neill wants the paper record of consultations leading up to the 2008

Gazette notice.  It is not clear on the case as pleaded, whether he is also seeking the record in relation to post-2008 consultations.

[8]      As  I  indicated  in  the  hearing  of  this  matter,  it  is  my  clear  view  that consultations with respect to setting the Gazette notice limits are not relevant to the case as pleaded.   Pub Charity seeks a declaration that it can ignore the Gazette notice.  I cannot see how consultations with respect to the notice can be in any way relevant to such a proceeding.

[9]      The application for further discovery must be dismissed accordingly.

[10]     That is not an end to the matter.  During the course of hearing the application, it became clear that in fact the application needs to be better pleaded.  Mr O’Neill’s case is really about the legality of the Gazette notice. As far as I can tell, Mr O’Neill argues that the 2008 notice was required to represent the actual, reasonable and necessary costs of venue operators on the date that it was made, and it did not.  And secondly, even if it did, it no longer does and there is a positive obligation on the Secretary of regular review.  The proceedings need to be repleaded and consideration needs to be given to s 7 of the Judicature Amendment Act allowing declaratory judgment proceedings to be treated as if they are judicial review proceedings.

[11]     However the matter is repleaded (and Mr O’Neill is of course not constrained in that respect by the way in which I have articulated the essence of his case going forward).   There is no way that this matter will be ready for the two day fixture allocated to it in July.

[12]     That  fixture  is  vacated  accordingly  and  the  following  new  timetabling directions are made by consent:

(a)       amended statement of claim by 17 June 2013;

(b)      statement of defence to amended statement of claim by 8 July 2013; (c)        any further discovery/inspection by 5 August 2013;

(d)      any further interlocutories by 19 August 2013; (e)      setting down date 2 September 2013;

(f)       plaintiff’s affidavits to be filed and served by 23 September 2013; and

(g)      defendant’s affidavits to be filed and served by 21 October 2013.

Williams J