The Secretary for Internal Affairs v Kilbirnie Tavern Limited HC WN Civ-2007-485-1988

[2008] NZHC 2306

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2007-485-1988

UNDER  the Declaratory Judgments Act 1908

IN THE MATTER OF     the Gambling Act 2003

BETWEEN  THE SECRETARY FOR INTERNAL AFFAIRS

Plaintiff

ANDKILBIRNIE TAVERN LIMITED First Defendant

ANDCLIVE ALAN BROOKS Second Defendant

ANDTHE LION FOUNDATION Third Defendant

ANDTHE GAMBLING COMMISSION Fourth Defendant

Hearing:         10 April 2008

Appearances: FMR Cooke QC & JAL Oliver - Counsel for the plaintiff

DS Alderslade & KW Kemp - Counsel for the Third Defendant
J.A. Browne - Counsel for the Fourth Defendant

Judgment:      7 May 2008 at 3.00 pm

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by Associate Judge Gendall on 7 May 2008 at

3.00 pm pursuant to r 540(4) of the High Court Rules 1985.

Solicitors:           Crown Law, PO Box 2858, Wellington

Chapman Tripp, Barristers & Solicitors, PO Box 2206, Auckland 1140

Wilson Harle, Barristers & Solicitors, PO Box 4539, Shortland Street, Auckland

THE SECRETARY FOR INTERNAL AFFAIRS V KILBIRNIE TAVERN LIMITED AND ORS HC WN CIV-

2007-485-1988  7 May 2008

[1]      The third defendant (“Lion Foundation”) applies to strike out the plaintiff’s (“Secretary”) claim pursuant to r 186 High Court Rules.  This application is opposed by the plaintiff.

[2]      Before me, a preliminary matter of jurisdiction arose.   I now consider that issue.

Jurisdiction Issue

[3]      Initially, when this strike-out application was called before me on 10 April

2008, I raised a jurisdiction issue with counsel for the Secretary and counsel for the Lion Foundation.  This related to s 26J(4)(c) Judicature Act 1908.  The question was whether  as  an  Associate  Judge  I had  jurisdiction  to  hear  the  present  strike-out application which relates to proceedings which seek a declaration pursuant to the Declaratory Judgments Act 1908.

[4]      On this question of jurisdiction, counsel subsequently filed memoranda with their submissions and, having now had an opportunity to consider those, I turn to address this issue.

[5]      As to this question of whether an Associate Judge has jurisdiction to deal with an application to strike out a proceeding which seeks declaratory relief, there seems to be scant direct authority on this point in previous decisions.

[6]      The  jurisdiction  of  Associate  Judges  to  deal  with  strike-out  applications arises pursuant to s 26J and s26IA Judicature Act 1908.

[7]      In Reid v New Zealand Fire Service Commission (1985) 8 PRNZ 550 this Court held that a Master (now an Associate Judge) did not have jurisdiction to strike out a judicial review proceeding however as to do so would involve the “grant of relief” on an application for judicial review in terms of s 26J(4) Judicature Act 1908.

[8]      The issue here however is whether the limits in s 26J(4) may also apply to the present situation.  On this, s 26J(4) Judicature Act 1908 provides:

“Nothing in sub-section (1) or sub-section (2) of this section authorises the making of any rule which confers on Associate Judges any jurisdiction or power –

(a)      to   grant   an   Anton   Piller   order,   or   an   injunction   (whether interlocutory or otherwise);

(b)      to grant any relief on an application for review under section 4(1) of the Judicature Amendment Act 1972;

(c)      to grant any relief in any proceedings for a writ or order of or in the nature of mandamus, prohibition, or certiorari, or for a declaration or injunction;

(d)       to grant an application to remove any person from public office; (e)  to try the right of any person to hold any public office.”

[9]      One reading of s 26J(4)(c) might lead to the conclusion that an Associate Judge could not strike out any proceeding for a “declaration”.   It is not clear, however, whether that is a conclusion intended by the words used.  The reference to mandamus, prohibition and certiorari in s 26J(4)(c) indicates that sub-section (c) is really directed towards the High Court’s judicial review jurisdiction under Part 7 of the High Court Rules rather than declaratory orders or injunctions in normal proceedings.   It may be that the reference in sub-section (c) to a declaration may have arisen because Courts do not make injunctions directly against the Crown but rather the Courts declare what the Crown ought to do.   In my view there is a reasonable argument that if it was intended by this provision to exclude the jurisdiction to grant any relief in proceedings under the Declaratory Judgments Act

1908 this would have been specifically listed in the sub-section just as reference to the Judicature Amendment Act 1972 has been.

[10]     In the past there have been a number of cases where Masters or Associate

Judges have considered strike-out applications under the Declaratory Judgments Act

1908, although it does appear in each case that this was without discussion of the jurisdictional point.

[11]     By way of example, in Rupa v Bank of New Zealand High Court Auckland, 5

February 2007, CIV 2006-404-5581, Associate Judge Abbott declined to grant a declaration sought by the plaintiffs, but granted summary judgment to the defendants in relation to the plaintiff’s claim and judgment on the defendant’s counter-claim for a declaration that it had power to sell mortgaged properties in order to recover sums owed to it.

[12]     Further, in Jew v Jew (2002) 22 FRNZ 479, Master Lang (as he then was) struck out a claim under the Declaratory Judgments Act 1908 and the Property (Relationships) Act 1976 as he considered it had been commenced in the wrong Court.

[13]     Finally, in both Commerce Commission v Sweetline Developments Limited (2000) 6 NZBLC 103,130 and in Ullrich v Ullrich (1996) 10 PRNZ 253, Master Venning (as he then was) refused to strike out claims seeking declarations under the Declaratory Judgments Act 1908.

[14]     An instructive authority here, appears to be the judgment of Miller J in Clark v  Governor  General  (High  Court  Wellington,  2  February  2006,  CIV-2004-485-

1902).  In that case Miller J dealt with an application by the plaintiff for an extension of  time  to  seek  a  review  of  a  decision  of  an  Associate  Judge  striking  out  the plaintiff’s second cause of action. The question of jurisdiction was raised.  In Clark, the respondent did not seriously oppose the application for extension of time for the review which was granted.   The second cause of action with which the strike-out application was principally concerned sought a declaration that the actions of the defendant against the plaintiff breached ss 9 and 23(5) of the New Zealand Bill of Rights Act, the Convention against Torture, the International Covenant on Civil and Political Rights, the Principles on the Effective Investigation and Documentation of Torture and Other Cruel Inhuman or Degrading Treatment of Punishment adopted by

the General Assembly of the United Nations on 4 December 2000 or the Manual on the Effective Investigation and Documentation of Torture and Other Cruel Inhuman or Degrading Treatment of Punishment (Istanbul protocol).

[15]     On the jurisdiction question Miller J noted first that r 61A High Court Rules provides that Associate Judges have the jurisdiction of a Judge sitting in Chambers. This rule adds, however, that nothing in the rule confers jurisdiction in respect of the matters  specified  in  ss  26J  (3)  and  (4)  Judicature  Act  1908.     Interlocutory applications including those to strike out proceedings are heard in Chambers unless the Court otherwise directs under r 251.

[16]     Miller J in his judgment went on to note that the second cause of action in that proceeding, which the defendant applied to strike out, sought relief by way of declarations that the defendants had breached the New Zealand Bill of Rights Act and the international instruments noted above.

[17] On these aspects Miller J stated at paras. [21], [22] and [23] of his judgment:

“[21]  However, s 26J(4)(c) refers to relief in the form of a declaration.  Ms Schmidt argued that in context, ‘declaration’ refers to a declaration granted in administrative law proceedings, including proceedings in which prerogative remedies are sought.   It was said that the jurisdiction to make declarations under the Declaratory Judgments Act 1908 is distinct from the exercise of the Court’s supervisory jurisdiction.  Associate Judges have dealt with applications under the Declaratory Judgments Act; see for example Commerce Commission v Sweetline Distributors (2000) 6 NZBLC 103,130. However, counsel could not identify any case in which the jurisdiction issue has been confronted.

[22]     The language of s 26J(4)(c) appears to have been taken from s 4(1) of the Judicature Amendment Act.  That Act was designed to simplify judicial review by creating a single procedure encompassing all such applications.  It confers jurisdiction to review the exercise of statutory powers and it establishes a single procedure that also applies to review of non-statutory or

prerogative powers.  For that reason it was not sufficient for the drafter to refer in s  26J(4) only  to  applications  under  s4(1).    In  order  to  exclude judicial review from the Associate Judges’ jurisdiction, it was also necessary to refer, as s4(1) of the Judicature Amendment Act does, to relief that the Court might grant in an application for judicial review.  I conclude that the drafter intended only to exclude judicial review, and not to  prohibit  the making of declarations in other proceedings.  If that were not so, s 26J(4)(a), which excludes injunctions, would be redundant; the word ‘injunction’ also appears in subsection (4)(d). (sic).

[23]     A proceeding under the NZBORA is not an application for judicial review:    see  for  example  Simpson  v  Attorney-General  (Baigent’s  case) [1994] 3 NZLR 667, 675.  Accordingly, s26J(4) does not preclude Associate Judges from exercising their jurisdiction to strike out proceedings under the NZBORA.  I conclude that the Associate Judge had jurisdiction to strike out the second cause of action.

[18]     With respect I concur with these views expressed by Miller J.  I too reach the conclusion that the drafter of s 26J(4) Judicature Act 1908 intended only to exclude judicial review under the Judicature Amendment Act 1972 from the jurisdiction of Associate Judges and not to prohibit the making of declarations in other proceedings. I agree that if that were not the case then s 26J(4)(a) which excludes injunctions would be redundant.   And it is clear that declarations under the Declaratory Judgments Act 1908 are sought in a wide range of cases and situations.

[19]     In Young v Police (2000) NZAR 92 similar issues arose. There, the Court of Appeal considered an appeal against a decision of an Associate Judge striking out the appellant’s proceeding in which he sought judicial review of certain actions of the police and others under s 27 New Zealand Bill of Rights Act 1990.  The Court of Appeal held that, although following Reid v NZ Fire Service Commission an Associate Judge may not have jurisdiction to strike out a claim seeking judicial review under the Judicature Amendment Act 1972, an Associate Judge did have jurisdiction to strike out judicial review proceedings which were brought in terms of

s 27 New Zealand Bill of Rights Act 1990.  That decision clearly reached a similar conclusion to that expressed by Miller J in Clark v Governor General.

[20]     I concur with these views and the approach expressed by Miller J in Clark v Governor General that Associate Judges do have jurisdiction generally to strike out a Declaratory Judgments Act 1908 proceeding unless this is specifically an application for judicial review under the Judicature Amendment Act 1972.

[21]     Finally, on this, in submissions advanced to me by counsel for the fourth defendant (“the Commission”), it was suggested that even if the above conclusion is not correct, an Associate Judge will only lack jurisdiction in the present case if the approach in Reid v New Zealand Fire Service Commission is correct.   It will be remembered that in that case the High Court held that a Master did not have jurisdiction to strike out a judicial review proceeding as to do so would involve the “grant of relief” on an application for judicial review in terms of s 26J(4)(b) Judicature Act 1908.

[22]     Counsel noted, however, that in Young v Police (2000) NZAR 92 the Court of Appeal, although finding that the appellant’s claim was not one made under the Judicature Amendment Act 1972 even though it was called a claim for “judicial review” and that “Reid” therefore did not apply, at para. 11, left open the question as to whether Reid was correctly decided.  Similarly, I express no views on that aspect.

[23]     And in passing it is interesting to note the decision of Venning J. in Cordova v Wenzel, High Court Auckland, 22 December 2005, CIV 2005-404-3120.   There, Venning J although deciding in a different jurisdictional area that Associate Judges did have jurisdiction to grant injunctive relief when entering summary judgment under s 26I Judicature Act 1908, notwithstanding the provisions of s. 26IA or s. 26J, did so preferring arguments which generally did not restrict that jurisdiction.   He came to that conclusion noting that, after all, that jurisdiction is a High Court one.

[24]     For the earlier reasons outlined above I conclude therefore that I do have jurisdiction to deal with the present application before the Court to strike out the

Secretary’s  proceeding,  a  proceeding  which  seeks  declaratory  relief  under  the

Declaratory Judgments Act 1908.

[25]     If   I may be wrong in that conclusion, however, then no doubt I will be corrected by a higher authority.   But, leaving that aspect to one side, before me, counsel for the Secretary, counsel for the  Lion  Foundation  and  counsel  for  the Commission all requested that I should deal with the strike out application before the Court on its merits and issue a decision on the application.  And, in any event, they acknowledged  that,  if  there  was  an  issue  as  to  jurisdiction,  here,  (and  in  this judgment it will be noted that I have found otherwise) then that could be the subject of appropriate challenge by way of review.

Strike-Out Application

[26]     I now turn to consider the substantive strike-out application before the Court. [27]     As  I  have  already  noted,  the  Lion  Foundation  applies  to  strike  out  the

Secretary’s statement of claim pursuant to r 186 High Court Rules.

[28]   The first and second defendants (“Kilbirnie Tavern” and “Mr Brooks” respectively) have filed notices of appearance advising they do not wish to be heard on the proceeding generally and in any event will abide the decision of the Court.

[29]     The Commission has similarly filed an appearance noting that it also abides the decision of the Court.

Background Facts

[30]     The Lion Foundation holds a class 4 operator’s licence under the Gambling Act 2003 (“Act”).   It also holds a class 4 venue licence in respect of the gaming machines operated by the Kilbirnie Tavern on its premises at Kilbirnie.

[31]     Recently, as I understand the position, an initiative had been taken at the Kilbirnie Tavern.  In an effort to overcome restrictions arising from the Smoke-Free Environments Act 1990, an exterior wall of the Tavern was altered so that gambling

machines inside the Tavern could be turned around and placed through an opening in that wall and then played from the outside.   Patrons could then use the gaming machines while they smoked.

[32]     The Secretary was concerned at this development.  According to his counsel, that was because of statistical and other evidence that there is a correlation between problem gambling and other addictive behaviours – in particular, that there is a correlation between problem gambling and smoking.   The concern apparently was that, by creating an area specifically designed to enable persons to gamble whilst engaging in other addictive behaviour, an environment was being created that did not minimise the risks of problem gambling.

[33]     The Secretary accordingly added a condition on the class 4 venue licence for the Kilbirnie Tavern specifying that such gambling could not be conducted in areas where smoking was permitted.  In doing so the Secretary utilised powers under s 70 of the Act.   This section gives the Secretary a discretion to add conditions to a licence.

[34]     The Secretary’s decision to exercise his discretion in this way was appealed to the Gambling Commission, pursuant to s 77 of the Act. The Commission, in a written decision dated 16 March 2007 reversed the Secretary’s decision to impose the condition.  The Commission decided that “the key issue in this case was whether the condition was proportionate and fair” (para 27) and that ultimately that the “Commission  did  not  consider  the  potential  harm  minimisation  benefits,  which would always be limited to smoking problem gamblers, to be sufficiently established to justify the restrictions proposed” (para 41).

[35]   The Secretary was not satisfied with the outcome of the appeal to the Commission.   Indeed, it is apparent from this proceeding that in considering the renewal of the appropriate licence the Secretary wished to impose the very condition

the Commission determined it could not on the issue of that licence.

[36]     So it transpired that when Lion Foundation applied for the renewal of the class 4 venue licence for the Kilbirnie Tavern, the Secretary took the view that at the

time of that renewal, a different set of statutory provisions applied.  Under s 72(5) of the Act the Secretary noted that he “must” refuse to renew a licence if the Secretary is not satisfied of the matters specified in s 67.  Under s 67 the Secretary “must” be satisfied that “the risk of problem gambling at the class 4 venue is minimised” (s67(1)(p)).

[37]     The Secretary now says he finds himself in a position where he is quite unclear as to the correct interpretation of these provisions.  His preliminary view is apparently that the initiative taken at Kilbirnie Tavern means that the risk of problem gambling is not being minimised.  When the Commission in its decision addressed the power to add conditions, however, it concluded that it was necessary to balance the proposed benefits to be obtained from the condition against the impacts on the licence holder and the patrons.   But the Secretary maintains that in taking this approach, the Commission was specifically addressing a different legislative provision, and expressly did not address the provisions relevant to a renewal (see para. 20 of its decision).  It is suggested that there does not appear to be room in s 72 for a balancing test of the kind the Commission concluded existed for s 70.  But the Secretary says the difficulty now is that the decision of the Commission, and the complex nature of the provisions, creates uncertainty as to the correct test to be applied by the Secretary on renewal.  The Commission was considering  exactly the same factual circumstances, and it “read in” a balancing/fairness/reasonableness requirement to s70.  Hence the Secretary explains the present proceeding has been brought in this Court seeking clarification of the issue.

[38]     Lion  Foundation  in  response  brings  the  present  application  to  strike  out because it maintains the Secretary’s proceeding is an abuse of process, being an attempt to re-litigate a matter already determined by the Commission and to circumvent a clear restriction in the Act or any right to appeal that determination to the High Court.

[39]   In addition, the Lion Foundation says the Secretary’s proceeding is fundamentally misconceived.  For a variety of grounds it argues the issues which the Secretary seeks to be the subject of declaratory direction are simply not appropriate for relief of this nature.

Counsel’s Arguments and My Decision

[40]     The Lion Foundation brings this strike-out application pursuant to Rule 186 of the High Court Rules.  That Rule provides:

“Without prejudice to the inherent jurisdiction of the Court in that regard, where a pleading—

(a)     Discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

(b)     Is   likely   to   cause   prejudice,   embarrassment   or   delay   in   the proceeding; or

(c)     Is otherwise an abuse of the process of the Court,—

The Court may at any stage of the proceeding, on such terms as it thinks fit, order that the whole or any part of the pleading be struck out”

[41]     A  strike  out  application  must  proceed  on  the  assumption  that  the  facts pleaded in the statement of claim are true and the Court must be satisfied that the causes of action are so untenable that they could not succeed – Attorney-General v Prince and Gardner [1998] 1 NZLR 262.

[42]     In  addition, Attorney-General v Prince and  Gardner made clear that  the strike out jurisdiction is one to be exercised sparingly and only in a clear case where the Court is satisfied it has the requisite material – Gartside v Sheffield Young and Ellis [1983] NZLR 37, 45 and Electricity Corporation Limited v Geotherm Energy Limited [1992] 2 NZLR 641. The fact, however, that applications to strike out raise difficult questions of law and require extensive argument does not exclude jurisdiction – Gartside v Sheffield Young and Ellis.

[43]     To succeed, the Lion Foundation must show that the cause of action is so clearly untenable that it cannot possibly succeed – R Lucas and Son (Nelson Mail) Limited v O’Brien [1978] 2 NZLR 289 and Takaro Properties Limited v Rowling [1987] 2 NZLR 314.

[44]     The category identified in r186(c), abuse of the process of the Court, extends beyond the grounds in r186(a) and (b).  The category defies precise definition and subsumes various instances of misuse of the Court’s process.   Examples include proceedings brought for an improper motive (Goldsmith v Sperrings Ltd [1977] 2 All ER 566 (CA)); attempts to relitigate matters already determined (Hardy v Elphick [1973] 2 All ER 914 (CA)); Collier v Butterworths of NZ Ltd (1997) 11 PRNZ 581) and where the plaintiff continues proceedings without any intention of bringing them to trial (Grovit v Doctor [1997] 2 All ER 417).

[45]     Relevantly,   para.   18   of   the   Secretary’s   statement   of   claim   seeks determination  pursuant  to  the Declaratory  Judgments  Act  1908  of  a  number  of questions consequent upon the Lion Foundation’s application to renew its venue licence for the Kilbirnie Tavern.  That para. 18 sets out the issues in the following way:

“18.     The plaintiff seeks determination of the following questions:

18.1Does   problem   gambling,   taking   its   meaning   from   the definition of problem gambler in s 4(1), mean gambling that causes or may cause harm?

18.2What is the test for satisfying the Secretary that the risk of problem gambling is minimised at a venue under s 67(1)(p) of the Gambling Act 2003?

18.3In forming the opinion whether the risk of problem gambling is minimised pursuant to s 67(1)(p), must the Secretary consider risks that may arise, and not just risks that have arisen, or will probably arise?

18.4Can the Secretary decide to renew a Class 4 venue licence if there are practicable steps that the venue could take that the Secretary considers would reduce the possibility of gambling that might cause harm, and the venue has refused to take them?

18.5If the Secretary is of the opinion that the risk of problem gambling at a Class 4 venue is not being minimised as a consequence of the venue permitting Class 4 gambling to take place in areas where smoking takes place, must the Secretary refuse renewal of the Class 4 venue licence as a consequence of s 67(1)(p), and having regard to the fact that all gambling is generally prohibited under s 9?

18.6Does the decision of the Gambling Commission referred to in paragraph 16 hereof require the Secretary to renew the Class

4 venue licence for the Kilbirnie Tavern under s 72 if the Secretary is not satisfied that the risk of problem gambling at that venue is being minimised as a consequence of the venue permitting Class 4 gambling to take place in  areas  where smoking takes place?

18.7When considering an application to renew a Class 4 venue licence under s 72, may the Secretary impose conditions under s 70(2) of the Act directed to minimising the risk of problem gambling, and renew the licence if satisfied that the risk of problem  gambling  will  then  be  minimised  pursuant  to  s

67(1)(p)?

18.8     When imposing conditions on a Class 4 venue licence under s

70(2) in order to ensure that the risk of problem gambling at that  venue  is  minimised  pursuant  to  s  67(1)(p),  is  the Secretary required to balance that risk against the interests of non problem gamblers who wish to simultaneously smoke and use gaming machines or against the inconvenience that may be caused to those patrons as a result of the conditions imposed?

[46]     As  I have  noted,  these  determinations  are  sought  under  the  Declaratory

Judgments  Act  1908.     This  statute  in  s  10  provides  that  the  jurisdiction  is

discretionary although counsel for the Lion Foundation accepted here that the Court has wide powers to make declarations under both the Declaratory Judgments Act

1908 and its inherent jurisdiction – Re Chase [1989] 1 NZLR 325 at 330.

[47]     It is clear that the role of the Court in considering applications under the Declaratory Judgments Act 1908 is to declare and not apply the law, particularly in a case where there may be disputed facts – Melville v NRMA Insurance New Zealand Limited, High Court Wellington, 17 April 2002, Wild J, CP70/01.

[48]     This does not mean, however, that the Court can make declarations on any matter whatsoever – see Gouriet v Union of Post Office Workers [1978] AC435 per Lord Diplock at 501.

[49]     In the present case, the Lion Foundation contends that the declarations sought by the Secretary are simply inappropriate.   It is suggested that a number of the questions  for  determination  would  have  the  Court  exceed  its  jurisdiction  and  a number are simply ones upon which the Court should exercise its discretion to refuse to make the orders sought.

[50]     On this counsel for the Lion Foundation argued first that the questions raised by the Secretary are obscure and they are  an  attempt  in  effect  to  overturn  the decision  of  the  Commission,  a  specialist  tribunal,  here.  He  contended  that  this attempt to displace the role of the specialised Gambling Commission must be seen as an abuse of process under r 186.  He argued that the proceeding here is essentially initiated for the purpose of mounting a collateral attack on a final decision which is adverse to the Secretary reached by a tribunal of competent jurisdiction in previous proceedings and this should not be countenanced – see Hunter v Chief Constable of West Midlands & Anor [1981] 3 AllER 727.

[51]     Counsel for the Lion Foundation then maintained that there is no uncertainty as to the meaning of the relevant parts of the Act.  He argued that the meaning of s

72(5) and s 67(1)(P) of the Act is clear.  The Secretary must refuse to renew a Class

4 venue licence if he is not satisfied as to the matters specified in s 67 including that the risk of problem gambling at the venue is minimised.  On this, counsel argued that

the term “satisfied” is of fundamental importance in the legislation.  Decisions with respect to this term have meant that the Courts have imposed limits which have resulted in the term “satisfied” effectively meaning that the decision maker must act reasonably, in good faith and upon proper grounds.

[52]     As such, the position of the Lion Foundation is that there can be no genuine dispute here as to the meaning of these sections of the Act.  Counsel referred me to Electoral Commission v Tate [1999] 3 NZLR 174 which noted that the Court’s purpose is to declare the meaning of a statute “when it is validly in dispute” and where there is a “disputed interpretation of a statutory provision”.   Here on the contrary, counsel for the Lion Foundation contended that the Secretary is merely seeking to endorse its own decision making and its own view of the Act without showing that there is any contrary view or dispute as to its validity.

[53]     The Lion Foundation contended that if there is no genuine dispute between the parties then a Court is not able to invoke s 2 Declaratory Judgments Act 1908 – Peters v Davison (No. 2) (1998) 18 NZTC 13,656 and Gazley v Attorney General (1994) PRNZ 313 (CA).

[54]     Next, counsel for the Lion Foundation argued that it is not the function of the Court to make declarations in abstract.  A declaration is a discretionary remedy so the Court has jurisdiction to prevent its abuse and an inherent power to refuse relief where there is no genuine legal issue between proper parties – see Auckland City Council v Attorney-General [1995] 1 NZLR 219.

[55]     Next, the Lion Foundation noted that the holder of a discretionary power, such  as  the  Secretary here,  must  not  surrender  that  power  by  acting  under  the direction of another.   Finally, the Lion Foundation argued that an important issue always is whether any useful purpose will be served by the declaration sought – Re Chase [1989] 1 NZLR 325. This is also a factor which features in the exercise of the Court’s discretion under s 10 of the Act.

[56]     Assuming next that the Court does determine that it has jurisdiction to make a declaration in a particular case such as the present, nevertheless it still retains a broad

discretion in terms of s 10 of the Act as to whether such orders should be made in the circumstances of the particular case – NZ Insurance Company Limited v Prudential Insurance Company Limited [1976] 1 NZLR 86 (CA). In that case McCarthy P at page 85 held that:

“The jurisdiction to make orders under the Declaratory Judgments Act is wholly discretionary.   The cases defining the attitude of the courts in the exercise of that discretion are numerous (see Sim’s Practice & Procedure (11th   ed),  Vol  2  p  823) and  they  establish  certain  guidelines  which  will generally be followed.  The Court will not answer purely abstract questions in anticipation of an actual controversy.  It will not deal with mixed questions of fact and law.   The procedure is designed to provide a speedy and inexpensive method of obtaining a judicial interpretation where the matter in

dispute cannot conveniently be brought before the Court in its ordinary jurisdiction and where a declaratory judgment would be appropriate relief. But the procedure should not be adopted where the party who institutes them cannot without real difficulty have the matter in dispute disposed of in an ordinary action.”

[57]     Similarly in Kung v Country Section NZ Indian Association Incorporated [1996] 1 NZLR 663 Hammond J noted the discretionary nature of the s 10 remedy and went on at page 665 to state:

“As to the exercise of that discretion, I doubt if there has been a  more concise and (with respect) insightful statement than that of Viscount Radcliffe in Iben Ewaka v Egbuna [1964] 1 WLR 219 at pp 224-225:

‘[The] two primary considerations [are] that the power to make declarations is conferred, surely not by accident, in wide and general terms, and that what is conferred is a discretion to be exercised according to the facts of each individual case …[I]t is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with  a  proper  sense  of  responsibility  and  a  full  realisation  that  judicial

announcements ought not to be issued unless there are circumstances that call for their making.’”

[58]     Finally, in his submissions, counsel for the  Lion  Foundation  went  on  to consider each of the specific questions in paras. 18.1 to 18.8 of the Secretary’s statement  of  claim  noted  at  paragraph  [45]  above.    In  doing  so,  he  specified particular objections to each question.  I now turn to consider these.

Question 18.1

[59]     According to counsel for the Lion Foundation this poses an abstract question and asks the Court to give an advisory opinion rather than seeking a specific order.

[60]     It is contended that there is no genuine legal dispute or controversy between the parties in relation to this question.

[61]     The Lion Foundation argues that to issue a declaration would impinge on the jurisdiction of the Secretary and the Gambling Commission whereby the Secretary has a discretion under the Act to balance various interests and to be satisfied as to a variety of factors before it grants or renews a Class 4 Venue Licence, or adds any condition to such a licence.

Question 18.2

[62]     Again, it is contended that this poses an abstract question and seeks the Court’s advisory opinion as to the appropriate test for satisfying the Secretary that the risk of problem gambling is minimised at a venue.   It is said that if the Court were to issue a declaration in response to this question, it would be in danger of limiting the discretion reposited in the Secretary (and the Gambling Commission on appeal) in determining what factors to take into account in minimising that risk of problem gambling.   “Satisfaction” here it is said confers on the decision maker a wide discretion, subject only to the qualification that they must act reasonably, in good faith and on proper grounds.  A warning is issued that the Court must be wary

of usurping the role of the Secretary.  Further, it is said again that there is no genuine legal dispute or controversy between the parties in relation to this question.

Question 18.3

[63]     Once again, it is said this poses an abstract question and seeks the Court’s advisory opinion in a situation where there is no genuine legal dispute or controversy between the parties.  Similar arguments to those noted in paragraph [62] above are raised.

Question 18.4

[64]     Again, it is said this poses an abstract question seeking the Court’s advisory opinion as to a hypothetical/theoretical situation. In particular a determination that the Secretary cannot decide to review a Venue Licence in the stated circumstances is said to be an unlawful fetter on the Secretary’s discretion to decide each case on its own merit and facts.

Question 18.5

[65]     It is said once more that this question is in the abstract where no genuine legal dispute or controversy arises and that it seeks the opinion of the Court which, if it were to make a declaration of the nature sought, would effectively become the decision maker for this particular venue.   This is notwithstanding that the Court knows very little of the circumstances.  It is argued that this would be an unlawful abdication of the Secretary’s discretion to  make  such  decisions  and  would  also impinge on the Gambling Commission’s powers if the decision were to be appealed.

Question 18.6

[66]     Once again it is said that this also poses an abstract question seeking an advisory opinion from the Court which, if a declaration was made, would run the risk of limiting the discretion of the Secretary to determine the basis for renewal of the Class 4 Licence at this particular venue.  According to the Lion Foundation this would amount to an unlawful abdication of the Secretary’s discretion.

Question 18.7

[67]     Again it is said for the Lion Foundation that this question puts the Court in the position of intervening in the exercise of the discretion by the Secretary.   The argument continues that this again poses an abstract question, it asks for the Court’s advisory opinion and also does not reflect any genuine legal dispute or controversy between the parties.

Question 18.8

[68]     Finally this question is also said to pose an abstract question seeking the advisory opinion of the Court.  Not only is it contended that this places the Court in the position of becoming the decision maker in relation to issues raised by this particular venue and thus results in an unlawful abdication of discretion by the Secretary, but it also seeks a declaration the effect of which is said to be to impact on the rights and interests of other parties not before the Court.

[69]     I will consider the Secretary’s response to these particular criticisms from the Lion Foundation directed at each of the individual questions raised at paragraph [102] and following of this judgment.

[70]     I  turn  now  to  consider  the  Secretary’s  arguments  and  opposition  to  the present strike-out application.   In doing so, a useful starting point is the essential argument advanced for the Secretary that there is a genuine uncertainty about the appropriate meaning to be given to the gambling legislation generally and specific provisions thereof, and that this needs to be resolved by the Court.   On this the

Secretary argues that it is entirely appropriate for he, as a statutory officer with significant statutory duties imposed on him by Parliament, to seek the assistance of the Court as to the proper meaning of the legislation in cases of genuine doubt such as the present.

[71]     In the circumstances prevailing in the present case, it is clear that the Act creates a statutory duty on the part of the Secretary and there is no right of appeal to the Court regarding this.

[72]     Given this, the Secretary argues that the suggestion that the Court is being asked  hypothetical  or  abstract  questions  here  cannot  be  sustained.     This  is particularly the case given that there is a particular issue in relation to Lion Foundation’s present renewal application in relation to Kilbirnie Tavern which is before the Secretary and now before the Court in these proceedings.

[73]     Under the Act, the Secretary notes that he is authorised to exercise licensing powers in relation to Class 4 venues on three separate occasions.   The first stage arises when an application for a new licence is first made and his initial approval is required under s 67 of the Act.  The second stage arises from the general oversight the Secretary through the Department of Internal Affairs has during the period of the licence.  In this regard the Secretary has specific powers under s 70 of the Act which includes the power under s 70(3) that the Secretary may amend or revoke a condition of a Class 4 Venue Licence or add new conditions to such a licence.  This power is clearly a discretionary one.

[74]     There is then a third stage contemplated by the Act which is when the period of a licence is about to expire and an application for renewal is made under s 72(1). Under s 72:

“(5)     The Secretary must refuse to renew a Class 4 Venue Licence if - …

(b)      Any investigations carried out by the Secretary cause the Secretary not to be satisfied about any of the matters specified in s 67.”  (emphasis added)

[75]     The statutory prerequisites to be satisfied are those stipulated in s 67 and are the same prerequisites that apply when initially granting a venue licence.   In that respect therefore this list includes:

“(1)     The Secretary must refuse to grant a Class 4 Venue Licence unless the Secretary is satisfied that …

(p)       The  risk  of  problem  gambling  at  the  Class  4  venue  is minimised.”  (emphasis added)

[76]     Significantly at this third stage the Secretary is not given a discretion.  Either the requirements of the Act are met or not.  If they are not met then the Secretary must refuse a renewal.  This differs from the situation which arises in relation to the discretionary power to add conditions to a licence under s 70.

[77]     Whilst the Secretary addresses these requirements the status quo remains and the old licence continues to operate under s 72 of the Act.

[78]     In  the  present  case,  as  I  have  noted,  the  decision  of  the  Gambling Commission arose out of an appeal under s 77 of the Act from the Secretary’s discretionary decision to add a condition under s 70.   The Commission was accordingly not addressing the duties that the Act imposed upon the Secretary on a renewal application.  It seems that the Secretary did draw the renewal provisions to the attention of the Commission but the Commission did not take these provisions into account.  It held at paragraph [20] of its decision:

“[20]  While the imposition of conditions may satisfy the Secretary that he may grant a licence under s 67, the Secretary was not, in this instance, considering a new or renewal application for a Class 4 Licence.  This being the case, the Commission considered it to be unnecessarily confusing to rely on s 67 in order to establish jurisdiction to impose the condition.  The power to impose conditions under s 70 depends on the construction and application of that section, and it is to that section the Commission has had recourse.”

In other words the Commission was considering here the statutory power to impose conditions and not the statutory duty of the Secretary on renewals under s 72(5).

[79]     Ultimately the Commission concluded at paragraph 41 of its decision:

“[41] Overall, the Commission did not consider the potential harm minimisation benefits, which would always be limited to smoking problem gamblers, to be sufficiently established to justify the restrictions proposed. Assessing the reasonableness of the condition, the Commission decided accordingly, to allow the appeal and reverse the Secretary’s decision.”

[80]     Given the decision of the Commission and the approach it took to the appeal, the Secretary maintains that he is now faced with a significant dilemma.   In an affidavit dated 26 March 2008 which is before the Court, Mr Keith Richard Manch (“Mr Manch”) an employee of the Department of Internal Affairs confirms that it is he who in this case holds delegated power to exercise the Secretary’s functions under the  Act.    Mr  Manch  says  in  this  affidavit  that  if  the  question  on  the  Lion Foundation’s application to renew its Kilbirnie Tavern Licence is simply whether the risk of problem gambling is being minimised, then in his preliminary view under the circumstances  prevailing  here  this  prerequisite  is  not  met.    This  he  explains  is because the Kilbirnie Tavern has created an environment which he believes increases the risk of problem gambling because an area has been created where there is an overt association of gaming with other addictive behaviour.  Presumably this arises because of the statistical data and expert evidence which is said to be directed to the acknowledged association between smoking and problem gambling.

[81]     But on these aspects Mr Manch in his affidavit complains that the legislation is far from straight forward.   It is apparent that the Gambling Commission was dealing with exactly the same factual scenario when considering the appeal against the Secretary’s imposition of conditions on the licence when it concluded that s 70 of the Act requires a balancing exercise and that it was disproportionate to impose a condition to prevent the activity occurring.

[82]     Counsel for the Secretary notes that s 67 of the Act does not appear to contemplate that the Secretary will balance benefits and burdens, or consider the overall fairness and reasonableness of conditions directed at minimising the risk of problem gambling.  He notes, however, that there was no such requirement in s 70 of the Act either.  It was a requirement “read in” to s 70 in the test the Commission applied, however, when considering Lion Foundation’s appeal from the imposition of conditions on its licence.

[83]     Counsel notes that it may be that such requirements should also be read into s

67 of the Act.  He comments that it does not seem likely that Parliament would have intended different approaches to be applied to the condition imposing and renewal powers under the Act.  Mr Manch, however, in his affidavit says there is now some considerable uncertainty as to what the statutory requirements may be.   In those circumstances he maintains that the Secretary is taking a proper approach which is to ask for the Court’s assistance in identifying the scope of the Secretary’s statutory duty under the Act, given what are quite difficult interpretation questions.

[84]     I remind myself at this point that the application before the Court is one to strike out the Secretary’s proceeding.  As the authorities have made clear, to succeed on this application the Court must be satisfied that the Secretary’s causes of action here  are  so  untenable  that  they could  not  succeed.    In  other  words  it  must  be established that this is not an appropriate case for declaratory relief and/or that it is inevitable that the Court would decline to give declaratory relief when it comes to exercise its discretion – Attorney-General v Prince & Gardener and R Lucas & Son (Nelson Mail) Limited v O’Brien.

[85]     On this, counsel contended that the Secretary now faces a genuine difficulty in relation to the proper interpretation of his responsibilities under the Act.  In those circumstances it is suggested that it would not be appropriate for the Court to strike out the proceeding at this early point.

[86]     In  Electoral  Commission  v  Tate  [1999] 3 NZLR 174, the limits on the

Court’s  power  to  decline  to  provide  declaratory  relief  in  relation  to  statutory

interpretation questions, like the question before the Court here, was explained in a decision of a full Court of Appeal by Thomas J in the following terms:

“The question of the Court’s decision

[30]     A Court may, of course, decline to make a declaratory judgment or order under the  Declaratory  Judgments  Act  1908.    Section  10  expressly provides that the jurisdiction conferred upon the Court to give or make a declaratory judgment or order shall be discretionary and that the Court may, on any grounds which it deems sufficient, refuse to give or make any such judgment or order.   There may be a number of sound reasons why a declaratory judgment or order should be refused.  Examples of grounds on which such judgments or orders have been declined are cases where the question is one of mixed law and fact, or where the question is an abstract or hypothetical question, or where the order would have no utility.  See Laws of NZ, Courts para 133. The Rt Hon Justice Hardie Boys.

[31]     The Courts cannot, however, refuse to give or make a declaratory judgment  or  order  on  a  ground  which  is  inconsistent  with  the  Courts’ essential function.  Broadly speaking, that function is to interpret and apply the law to the facts of a particular case.  With respect to statutes, the Courts have   the   function   of   authoritatively   construing   legislation,   that   is, determining the legislation’s legal meaning so far as is necessary to decide a case before it.  See Laws of NZ, Statutes para 120, Garth Thornton.  It is the Courts’  task  to  interpret  and  enforce  provisions  which  confer  rights,  or impose duties, or vest powers in named persons or bodies, including governmental agencies.  In discharging this task they are giving effect to the will of Parliament.  See Pater Cane, An Introduction to Administrative Law (Oxford Clarendon Press, 1996) at p12.   To the extent that the task is not discharged a person or body may be deprived of a statutory power. Consequently, it is imperative that persons or bodies have access to Courts of law to determine the rights, duties or powers which Parliament has conferred on them by statute.”

[32]   The Courts’ function to interpret and enforce statutory law has implications for the rule of law.  Unless the meaning of a statute is declared when it is validly in dispute, the law, and with it, the lawfulness of the person or body’s actions, will be uncertain.  Thus, where a body purports to act in accordance with a disputed interpretation of a statutory provision, and on the proper interpretation it does not have that power, the body will be acting illegally and any person affected will be deprived of a right or rights which he or she is entitled to enjoy under the law.   To avoid this situation the Courts’ authoritative interpretation is required.  No one under the rule of law is able to escape the disinterested judgment of the law, and rendering that disinterested judgment is the function of an independent judiciary.”

[87]     Mr Cooke QC suggested that this is precisely the position here.  I agree.  In recognising his statutory duty to comply with the Act, before me the Secretary took the position that he is now unsure what the scope of this duty is because he is unclear what the test for assessing compliance with the statutory requirements may be.  As I see the position, it is the Court’s constitutional function to interpret the legislation so that the Secretary may comply with his duty.  In my view that is enough to satisfy the Court that the Lion Foundation in this application has been unable to meet the strike out threshold and to show that this is not an appropriate case for the granting of declaratory relief.

[88]     Further, it is clear from many of the authorities cited to the Court on behalf of the Lion Foundation in support of this application, that they involved situations where the Court held, after full hearings, that relief should be declined in the particular circumstances of those cases.  There, in conducting full hearings, the Court was fully appraised of all the relevant circumstances as it had the advantage of hearing all the evidence and full argument.   I remind myself, however, that in the present case, we are at an early stage of this proceeding.  That said it is difficult in my view to reach the conclusion at this preliminary stage that it is inevitable that relief would be declined here.

[89]     It is instructive also to consider previous decisions of this Court when it has been asked to strike out declaratory judgment proceedings such as the present.  The

general approach appears from two decisions, that of Gendall J in Fonterra Co- Operative Group Limited v Commerce Commission & Anor, High Court Wellington,

23 February 2005, CIV 2004-485-273 and that of Ronald Young J in Telecom New

Zealand  Limited  v  Commerce  Commission  &  Anor,  High  Court  Wellington,  6

October 2005, CIV-2004-485-2118.

[90]     In Fonterra Co-Operative Group Limited Fonterra applied to strike out the Commerce Commission’s application for declaratory relief in relation to the meaning to be given to particular provisions in the Dairy Industry Restructuring (Raw Milk) Regulations 2001.  The Court declined this application.  In doing so Gendall J held:

“21     It is trite to say that a public body may seek a declaration as to the extent of its statutory powers.   In the present case the Commission seeks a declaration not only as to its powers, but its duty, in setting a discount rate under reg 9(2) if Fonterra does not act in a particular way.  Such an act or event has to be in actual contemplation at the time of the applications; The Parapara Iron-Ore Co (Ltd) v Barnett

& Anor (1913) XXX11 NZLR 1112.

………

23Whether a declaration as sought by the Commission would be denied by the Court under the Declaratory Judgments Act, is another matter. But there are substantial questions of law to be determined in these proceedings.  Although Mr Farmer QC says the “negative retention” proceedings are quite separate, from the point of view of a party seeking declaratory orders there is no relevant distinction.   An example of the correct use of the Declaratory Judgments Act (described by Wild J in Melville to be an “excellent example”) can be found in Whakatane District Council v Keepa (HC ROT M7/00, 18

December   2001,   Paterson   J)   where   the   Council   obtained   a declaration establishing that it had a right to levy rates on certain lands in circumstances where some of the owners claimed or would claim exemption.

24If the Commission  in  its  counterclaim  obtains  from  the  Court  an interpretation of the legislation that enables it to act under reg 9(2) in the future, then it would be able to do so without the prospect of further judicial review action being taken against it in respect of that point.   Correspondingly, and equally importantly, if in these proceedings the Court expresses a view interpreting the legislation favourably for Fonterra, then that should mean that on any future occasion where Fonterra uses such a cost of capital rate the Commission could not then act under reg9(2).  The point is that the outcome of the Declaratory Judgments counterclaim as to what the law is will likely obviate later judicial review proceedings or, on the other hand, unwarranted intervention by the Commission.

………

26The claims now sought concerning the proper construction of this somewhat complex legislation cannot be untenable to justify striking out.   Nor can they be categorised as abuse of procedure.   Just as Fonterra originally sought judicial review in respect of this issue it also seeks declaratory guidance on the “retention” issue for the purposes of calculating the wholesale milk price component.  It is not appropriate at this stage for Fonterra to prevent the Commission from seeking similar guidance on a different component of the wholesale milk price calculation.  Strike out is declined.”

[91]     In Telecom New Zealand Limited a different decision was reached.   The Court there struck out Telecom’s claim for declaratory relief in relation to the meaning  of  certain  provisions  in  the  Telecommunications  Act  2001.     Those provisions related to access to telecommunications services which was regulated by the Commerce Commission.  Importantly, and unlike the present case, there was no particular application for access that was the subject of the proceeding, but Telecom took issue with the interpretation that the Commerce Commission had given to the legislation in previous decisions.  As a consequence that proceeding was brought.

[92]     In Telecom New Zealand Limited the Court dealt with a number of distinct grounds advanced for a strike out.  First, it was argued that the High Court’s role to hear appeals from Commerce Commission decisions meant that the Court had no role to grant declaratory relief in advance of an appeal coming before it.  As to this point, Ronald Young J held:

“30I reject TelstraClear’s proposition that the scheme of the Act in effect ousts the High Court’s declaratory jurisdiction.  To oust jurisdiction in such circumstances would, in my view, require explicit statutory direction.   There is none.   I am not therefore prepared to reach a clear conclusion in this case on the strike out application that the scheme of the Act inferentially ousts the declaratory judgment jurisdiction of the High Court (see Pyx Granite Co Ltd v Ministry of Housing and Local Government and Others [1960] AC 260, 286 (HL)).  I reject that ground of support for the strike out application.”

[93]     Notwithstanding this, however, the Court held in that case that Telecom was seeking declarations in relation to purely abstract questions without relevant factual matters being before the Court.  On this Ronald Young J held:

“32I  accept  the   proposition   that   the   purpose   of   the   declaratory judgments, whether by virtue of the Declaratory Judgments Act, the common law or the Judicature Amendment Act, is not to decide abstract questions distant from actual controversy.    I accept TelstraClear’s submissions that there must be an act done or a desire to do an act, or (in the Judicature Amendment context) a proposed act, the validity or legality of which depends upon the construction of a statute, before the Court will consider a declaration.   While not framed as an attack on the Commerce Commission’s previous decisions effectively this is what the plaintiff’s proceedings are about. Although the plaintiff’s declarations are sought with respect to prospective decisions of the Commerce Commission, and it claims to use these past decisions as examples only, in my view, its case is reliant on these past determinations.  And despite the submission of

Telecom that they do not seek retrospective effect from the declarations, in fact, retrospective effect from any declaration made is inevitable.  Thus, if a declaration is made which is different from the conclusion of the Commerce Commission, then TelstraClear (which has changed its position based on the previous decisions) will be faced with the prospect of having to reconsider its position in view of the ‘new’ interpretation.”

[94]     Ronald  Young  J  then  went  on  to  consider  and  distinguish  the  Fonterra decision.  He did say precisely because in the Fonterra case there was no right of appeal (just as, in the present case, there is also no right of appeal) and because in Fonterra it was the statutory body bringing the proceeding (as is the position in the present case).  On this he held:

“55The defendants say the Fonterra judgment is different factually and has no relevance in this case.  A critical difference between this case and Fonterra is that in this case a disaffected party may appeal any determination of the Commerce Commission relating to the meaning of the phrases.   In  Fonterra  there  was  no  appeal  right  from  the Commerce Commission’s decisions and no method therefore to challenge the determination other than by way of a declaratory judgment.  And in Fonterra it was the statutory body, the Commerce Commission, that came to the Court seeking its guidance.”

[95]     In my view the present case is in precisely the same position as the Fonterra decision.  It is not in the same category as the Telecom decision for the following reasons:

a)       Unlike Telecom the Secretary here is not  endeavouring to  answer questions in the abstract, but is seeking declaratory relief in relation to a particular application before him for renewal of the Kilbirnie Tavern Licence that he must address under the statute.

b)Like the situation which prevailed in the Fonterra decision, there is no right of  appeal to the High  Court  in  the  circumstances  of the present case and therefore no alternative procedure by which the statutory interpretation issue can be addressed.   As Ronald Young J held in Telecom, the Court’s function of giving declaratory relief is not ousted by inference.    In addition, as I have noted earlier and as the Court of Appeal confirmed in Electoral Commission v Tate, it is the constitutional function of the Court to give answers to legitimate statutory interpretation issues when they arise.

[96]     For  these  reasons  also  I would  dismiss  the  Lion  Foundation’s  strike-out application here.

[97]     Notwithstanding these conclusions, before me counsel for the Secretary put forward an alternative theoretical path which the parties to this proceeding could have followed.   First, this would entail the Secretary making a decision on Lion Foundation’s renewal application based upon his view of the meaning of the duty Parliament has imposed.  Then, assuming that this decision was adverse to the Lion Foundation, an appeal could be taken to the Gambling Commission who could then form their own view on the meaning of the statute.  In that event, if the Secretary was dissatisfied with the Gambling Commission’s interpretation of the statute, he could then bring judicial review proceedings so that this Court could provide an authoritative interpretation of the statute.  On this, there are examples of a statutory body judicially reviewing its own appeal body – see Australian Competition and Consumer Commission v Australian Competition Tribunal [2006] FCAFC 83. I accept, however, that for a number of reasons this would not provide a desirable course and in any event in my view it would not justify the Court here striking out the Secretary’s present proceedings. Those reasons include:

a)       Until matters were properly disposed of, the Secretary would still be required to comply with his statutory duty in the meantime and he would remain genuinely uncertain as to what the statute required him to do.  To expect that he might proceed in a manner that may involve him breaching his statutory duty would be inappropriate.

b)The alternative theoretical approach would require both the Secretary and the Gambling Commission to proceed with an evaluation of the Lion  Foundation’s  renewal  application  under  complex  legislation when there is arguably considerable uncertainty about the correct approach.   This would necessarily occur without the advantage of a Court having first identified what may be required under the statute.

c)       The parties could then be required to engage in a judicial review proceeding with the consequent further delays and complexities that this would involve.  In the Fonterra case, the prospect of subsequent judicial review proceedings was regarded as a reason why declaratory relief should be given at an earlier stage.

d)In the meantime, while such a process was followed, which might also include potential judicial review proceedings, the Secretary could well be required to deal with other licence renewal applications for other venues and licensees who had taken similar initiatives to that of the Lion Foundation here.   Indeed, in his affidavit at paragraph 7, Mr Manch refers to three other venues where such applications have been received.

e)       Whilst the Secretary deals with renewal applications, the Act requires that  historic  licences  will  continue  to  operate.    This  effectively provides therefore an adequate preservation of the status quo whilst the questions posed by the Secretary here are resolved in these declaratory judgment proceedings.

[98]     In my view there is a need for these proceedings and the issues they involve to be advanced with reasonable speed so that the difficulties the Secretary indicates he faces can be resolved.   The theoretical alternative path which, it must be said counsel for the Secretary has acted properly in identifying here, would not as I see it be a desirable course to take in the circumstances of the present case.

[99]     Finally, I turn to the Lion Foundation’s criticism directed at each of the specific questions in paragraphs 18.1 to 18.8 of the Secretary’s statement of claim. Those criticisms are outlined earlier at paragraphs [59] to [68] of this judgment.

[100]   On these aspects, a first point to be made is that the questions raised by the Secretary seem simply to encapsulate the interpretation difficulties which the Secretary currently faces.   Whether or not the Court will make declarations responding to each of these questions will always remain an issue for the Judge who conducts the substantive hearing of this case.

[101]   A second point which arises here is that it is to some extent artificial to endeavour to address each of these questions divorced from the underlying facts of this case.  That is what as I see it the Lion Foundation’s criticisms essentially do. Each of the questions in my judgment is posed in the context of the matters pleaded by the Secretary in his statement of claim and it is against that factual context that the questions are asked.

[102]   I turn now to consider the significance of each of the individual questions which are outlined at paragraph [45] above.

Question 18.1

[103]  This question arises because the Act does not give a definition of what “problem gambling” actually is.   The question is directed at seeking guidance on that issue given that the Secretary is required to address the risk of problem gambling when considering a renewal application.

[104]   In my view this does not pose an abstract question as contended by the Lion Foundation nor does it impinge on the Secretary’s discretion, and it is properly put here.

Question 18.2

[105]   This question directly raises the legislative interpretation issue in relation to the Kilbirnie Tavern renewal application.   Again, as I see the position, it is not a

hypothetical question as it arises specifically on that application and is an appropriate question to raise here.

Question 18.3

[106]   This particular question focuses on the concept of “risk” that is referred to in s  67(1)(p).    Again,  the  question  arises  specifically in  relation  to  this  particular application before the Secretary.   It involves an issue as to whether the Secretary needs to form a view that an aspect of problem gambling would actually eventuate as a consequence of the steps taken by the Kilbirnie Tavern or is it sufficient to believe that such things may occur?

[107]   The question raised under 18.3 also involves consideration of the meaning to be given to the word “minimise” in the provision and the overall meaning to be given to the broad concept of risk minimisation.

[108]   In my view, there is no proper objection raised to this question which is an appropriate one to be asked here.

Question 18.4

[109]   This question which more specifically identifies the issue which arises with the present Kilbirnie Tavern application, in effect is asking whether s 67(1)(b) of the Act requires the licence holder to take “practicable steps” to reduce the possibility of gambling that might cause harm and further, if the Secretary believes that the Kilbirnie Tavern has not done so (because of the open-air smoking configuration that it has devised) does this mean the Secretary must decline the renewal application?

[110]   Again I accept that this is squarely focused on the interpretation issues that arise for the Secretary and is not a hypothetical or theoretical question.   It is appropriate here.

[111] This question is effectively asking whether there are any additional considerations that the Secretary must address in relation to the present renewal application – such as the fairness, reasonableness or the balancing of benefits and burdens when applying s 67(1)(p) to the application.  In my view it cannot be said this raises a purely abstract question.  The question arises specifically on the present renewal application before the Secretary and is appropriately asked.

Question 18.6

[112]   This question deals with the issue of whether the Gambling Commission’s decision and the approach it has taken to s 70 in that decision, has any impact on the questions the Secretary must ask under s 72 and s 67.  It thereby raises the question of the relationship between the two sets of provisions and also the issue as to the effect of the Gambling Commission’s decision and whether it is “binding” on the Secretary.

[113]   Again as I see it this does not pose simply an abstract question but is an appropriate matter for consideration by the Court.

Question 18.7

[114]   This question relates to the relationship between the condition setting power (s 70) and the renewal power (s 72) exercised by the Secretary under the Act.  It is a more concentrated question and in particular involves an issue as to whether, if the Secretary is of the view that the risk of problem gambling is not being minimised, and he believes that it would be minimised if an additional condition was imposed, is it appropriate for the Secretary to then impose that condition or should he simply decline the application?

[115]   Again, as I see it, these are legitimate statutory interpretation questions that arise here not in any abstract sense but directly from the Lion Foundation’s application for renewal.

[116]   This question arises out of the previous question 18.7.  If the correct approach to  be  taken  by  the  Secretary  here  involves  considering  conditions  that  would minimise the risk of problem gambling (rather than simply declining the renewal application) an issue arises as to whether the Secretary should engage in a kind of balancing exercise that the Commission thought appropriate under s 70.  Once again this appears to be a more concentrated question on the relationship between the condition setting power and the Secretary’s duties on renewal.

[117]   In my view, it is again a legitimate question to be posed by the Secretary and it arises directly out of the renewal application and the circumstances now facing him.

[118]   In  summary  then,  it  will  be  apparent  that,  particularly  given  that  the application before the Court is one for strike out, the Lion Foundation has not been able to put anything before the Court to show that any of the individual questions posed in paragraphs 18.1 to 18.8 of the Secretary’s statement of claim in my view is inappropriate or should be struck out here.

Conclusion

[119]   In conclusion I accept the argument advanced by counsel for the Secretary that the essential point in this proceeding is that the relevant legislation is not clear and this has created a real problem for the Secretary, particularly as the statute creates duties upon him in terms of its provision.  I accept too that the constitutional function of this Court is to determine the meaning to be given to the legislation in question here and that it is reasonably arguable that this Court would be avoiding that function if it struck out the Secretary’s present claim for declaratory relief.

[120]   The Secretary’s claims sought here concerning the proper construction of this somewhat complex legislation in my view cannot be seen as untenable to justify striking out.  As I see it, there can be no question at this stage of the proceedings that it  is  inevitable  that  the  Court  would  decline  to  give  declaratory  relief  to  the

Secretary.  Nor can those claims be categorised as abuse of procedure.  That said, the

Lion Foundation strike-out application must be dismissed.

[121]   An order is now made dismissing the present strike-out application.

Costs

[122]   As to costs, I see no reason here why costs should not follow the event in the normal way.

[123]   Costs  are  therefore  awarded  in  favour  of  the  Secretary against  the  Lion Foundation with respect to this application on a Category 2B basis together with disbursements as fixed by the Registrar.

‘Associate Judge D.I. Gendall’