Tabcorp Holdings Ltd v Victoria

The High Court has dismissed an appeal against a decision of the Victorian Court of Appeal relating to state contracts on gaming operator’s licences in Victoria. After gaming machines were legalised in Victoria in 1991, the State created a duopoly between TAB (then a statutory corporation) and the trustees of an estate which would later become Tatts Group Ltd by issuing them with gaming licences. After TAB was privatised (becoming Tabcorp) and listed on the ASX, Victoria granted it a statutory right to a payment if new licences were granted after the expiry of its licence under s 4.3.12(1) of the Gambling Regulation Act 2003 (Vic). Similar arrangements were made with the trustees, though the new licences payment was effected through a clause in a 1995 contractual agreement with the Minister for Gaming. In 2008, Victoria restructured the gaming industry and both Tabcorp and Tatts lost the right to conduct gaming operations, which were now open to smaller venue-based licence holders by creating 27,500 new ‘gaming machine entitlements’. Both companies claim they are entitled to a payment because of the issue of these new licences. (Tatts is involved in a separate appeal before the High Court based on its contractual arrangements.) The central question in the lower courts and before the High Court was whether the phrase ‘new licences’ in s 4.3.12(1) is confined by the words ‘under this Part’ to relate only to new licences created under pt 3 ch 4, or whether it has a broader, generic meaning such that it extends to licences that are substantially similar to those granted under that Part. The Court of Appeal dismissed Tabcorp’s appeal against the primary judge’s decision, holding that the phrase must be given its more specific meaning of only relating to licences granted under pt 3 ch 4 (see [23]ff).

The Court (French CJ, Kiefel, Bell, Keane and Gordon JJ) unanimously dismissed the appeal, holding that the ‘grant of new licences’ means the grant of a wagering licence and a gaming licence issued under pt 3 ch 4 on the basis of the plain and ordinary meaning of s 4.3.12(1) and its context, including its legislative history. The Court held that ‘new licensee’ should be read as the holder of the wagering licence and the gaming licence (see the formulation at [52]). That ‘grant of new licences’ must refer to granting a new wagering licence and gaming licence was compelled by the text because the headings and structure of the Act conjoined the two licences (at [54]), because the terms ‘licences’ and ‘the wagering licence and the gaming licence’ were used interchangeably in the Act because they were the sole subject matter of the Part (at [59]), and because the method for calculating the payment referred back to the price for both new licences (at [60]ff). The Court also held that the legislative history, namely the later 2008 amendments, support this conclusion. Section 4.3.4A(1), inserted in 2008, clarified that the Part applies only to licences issued in 1994 and does not authorise the grant of any further wagering licence or gaming licence: contrary to Tabcorp’s submission, the Court held that this change did not deprive s 4.3.12 of any practical content or make it redundant but rather was made to end the duopoly between Tabcorp and Tatts at the expiration of Tabcorp’s licences, and not before (see at [74], and see also [78][88]). Finally, the Court rejected Tabcorp’s claim that it was entitled to payments under s 4.3.12(1) because allocating those entitlements on the ‘grant of new licences’ ignored and was inconsistent with the commercial context in which the 2003 Act must be construed: rather, the context of dismantling the duopoly indicated that this meant the any licence other than those ‘formerly’ held by Tabcorp (see [89][95]).

High Court Judgment [2016] HCA 4|
Result Appeal dismissed
Related Matter Tatts Group Ltd
High Court Documents Tabcorp Holdings Ltd
Full Court Hearings [2015] HCATrans 289  11 November 2015
[2015] HCATrans 288  10 November 2015
Special Leave Hearing [2015] HCATrans 117   15 May 2015
Appeal from VSCA [2014] VSCA 312 4 December 2014
Trial Judgment, VSC
[2014] VSC 301 26 June 2014
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About Martin Clark

Martin Clark is a PhD Candidate and Judge Dame Rosalyn Higgins Scholar at the London School of Economics and Political Science and Research Fellow at Melbourne Law School. He holds honours degrees in law, history and philosophy from the University of Melbourne, and an MPhil in Law from MLS. While at MLS, he worked as a researcher for several senior faculty members, was a 2012 Editor of the Melbourne Journal of International Law, tutor at MLS and various colleges, a Jessie Legatt Scholar, and attended the Center for Transnational Legal Studies Program.