Betfair Pty Limited v Racing New South Wales

REASONS FOR JUDGMENT 1 There are two questions to be determined. The first is whether the respondents are entitled to have discovery from the applicant ("Betfair") in the terms of the categories which they have proposed. The second is the question of who should bear the costs of a motion brought by Betfair seeking certain (now agreed) categories of discovery from the respondents.

Respondents' categories of discovery 2 By a notice of motion filed 17 April 2009 the respondents seek discovery of certain categories of documents from Betfair. By the time the motion was heard, all that remained in dispute were categories 2 to 7, 9 to 11, 13 to 15, 17 to 20, 25 and 26 in the document handed up at the commencement of the hearing entitled "Categories of discovery for the applicant proposed by the first and second respondents". 3 Before descending into the resolution of these issues it is useful to deal with a general proposition advanced by the respondents. They say that Betfair's case is that the relevant approvals impose a discriminatory burden upon it and that that burden affects its profitability. That case rests, so say the respondents, on two premises: (a) that the burden alleged is, in fact, imposed as a result of the respondents' approvals; and (b) that the effects on Betfair's profits have been caused by the discriminatory burden alleged. 4 The respondents argue that they should be entitled to test, and if necessary, displace these premises. As to the former, the respondents suggest that it may be possible that the burden under which Betfair alleges it toils is self-imposed and not inflicted by the respondents' approvals. As to the latter, they similarly submit that it is possible that Betfair's profitability has been impacted, not by the alleged protectionist effects of the approvals, but as a consequence of Betfair's own commercial decisions. 5 At the root of both arguments is a single concept. It is the idea, well-known in the law, that a plaintiff must prove causation and that a defendant is generally free to seek to contest the connexion between conduct impugned and damage suffered. In that context, it is always open to a defendant to allege that the true cause of a plaintiff's loss lies elsewhere. 6 This case, however, is not a claim for loss and damage resulting from delict. Instead, it is a complaint that certain behaviour is protectionist and, hence, unconstitutional. Viewed at that level of generality, it is difficult to see why the position of Betfair is relevant beyond issues of standing. The question is whether the respondents' approvals impose a discriminatory burden on interstate trade. What the internal affairs of the interstate traders happen to be seems to be largely irrelevant. 7 That initial impression of irrelevance is not dispelled by a close consideration of the respondents' arguments. They say, for example, that it is relevant to know the terms of Betfair's dealings with other state regulators because those dealings may, in turn, throw light on why Betfair has selected its particular business model. But why Betfair has chosen to operate in a particular way is no answer to a claim that those who chose to operate that way are deleteriously affected by the consequences of discriminatory protectionism. A law which prohibited the importation of goods from Tasmania would not evade the prohibitions in s 92 of the Constitution by showing that a particular plaintiff had decided to operate from Tasmania because of its pleasing climate and pleasant environs. So too, the reasons for which Betfair has decided to operate a betting exchange seem to me to have no relevance to a claim that a State law said to discriminate against such operations infringes s 92. 8 It is true that Betfair alleges in paragraphs 96 and 97 of the amended statement of claim that its profitability has been adversely affected by the approvals. However, that allegation is not caught up in the central claims concerning s 92 at paragraph 98 to 104 and 105 to 109. Paragraphs 96 to 97 appear in a section of the pleading entitled "Betfair's payments to the racing industry" to which they do not appear naturally apposite. It may be that they are relevant to standing although I need not presently determine that question. A significant point to be made is the minor role the allegations play both in the pleading as framed and in the constitutional issues engaged. I would not regard discovery directed to the allegations in those paragraphs as a sensible use of time or resources. That matters because of the terms of Practice Note 14 which make plain that discovery in this Court is not a right and is governed by notions of necessity and proportionality. Betfair drew my attention to the comments of Hill J in Cassidy v Medical Benefits Fund of Australia Ltd [2001] FCA 700 who at [24] confirmed the need to assess the relevance of the material sought against the burden involved in its production. There is evidence that the burden is non-trivial. 9 In light of those general marks I turn to the disputed categories.