(2) There is no basis for concluding (as Mr Fitzsimons, who alleges it, must prove) that they were not secured thereafter by reason of the expiry of the nominated card.
Conclusion on second issue
81 It follows that the second issue must be answered adversely to Mr Fitzsimons. It is unnecessary to consider the alternative way in which this issue was framed, given that question 1(b) of the issues did not arise and, had it arisen, would have been answered in the negative.
Third issue: consequences of any (hypothetical) illegality
82 The conclusion that I have reached make it unnecessary to consider this and the following issues. However, given that the resolution of these issues would require findings of fact, I shall deal with them in case I am wrong in what I have said so far.
The parties' submissions
83 Mr Alexis submitted that each contract - i.e., each bet - made in contravention of s81(1)(c) of the Totalizator Act was void. Thus, he submitted, all monies paid pursuant to each such contract were paid under a mistake: namely, that TAB was entitled to demand, and Mr Fitzsimons was obliged to make, those payments. Mr Alexis submitted that this mistake was common to TAB and Mr Fitzsimons. The consequence of the mistake, Mr Alexis submitted, was that Mr Fitzsimons was entitled to restitution of all monies paid by reason of the mistake. Mr Alexis accepted that Mr Fitzsimons would be required to give credit, or as Mr Alexis put it make counter-restitution, for all winnings received.
84 Mr Sheahan submitted that s81(1)(c) did not render void any contract made in contravention of it. Thus, he submitted, there was no operative mistake - mutual or otherwise - by reason of which Mr Fitzsimons made his payments. Mr Sheahan went further. He submitted firstly that Mr Fitzsimons, who bore the onus on this issue, had not demonstrated that he was influenced by any mistake in making the payments in question; and, secondly, that the better inference on such evidence as was available (Mr Fitzsimons having chosen not to give evidence) was that Mr Fitzsimons would have made the payments even if he had been apprised of the possibility of illegality. In any event, Mr Sheahan submitted, restitution should not be ordered against TAB because it had changed its position, on the faith of the payments made to it by Mr Fitzsimons, by paying out in accordance with the statutory scheme each pool into which each bet of Mr Fitzsimons had been "invested".
The pleaded case
85 Mr Fitzsimons' "pleaded" case (to use a convenient but inaccurate term in relation to his amended commercial list statement) is less than clear. Paragraph 27 of the contentions in that document reads as follows:
27. At all material times during the operation of the credit betting facility between TAB and the first cross claimant, when TAB accepted bets from the first cross claimant that were paid for at or before the time the bets were made by debiting the said facility, the first and/or second cross defendants and the first cross claimant were acting under the mistaken belief, understanding or assumption that TAB was entitled to accept bets from the first cross claimant that were paid for by debiting the said facility and that TAB was not prohibited from doing so by section 81(1)(c) of the Totalizator Act 1997.
86 Mr Sheahan submitted that this paragraph alleged only the acceptance of bets, not the making of any payment. The relevant payments, he submitted, were those made by Mr Fitzsimons weekly to replenish the credit facility. There was no allegation, nor evidence, that any such payment was made on the faith of any mistaken belief.
87 It is not necessary to resolve this point. Mr Sheahan was content to fight the case on the basis that, whether the payments were to be taken as those made by debiting the credit facility each time a bet was made and accepted, or those made weekly to replenish the credit facility, Mr Fitzsimons was asserting that they were made by reason of causative mistake.
Does section 81(1) avoid contravening contracts?
88 This aspect of the debate was conducted by reference to the decision of the High Court of Australia in Yango Pastoral Company Pty Limited v First Chicago Australia Limited (1978) 139 CLR 410 and subsequent cases. In Yango Pastoral, the respondent carried on banking business in Australia without possessing the necessary authority to do so. It thereby contravened s8 of the Banking Act 1959, and was subject to a penalty of $10,000.00 for each day during which that contravention continued. The question for decision was whether a mortgage given by the appellant to the respondent, or guarantees of the appellant's liability to the respondent, were enforceable.
89 The facts in Yango Pastoral are clearly distinguishable from the facts of this case. In Yango Pastoral, the prohibition was against the carrying on of banking business. There was no express prohibition against the making of contracts in the course of carrying on that unauthorised business. In this case, the statutory prohibition is aimed directly at the making of the contract: a bet that is not made in one of the three authorised ways must not be accepted. It is of course the acceptance of the bet that results in the making of the contract.
90 Jacobs J at 430 stated the general principle as follows:
When a statute expressly prohibits the making of a particular contract, a contract made in breach of the prohibition will be illegal, void and unenforceable, unless the statute otherwise provides either expressly or by implication from its language.
91 Other members of the court - in particular, Gibbs ACJ and Mason J (with whom Aickin J agreed) spoke to similar effect. Gibbs ACJ said at 413:
It is often said that a contract expressly or impliedly prohibited by statute is void and unenforceable. That statement is true as a general rule, but for complete accuracy it needs qualification, because it is possible for a statute in terms to prohibit a contract and yet to provide, expressly or impliedly, that the contract will be valid and enforceable. However, cases are likely to be rare in which a statute prohibits a contract but nevertheless reveals an intention that it shall be valid and enforceable… .
92 Mason J said at 423:
The principle that a contract the making of which is expressly or impliedly prohibited by statute is illegal and void is one of long standing but it has always been recognised that the principle is necessarily subject to any contrary intention manifested by the statute. It is perhaps more accurate to say that the question whether a contract prohibited by statute is void is, like the associated question whether the statute prohibits the contract, a question of statutory construction and that the principle to which I have referred does no more than enunciate the ordinary rule… [I]t is a matter of construing the statute and in construing the statute the court will have regard not only to its language, which may or may not touch upon the question, but also to the scope and purpose of the statute from which inferences may be drawn add to the legislative intention… .
93 Because Yango Pastoral was not a case of express prohibition, it was unnecessary for the Court to consider the circumstances in which the statute might provide, expressly or by implication, that a contract made in breach of the prohibition might not be void and unenforceable. The same general observation may be made as to subsequent cases.
94 Mr Sheahan noted that s81(1)(c) imposed a penalty for each contravention. He relied on the observations of Mason J in Yango Pastoral at 429, where his Honour stated that there was "much to be said for the view that once a statutory penalty has been provided for an offence the rule of the common law in determining the legal consequences of commission of the offence is thereby diminished." A little later on the same page, his Honour observed that where "Parliament has provided a penalty which is a measure of the deterrent which it intends to operate in respect of non-compliance… it is not for the court to hold that further consequences should flow".
95 Gibbs ACJ spoke to similar effect. His Honour said at 413 that "[w]here a statute imposes a penalty upon the making or performance of a contract, it is a question of construction whether the statue intends to prohibit the contract in this sense, that is, to render it void and unenforceable, or whether it intends only that the penalty for which it provides shall be inflicted if the contract is made or performed."
96 Although their Honours were speaking of a statutory provision, including the imposition of a statutory penalty, that did not directly prohibit the making of the contract in question, their observations may be capable of wider application.
97 The question, of the enforceability of a contract made in contravention of a statutory prohibition, has been considered on many occasions since Yango Pastoral was decided. See, by way of very incomplete example only, Nelson v Nelson (1995) 184 CLR 538 and Fitzgerald v FJ Leonhardt Pty Limited (1997) 189 CLR 215. Both Nelson and Fitzgerald were cases where there was no direct statutory prohibition affecting the contract in question.
98 The question arose recently in Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 81 ALJR 1622. In that case, it was alleged that the first respondent, in its dealings with various state and territory purchasing authorities, engaged in anti-competitive conduct contrary to ss46 and 47 of the Trade Practices Act 1974. The principal issue was whether the first respondent was protected by derivative crown immunity. The majority (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ) held that it was not. In dealing with that issue, their Honours noted at 1635 [44] that the relevant contravening conduct was unilateral, in the sense that it was only the first respondent that could contravene the provisions in questions. In those circumstances, their Honours said, "[t]he consequences of such illegality for the rights of the respective parties will not necessary be the same".