Doyalson Wyee RSL Club Ltd & Ors v Liquor Administration Board of NSW & Anor

(NSW) Gaming Legislation Amendment (Gaming Machine Restrictions) Act 2000 ss 88AD, 88AE, 88AF LEGISLATION CITED : (NSW) Gaming Machines Act 2001 ss 7, 14, 15, 15AA, 15A, 16, 17, 18, 19, 20, 26, 28, 29, 31, 31A, 56; Pt 3, Div 1, Div 2, Div 3; Pt 5 (NSW) Gaming Machines Bill 2001, Explanatory Memorandum (NSW) Registered Clubs Act 1976 Pt 10, 10B; ss 77, 78, 78A, 88AD, 88AE, 88AF

Rooty Hill RSL Ltd v Liquor Administration Board of NSW [2006] NSWCA 297 CASES CITED : Text: Second Reading Speech, Gaming Machines Bill, Hansard, Legislative Assembly, 30 November 2001, p 19275 Pearce and Geddes, Statutory Interpretation in Australia, 4th ed

Doyalson Wyee RSL Club Limited (plaintiff, 30010/07) Merrylands Bowling Sporting & Recreational Club Limited (plaintiff, 30031/07) PARTIES : Lemon Tree Passage Bowling Club Co-Op Ltd (plaintiff, 30032/07) Erina Rugby League Club Limited (plaintiff, 30034/07) Liquor Administration Board of NSW (first defendant, all proceedings) Attorney General of the State of New South Wales (second defendant, all proceedings)

FILE NUMBER(S) : SC 30010/07; 30031/07; 30032/07; 30034/07

COUNSEL : D Higgs SC w T Faulkner (plaintiffs) M Leeming SC w Ms G Mahony (second defendant)

SOLICITORS : Thomson Playford (plaintiffs) I V Knight, Crown Solicitor (defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30010/07 Doyalson Wyee RSL Club Limited v Liquor Administration Board of NSW & Anor

30032/07 Lemon Tree Passage Bowling Club Co-Op Ltd v Liquor Administration Board Of NSW & Anor

30031/07 Merrylands Bowling Sporting & Recreational Club Limited v Liquor Administration Board of NSW & Anor

30034/07 Erina Rugby League Club Limited v Liquor Administration Board of NSW & Anor

JUDGMENT (ex tempore) 1 HIS HONOUR: Each of the plaintiffs Doyalson Wyee RSL Club Limited, Lemon Tree Passage Bowling Club Co-op Ltd, Merrylands Bowling Sporting & Recreational Club Limited and Erina Rugby League Club Limited, is a registered club which, prior to the commencement on 28 March 2007 of the poker machine freeze [imposed by the (NSW) Registered Clubs Act 1976, Part 10B] had authorisations [under s 78A of that Act] to keep a number of approved poker machines on their premises and subsequently, during the period of the freeze [and prior to the commencement on 2 April 2002 of the (NSW) Gaming Machines Act 2001, s 15] were granted further authorities to keep additional approved gaming devices on grounds of financial hardship [under the Registered Clubs Act s 88AF] ("the s 88AF hardship machines"). Upon the commencement of Gaming Machines Act, s 15, the first defendant Liquor Administration Board was required to allocate to each Club a poker machine entitlement for each approved poker machine that comprised "the frozen number", defined as a number determined by the Board taking into account the number of poker machines authorised to be kept by a club under the Registered Clubs Act as at 28 March 2000, and any increase since that date that had been authorised by the Board. The fundamental issue in these proceedings is whether the Board was bound to allocate to the Clubs poker machine entitlements in respect of s 88AF hardship machines. The legislative history 2 The history of the regulation of poker machines was explained by Basten JA in Rooty Hill RSL Ltd v Liquor Administration Board of NSW [2006] NSWCA 297 at [6]-[20]. For present purposes, it may be summarised as follows. 3 Prior to 2000, the keeping of poker machines in clubs was governed by the Registered Clubs Act, Pt 10. Section 78 provided: 78 Keeping, acquisition and disposal of poker machine

(a) keep a poker machine that is not an authorised poker machine,

(a1) keep an authorised poker machine without complying with any conditions imposed by the Board in relation to the keeping of the machine,

(b) acquire a poker machine without the authority of the Board or without complying with any conditions imposed by the Board in relation to the acquisition of the poker machine, or

(c) dispose of a poker machine without the authority of the Board or without complying with any conditions imposed by the Board in relation to the disposal of the poker machine.

4 Section 78A relevantly provided: 78A Authority to keep poker machine

(1) The Board may authorise a registered club to acquire and keep, or to dispose of, an approved poker machine or an established poker machine.

(3) In the instrument by which it authorises the acquisition, keeping or disposal of a poker machine, or by which it varies an authority, the Board is to identify the machine.

(4) A fee is payable ... whenever an authority to acquire and keep a poker machine is imposed or varied ... .

5 The freeze on the authorisation of further poker machines was effected by the (NSW) Gaming Legislation Amendment (Gaming Machine Restrictions) Act 2000 commencing on 9 May 2000 in the case of clubs. Relevantly, it amended the Registered Clubs Act by inserting ss 88AD, 88AE and 88AF. Section 88AD provided: 88AD Duration of freeze

(b) ending at the time (not earlier than 12pm on 28 March 2001) appointed by proclamation.

(2) The time appointed for the end of the period may be altered by a further proclamation or proclamations published before the time so appointed.

(3) In this Part, the period of the freeze is the period during which this Part applies, as provided by this section.

88AE Number of gaming devices in each club not to be increased during the period of the freeze

(1) The maximum number of approved gaming devices that a registered club may keep during the period of the freeze must not exceed the maximum number of approved gaming devices that the club was authorised to keep under this Act at the beginning of the period of the freeze.

(3) This section is subject to other provisions of this Part.

7 An exception to the freeze was provided, in the case of "hardship", by s 88AF: 88AF Exceptions to the freeze

(1) This Part does not prevent an increase in the number of approved gaming devices that a registered club is authorised to keep under this Act if the club establishes that its financial viability will be seriously threatened during the period of the freeze if it is unable to keep the additional devices.

(5) An authority that is given under this Act for additional devices is to be limited to the extent necessary to prevent the serious threat to the club's financial viability. Accordingly, the authority:

(a) may be given for a lesser number of devices than that applied for, or

(b) may be limited in its duration so that all or any of the additional devices concerned are required to be disposed of at a specified time during the period of the freeze, or

(c) may be subject to any other condition that the ... Board considers appropriate." 8 It is not in issue in these proceedings that, between 28 March 2000 and 2 April 2002, pursuant to s 78A and s 88AF, the Board authorised each of the Clubs to keep additional approved gaming devices: in the case of Doyalson, on 22 February 2002 the Board authorised an additional 35 hardship machines; in respect of Erina, on 15 December 2000 the Board authorised an additional 10 hardship machines and a further 14 hardship machines on 1 March 2001; in the case of Lemon Tree Passage, on 13 August 2000, the Board authorised 20 hardship machines; and in the case of Merrylands, on 29 August 2001 the Board authorised 37 hardship machines. 9 The Gaming Machines Act commenced on 2 April 2002. As Basten JA explained in Rooty Hill RSL Ltd v Liquor Administration Board of NSW (at [15-16]), the 2001 Act replaced the provisions previously found in the Registered Clubs Act: it transposed the prohibition on keeping gaming machines, formerly found in Registered Clubs Act, s 77, to Gaming Machines Act, s 7; the power of the Board to authorise a club to keep or dispose of a gaming machine was transposed from Registered Clubs Act, s 78A, to Gaming Machines Act, s 56; and the exception to the freeze for "hardship", contained in Registered Clubs Act, s 88AF, was transposed to Gaming Machines Act, ss 28 and 29. 10 But the new Act also introduced a novel concept: the "tradeable poker machine entitlement scheme" [Gaming Machines Act, Pt 3 Div 2]. Section 15 provides for the initial allocation of poker machine entitlements: 15 Initial allocation of poker machine entitlements

(1) On the commencement of this section, one poker machine entitlement is to be allocated by the Board

(b) for each approved poker machine that comprises the frozen number of approved poker machines for the premises of a registered club.

(5) For the purposes of subsection (1)(b), the frozen number of approved poker machines for the premises of a registered club is the number that is determined by the Board after taking into account:

(a) the number of poker machines authorised to be kept on those premises under the Registered Clubs Act 1976 as at 28 March 2000, and

(b) any increase in that number after that date and before the commencement of this section that has been authorised by the Board. 11 At first sight, s 15(5)(b), in referring to "any increase in that number after that date and before the commencement of this section that has been authorised by the Board", captures s 88AF hardship machines approved under s 88AF during the period of the freeze. Indeed, there appears to have been no way other than pursuant to s 88AF that there could have been an increase in the number of poker machines after 28 March 2000, before the commencement of s 15 authorised by the Board. However, s 18(3) prohibits the allocation of poker machine entitlements in relation to hardship gaming machines until three years has elapsed from the approval of the machine: 18 General restrictions on allocations of poker machine entitlements.

(3) A poker machine entitlement cannot be allocated in relation to a hardship gaming machine until after the period of 3 years following the date (as determined by the Board) on which the hardship gaming machine was approved to be kept ... on the premises of the club concerned. 12 As, by s 29, "hardship gaming machine" is defined to include a s 88AF hardship machine, s 18 apparently prohibits what s 15(1)(b) commands. The fundamental issue in this case is the resolution of this apparent conflict between s 15(5)(b) and s 18(3) in respect of s 88AF hardship machines. 13 Following the commencement of the Gaming Machines Act, on 2 April 2002, the Board issued certificates of gaming machine entitlements under s 16(2) of the Act, to each of the Clubs. In each case the certificate, under the heading "Entitlements", referred first to a number of what were called "transferable poker machine entitlements", said to be "transferable with forfeiture after hardship relinquished"; the number of those entitlements corresponded to the number of poker machines authorised to be kept on the relevant club's premises as at 28 March 2000. The certificate referred secondly to a smaller number of what were called "hardship gaming machines approved from ... ", specifying the date of the relevant s 88AF authorisation, which were said to be "non-transferable", the number corresponding to the number of machines in respect of which the club held a s 88AF approval. The certificate specified thirdly the "total entitlements held", being the total of the transferable poker machine entitlements and the hardship gaming machine approvals. The certificate then proceeded, under the heading "Authorisation Limit", to state the total number of poker machines that may be authorised subject to application; in each case this corresponded with the total "entitlements" held. Finally, the certificate specified the "SIA threshold", being the social impact assessment threshold under the Act, this number also corresponding with the total entitlements held. Subscribed to each certificate was a statement to the effect "All hardships to be surrendered by ... ", specifying the date on which the hardship authorisation had originally been due to expire. 14 There is no issue as to the transferable poker machine entitlements for the poker machines in respect of which each club had authorisations prior to the freeze; the dispute concerns the "entitlements" in respect of the s 88AF hardship machines. The Clubs contend that the certificate evidences the allocation by the Board, pursuant to s l5(5)(b), of poker machine entitlements in respect of the s 88AF hardship machines, and that the condition purportedly attached to those entitlements - that they are "non-transferable" and are "to be surrendered by" the specified date - is contrary to s 19 and void. Alternatively, the Clubs contend that if there has not yet been an allocation of poker machine entitlements in respect of the 88AF hardship machines, the Board ought to be commanded to perform its duty under s 15 to allocate such entitlements. The Attorney General, intervening, contends that there has been and could lawfully be no allocation under s 15 in respect of s 88AF hardship machines. The scheme of the Act 15 As I have foreshadowed, the fundamental tension which results in this dispute is between s 15(5)(b) and s 18(3) of the Act, which appear to be inconsistent in their application to s 88AF hardship machines. In order to see how this inconsistency should be resolved, the starting point is to construe the Act as a whole. 16 The keystone of the Act is s 56. Subsection (1) provides that a club must not keep or dispose of an approved gaming machine unless the keeping or disposal of the machine is authorised by the Board. Attached to that prohibition is a maximum penalty of 100 penalty units. Then, subsection (2) provides for the Board to authorise a club to keep or dispose of approved gaming machines. By subsection (5), the total number of approved gaming machines that the Board may authorise to be kept on any premises of a registered club from time to time consists of: (a) the number of approved poker machines that corresponds to the number of poker machine entitlements allocated for the time being in accordance with this Act in respect of the premises concerned,

(b) the number of hardship gaming machines kept on those premises,

(c) the number of approved amusement devices kept on those premises. 17 Gaming machines may be either poker machines or amusement devices; it follows from s 56(5) that in order to keep a poker machine, a club must have both an authorisation under s 56(2) and a corresponding "entitlement" - either a poker machine entitlement [s 56(5)(a)], or a hardship gaming machine approval under s 29 in respect of that machine [s 56(5)(b)]. 18 These "entitlements" are addressed by Pt 3 of the Act, which contains four divisions. The first is preliminary, and the fourth contains miscellaneous provisions. The two substantive divisions are Div 2, entitled "Tradeable Poker Machine Entitlements Scheme", and Div 3, entitled "Hardship Gaming Machines". The preliminary division, Div 1, contains one section only, s 14, which (consistently with s 56) provides that the allocation of poker machine entitlements and the approval to keep hardship gaming machines under Pt 3 do not affect the requirement under Pt 5 for the Board's authorisation to keep approved gaming machines in a hotel or club, and that the Board cannot allocate a poker machine entitlement or approve the keeping of a hardship gaming machines if the allocation or approval would exceed the total number of approved gaming machines authorised under Pt 5 to be kept in the hotel or club, reinforcing that both authorisation under s 56, and a corresponding entitlement or approval, is required for a poker machine to be kept on the premises. 19 Part 3 recognises a dichotomy between poker machine entitlements (dealt with in Div 2) and hardship gaming machine approvals (dealt with in Div 3). The dichotomy between the two concepts is introduced by s 14. Accordingly, the effect of s 56 and Pt 3 is that a poker machine can be the subject of an authorisation with s 56 only if it corresponds with either a poker machine entitlement or a hardship gaming machine approval, which are alternative "entitlements". A poker machine entitlement under Div 2 is tradeable, a hardship gaming machine under Div 3 is not; indeed, a hardship gaming machine approval must be surrendered as a precondition to the sale of any poker machine entitlement [s 30]. 20 However, a hardship gaming machine approval may be converted to a poker machine entitlement, but only after a period of three years has elapsed from the date of the hardship gaming machine approval [s 31]. Once it is converted, the relevant machine is counted as corresponding to a poker machine entitlement and no longer as a hardship gaming machine. A machine cannot be both the subject of a poker machine entitlement and also a hardship gaming machine; otherwise the scheme of s 56, providing for total authorisations limited to the total number of poker machine entitlements and hardship gaming machines, would be circumvented, as converted machines would be counted twice. 21 Recognition that the concepts of poker machine entitlements and hardship gaming machine approvals are mutually exclusive is important, because it enables the search for the legislative intention as to how pre-existing s 88AF hardship machines were to be dealt with under the 2001 legislation to be focussed on whether s 88AF hardship machines were to be treated as the subject of poker machine entitlements under Pt 3 Div 2, or as hardship gaming machines under Pt 3 Div 3. Textual Indicia 22 The text of the Act, to which I turn next in endeavouring to resolve the conflict between s 15 and s 18, contains a number of indications, which do not consistently point in the same direction. 23 Commencing with s 15 - and, in particular, with s 15(5)(b) - it is important that the only way in which there could be an authorised increase in the number of poker machines authorised to be kept on club premises after 28 March 2000 and before the commencement of s 15 on 2 April 2002 was pursuant to s 88AF, and all s 88AF hardship machines represented an authorised increase during that period. As Mr Higgs SC, who appeared with Mr Faulkner for the clubs, submits, s 15(5)(b) would have no work to do if it did not catch s 88AF hardship machines. Indeed, I think one can go further than submitting that it would have no work to do in that event; the wording of s 15(5)(b), in its reference to "any increase in that number ... that has been authorised by the Board" is so similar to the wording of s 88AF(1) - "an increase in the number of approved gaming devices that a registered club is authorised to keep under this Act" - that it is difficult to suppose that it was not s 88AF that was precisely in the mind of the draftsperson of s 15(5)(b). Read on its own, s15(5)(b) seems necessarily to contemplate and intentionally to capture s 88AF hardship machines. Indeed, the Board appears to have thought that it did so; in the "Arrangements pursuant to section 15" approved by the Director General on 5 June 2002, the Director General observed that one of the principles which emerged from the Act was "1.2. Where a club has been granted an approval to increase the gaming device restriction number by way of hardship application pursuant to s 88AF of the Registered Clubs Act 1976 then the frozen number should be increased by the approved number". Of course, arrangements subsidiary to the Act, made by authority of the Act by the Director General, are not a legitimate aid to construction of the Act, but it is nonetheless of interest that the Board itself proceeded on the basis of the construction which, at first sight, s 15(5)(b) appears to support. 24 It was suggested that s 15(5)(b) might have had work to do in respect of poker machines other than s 88AF hardship machines, if the freeze had been dissolved/ by proclamation before the commencement of the 2001 Act. While, as a matter of theoretical possibility, that may be so, it does not, in my mind, attract much weight, because the 2001 Act plainly took the freeze as a starting point - as appears, for example, from the reference to "frozen number" in s 15 itself. It is improbable that there was any anticipation that there might be an authorised increase, other than pursuant to s 88AF, after the commencement of the freeze. 25 It was also suggested that s 15(5)(b) had work to do as, in effect, identifying a relevant consideration to be taken into account by the Board in determination of the "frozen number". However, in the context of s 15, it does not appear that there could be any way of "taking into account" any such increase as is referred to in s 15(5)(b), other than by counting the number of that increase and including it in the total "frozen number". Accordingly, this leaves s 15(5)(b) no work to do, if s 18(3) is treated as excluding s 88AF hardship machines from s 15. 26 It is also notable that s 15 is not expressed to be "subject to this Act", or otherwise to be subject to any other provisions of the Act - a formula which was not unfamiliar to the draftsperson, as appears, for example, from ss 20(3) and 26(3). 27 For the Attorney General, Mr Leeming SC, who appeared with Ms Mahony, argued that the words "is to be allocated" in s 15(1) were relatively weak when contrasted, for example, with the mandatory word "cannot" in s 18. I am unimpressed by this argument. The words "is to" are mandatory words, conventionally used as words of command. This view is reinforced by s 15(6), which, in providing that despite subsection (1), the Board "is not required" to allocate an entitlement in certain circumstances, implicitly confirms that the words "is to" impose a requirement or obligation to allocate an entitlement in other circumstances. 28 It was also argued for the Attorney General that the introduction, by later amendment, of subsections (6) and (7), revealed that it was not envisaged that there would be an obligation to allocate poker machine entitlements in every case that fell within subsection (5). However, the effect of subsection (6) is simply to clarify that if an authorisation to keep a poker machine had been granted in circumstances where the relevant club was not lawfully entitled to keep such a machine, then the introduction of the tradeable entitlement scheme was not intended to create a lawful entitlement to keep that machine. I do not think that this advances the Attorney's argument in respect of s 15. 29 Accordingly, looked at on its own, there are significant and strong indications in s 15 that it was intended to capture s 88AF hardship machines, which the arguments advanced to the contrary do not satisfactorily explain. 30 I can pass over ss 15AA and 15A, which were introduced by subsequent amendment. Section 16 provides for the further allocation of poker machine entitlements, after the initial allocation under s 15: 16 Further allocation of poker machine entitlements and certificate of entitlements

(1) Following the initial allocation of poker machine entitlements under section 15, poker machine entitlements may, in accordance with this Act and such arrangements as may be approved by the Director-General, be allocated by the Board from time to time in respect of hoteliers' licences or the premises of a registered club. (2) The number of poker machine entitlements allocated from time to time in respect of a hotelier's licence or the premises of a registered club, along with the corresponding number of approved poker machines authorised under Part 5 to be kept in the hotel or on those premises in accordance with those poker machine entitlements, is to be specified in a certificate issued by the Board to the hotelier or club concerned. (3) The certificate issued under subsection (2) to a hotelier or registered club may also specify the SIA threshold for the hotel or the premises of the club concerned. (4) Any such certificate does not, by itself, confer any entitlement of any kind under this Act. 31 It might be suggested that the opening words, "Following the initial allocation of poker machines entitlement under s 15 ... " bespeak the introduction of a new topic. It is significant that s 16(1) confers a discretion on the Board to allocate further poker machine entitlements, as opposed to the mandatory obligation to do so under s 15. It is also potentially of some significance that, unlike s 15, s 16(1) includes the words "in accordance with this Act", which imports restrictions imposed elsewhere in the Act. 32 Moving to s 17, it provides for the allocation of free poker machine entitlements in respect of certain clubs, in particular new clubs. Once again, it confers on the Board a discretion, as distinct from imposing an obligation, to allocate poker machine entitlements in cases to which it applies. However, such entitlements are not transferable during the period of three years immediately following the date of the allocation. 33 That brings me to s 18. As Mr Higgs has submitted, subsection (1) does no work in respect of an initial allocation of poker machine entitlements under s 15, since in that context the same work is already done by s 15(4). Similarly, subsection (2) does no work in respect of an initial s 15 allocation, as ss 15(3) and 15(5) produce the same result. But subs (3) can be reconciled with s 15(5) only if it is read down to have a limited operation - that is, an operation which excludes from its field hardship machines approved prior to the commencement of the 2001 Act, which means all s 88AF hardship machines - on the basis that s 18 was not intended to operate in respect of initial allocations under s 15, but only on subsequent allocations under ss 16 and 17. 34 There are several obstacles to reading down s 18(3) in this way. First, the heading of the section, "General restrictions on allocation of poker machine entitlements", suggests that the restrictions were intended to be of general and not limited application. 35 Secondly, the term "hardship gaming machine", employed in subs (3) is defined (by s 29) specifically to include a s 88AF hardship machine. Section 29 relevantly provides: 29 Approval to keep hardship gaming machines

(1) The Board may refuse a hardship application, or it may approve of the ... registered club keeping all or some of the number of approved gaming machines sought by the ... club in the application. Any such machine is referred to as a hardship gaming machine .

(2) The keeping of a hardship gaming machine is subject to any requirement under this Division in relation to the forfeiture of the approval to keep hardship gaming machines.

(3) For the purposes of this Act, a hardship gaming machine includes, in the case of a registered club, a section 88AF hardship machine that:

(a) is kept in the club as at the commencement of this section, or

(b) was, before the commencement of this section, authorised by the Board to be kept in the club at some later time.

(4) Any such section 88AF hardship machine is taken to have been approved to be kept in the registered club under this Act.

section 88AF hardship machine means an approved gaming machine authorised to be kept in a registered club as the result of an application that was dealt with under, and determined in accordance with, section 88AF of the Registered Clubs Act 1976 (as in force immediately before its repeal by this Act). 36 Section 29(4) is a strong indication that s 88AF hardship machines were to be treated under the new Act as the subject of hardship gaming machine approvals rather than poker machine entitlements. This is important, because every s 88AF hardship machine would, if s 15(5)(b) applied to them, have had a corresponding poker machine entitlement issued, and if that were so, there was simply no necessity to provide that s 88AF hardship machines be treated as if they were hardship gaming machines approved under Div 3. To treat them as machines approved under Div 3 is inconsistent with treating them as machines in respect of which poker machine entitlements were to be issued under s 15. 37 Accordingly, there are strong indications that s 18(3) was intended to catch s 88AF hardship machines.

Extrinsic Material 38 The extrinsic material is of limited but some assistance. The Explanatory Memorandum for the (NSW) Gaming Machines Bill 2000 includes the following (emphasis added): Division 2 (clauses 15 - 25) provides for the allocation of poker machine entitlements by the Board in accordance with the arrangements approved by the Director General of the Department of Gaming and Racing. Poker machine entitlements will initially be allocated for the frozen number (being the number determined by the Board) of poker machines in a hotel or club. Certain restrictions are placed on the allocation of poker machine entitlements (eg they are not to be allocated in respect of hardship gaming machines until 3 years after the commencement of the proposed Act). Poker machine entitlements are transferable but only in accordance with certain requirements ... .

39 Although this is far from a perfect explanation of Div 2, it does suggest that the intent was that there be a general restriction on allocation in respect of hardship gaming machines until three years after the commencement of the Act, and there is no hint of any intention that there be an exemption for s 88AF machines in the initial allocations. 40 In his Second Reading Speech on the introduction of the Gaming Machines Bill (Hansard, Legislative Assembly, 30 November 2001), the then Minister for Gaming and Racing, Mr Face said (at p 19275): The key features of the transferable entitlement scheme are as follows. Poker machine entitlements will be issued for all poker machines which clubs and hotels are entitled to keep as at the date of the relevant freeze - which is 28 March 2000 for clubs and 19 April 2001 for hotels.

41 This identifies the commencement of the freeze - not the commencement of the new Act - as the relevant date, and would exclude s 88AF machines. After referring to the new hardship scheme for hotels, the Minister continued:

As I said earlier, clubs have been able to apply for additional machines under hardship provisions that formed part of the club gaming machine freeze which took effect on 28 March 2000. There are still outstanding hardship applications that have been lodged under the present legislation, and new applications continue to be submitted each week.

The current hardship provisions have not been interpreted as strictly as intended, and some 1,600 additional gaming machines have been granted to clubs since the freeze commenced

Hardship entitlements granted to both clubs and hotels will not be transferable for a period of three years after the date that the entitlements were granted. If a club or hotel wishes to sell any of its standard poker machine entitlements within that three-year period, it will be required to forfeit its hardship entitlement first. The Board will not be permitted to allocate hardship entitlements unless there are sufficient forfeited entitlements in the relevant pool. 42 Although, like the Explanatory Memorandum, this is far from decisive, it suggests that the restrictions applicable to hardship machines were to be of general application. There is nothing in the Explanatory Memorandum, or in the Second Reading Speech, to suggest that s 88AF hardship machines were to be added to the machines which a club was authorised to keep at the commencement of the freeze for the purpose of calculating the number of poker machine entitlements to be issued to a club. To the contrary, the flavour of both the Explanatory Memorandum and the Second Reading Speech was that entitlements were to issue in respect of machines that a club was entitled to keep at the commencement of the freeze, and that entitlements were to be issued in respect of hardship machines only after the expiry of the three-year period. Judicial Authority 43 The topic is not without some judicial authority. In Rooty Hill, Basten JA - with whose judgment Santow JA concurred, as did, with an immaterial exception, Bryson JA - said (at [18]): Section 18 imposes constraints on the obligation to allocate entitlements pursuant to s 15(1)(b): ... . 44 At [23], his Honour said: However, whether s 31 has any relevance to the Appellant is a matter which need not be determined for present purposes. It may be assumed, in the Appellant's favour, that one poker machine entitlement has been allocated by the Board for each of the 120 additional machines authorised under s 88AF. However, for that to have occurred the Board must have been satisfied not merely that keeping the machines was authorised under s 88AF but that, for the purposes of s 18(2), the keeping of the machine has been authorised by the Board under Part 5.

45 Although that passage refers to s 18(2) and not s 18(3), it is demonstrative of the view that s 15 is subject to the restrictions imposed by s 18. Further, at [25], his Honour said: Further, s 18(3) - set out at [18] above - required that no entitlements could be allocated in relation to a hardship gaming machine until three years after it had been approved. In relation to the Appellant's hardship machines, entitlements were presumably not allocated until a date after 30 August 2003. This may explain why the records of the Board, referred to by the Appellant's solicitors, originally recorded allocations only in relation to the pre-28 March 2000 machines.

46 Finally, at [46], his Honour said: However, it seems clear, and the contrary was not suggested, that s 15(1) is subject to s 18. That provision prevented an entitlement to be allocated until after the periods of three years from the date on which the authorisation was given: s 18(3).

47 These passages manifest a view that the restrictions in s 18 apply to an initial allocation under s 15. Both senior counsel who appeared before me were counsel in Rooty Hill, and both agreed that the present issue was not argued in Rooty Hill, and that the observations of Basten JA to which I have referred were obiter. Nonetheless, given that they are repeated, consistent and plainly considered observations, and that they share the concurrence of the other two members of the Court of Appeal, I must regard them as of some considerable persuasive force. Resolution 48 Ultimately, I do not think that it is possible to reconcile s 15 and s 18. The later prohibits what the earlier commands. In those circumstances, resolution of the conflict between them involves a search for the dominant intention in the Act, rather than an attempt to accommodate the operation of each of the sections to the other. In searching for that dominant intention, the extrinsic material to which I have referred favours the view that s 18 should prevail. So does the authority of the Court of Appeal's judgment in Rooty Hill. 49 But even without those aids, and examining the Act alone, I would have reached the same conclusion. First and foremost, s 29 evinces a clear indication that Parliament intended that s 88AF hardship machines be dealt with under the new legislation as if they were the subject of hardship gaming machine approvals under that legislation, rather than as if they were the subject of poker machine entitlements. 50 Secondly, policy considerations favour the same conclusion. The policy of the legislation was to freeze the number of poker machines as at March 2000, but to provide for a limited exception for hardship. There is nothing to suggest that, having imposed a freeze with effect from March 2000, subject only to an exception for hardship machines, Parliament intended to increase the threshold from the level of the original freeze to the level produced by adding, to the number of poker machines authorised at the inception of the freeze, the hardship machines, many if not most of which were approved for a limited time. To do so would be contrary to the scheme of imposing a freeze and then using that freeze as a starting point for the new legislation. It would, by a sidewind, convert s 88AF hardship machines into standard entitlements. There is nothing in the extrinsic material affirmatively to suggest that there was any such intention, and on an overview, that result would seem inconsistent with the scheme of the legislation. 51 Thirdly, as is said in Pearce and Geddes, Statutory Interpretation in Australia, 4th ed: [4.25] As a rule of last resort, when it is not possible to reconcile two sections in an Act, the later section prevails over the earlier: Wood v Riley (1867) LR 3 CP 26; Mt Isa Mines Ltd v FCT (1976) 10 ALR 629 at 639; Ross v R (1979) 25 ALR 137 at 145; Lyons v Registrar of Trade Marks (1983) 50 ALR 496 at 508. 52 Though a rule of last resort, this is a case in which it is not possible to reconcile the two sections, and this rule would support the conclusion which I have otherwise reached, namely that s 18 (the later section) prevails over s 15 (the earlier). 53 Fourthly, it is a general rule of construction that the specific prevails over the general. Section 15(5)(b) deals with any increase in the number of poker machines authorised to be kept in club premises after the inception of the freeze; it is not limited in its terms to s 88AF hardship machines (although as things turned out, there was no other way in which the number of machines could be increased during the relevant period). On the other hand, s 18(3) refers specifically to hardship gaming machines. Although I think it is a matter of only slight significance, s 18(3) is the more specific provision (dealing specifically with hardship gaming machines) whereas s 15(5)(b) is the more general (dealing with all increases, not just hardship machines, during the relevant period). This supports the conclusion that s 18(3) should prevail. 54 Fifthly, when there are two inconsistent provisions in an Act, of which one creates a right or entitlement and the other imposes a restriction on or attaches a proviso to it, while generally one endeavours to reconcile the proviso or restriction with the right, if they cannot be reconciled, then the proviso or restriction prevails. This too supports the view that the prohibition in s 18(3) should prevail. 55 For all those reasons, the preferable construction of the Act as a whole, is that s 18(3) prevails over s 15, so that s 15(5)(b) cannot be regarded as applying to s 88AF hardship machines; they fall to be dealt with as if they were hardship gaming machines approved under the 2001 Act, pursuant to ss 18 and 31. That means that there is no obligation on the Board under s 15 to allocate a poker machine entitlement in respect of a s 88AF hardship machine. Where a club wishes to convert a hardship gaming machine (including a s 88AF hardship machine) to a poker machine entitlement, the appropriate course is to proceed by application under s 31. 56 The certificates of 2 April 2002, properly read, do not evidence a determination by the Board to grant a poker machine entitlement under Pt 3 Div 2 in respect of the s 88AF hardship machines. In the certificates, as in the "Arrangements" document of 5 June 2002, the concept of "gaming machine entitlement" is used in a wider sense than that of a poker machine entitlement under Pt 3 Div 2; it includes, as appears from the "Arrangements" document, not only transferable poker machine entitlements under Pt 3 Div 2, but also hardship gaming machines and the other "entitlements" described in the Arrangements document. This is consistent with Gaming Machines Act, s 31A, which refers to gaming machine entitlements other than poker machine entitlements. It is the sum of different types of gaming machine entitlements - one only of which is poker machine entitlements - that provides the total number of approved gaming machines the Board may authorise to be kept on any premises of a club, under s 56(5). 57 It follows that, in my view, the Board was and is not obliged to allocate poker machine entitlements in respect of the Clubs' s 88AF hardship machines; that it has not done so; and that the Clubs are not entitled to insist that it do so. If they wish to have hardship machines converted to tradeable entitlements, they should proceed under s 31. 58 I therefore order that the summons in each matter be dismissed with costs. **********

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