ROOTY HILL RSL CLUB LTD v LIQUOR ADMINISTRATION BOARD OF NSW

Court of Appeal (NSW)|2006-09-27|Before: Santow JA, Bryson JA, Basten JA, Johnson J

CITATION: ROOTY HILL RSL CLUB LTD v LIQUOR ADMINISTRATION BOARD OF NSW [2006] NSWCA 297 This decision has been amended. Please see the end of the judgment for a list of the amendments.

JUDGMENT OF: Santow JA at 1; Bryson JA at 2; Basten JA at 3

CATCHWORDS: GAMING - Interpretation of the Gaming Machines Act 2001 (NSW), savings/transitional clauses, Schedule 1, cl 2 and 10 - whether conditions imposed on authorisation of further gaming machines under s 88AF of the Registered Clubs Act 1976 (NSW) apply under the Gaming Machines Act

Gaming Machines Act 2001 (NSW), ss 4, 7, 14, 15, 15A, 18, 28, 29, 31, 31A, 56, 58, 213, Schedule 1, cl 2, cl 10 LEGISLATION CITED: Interpretation Act 1987 (NSW), ss 30, 33 Registered Clubs Act 1976 (NSW), ss 77, 78, 78A, 88AD, 88AE, 88AF, Parts 10, 10B

CASES CITED: Friends of Hinchinbrook Society Inc v Minister for Environment (No. 2) (1997) 69 FCR 28 The Ombudsman v Laughton (2005) 64 NSWLR 114

PARTIES: Rooty Hill RSL Club Limited - Appellant Liquor Administration Board of New South Wales - Respondent

COUNSEL: D. Higgs SC/R. Bromwich - Appellant M. Leeming - Respondent

SOLICITORS: Thomson Playford - Appellant I V Knight, Crown Solicitor - Respondent

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT DATE OF DECISION: 10 November 2005

LOWER COURT MEDIUM NEUTRAL CITATION: Rooty Hills RSL Club Limited v Liquor Administration Board of New South Wales [2005] NSWSC 1140

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40939/05 SC 30103/04

SANTOW JA BRYSON JA BASTEN JA

2 November 2006 ROOTY HILL RSL CLUB LTD v LIQUOR ADMINISTRATION BOARD OF NEW SOUTH WALES In 28 March 2000, the Appellant, Rooty Hills RSL Club Ltd, had authority to keep 656 gaming machines on its premises. It obtained authorisation from the Liquor Administration Board ('the Board') on 30 August 2000 for a further 120 machines pursuant to a 'hardship application' under s 88AF of the Registered Clubs Act 1976 (NSW) as then in force. A condition of the approval was that it be reviewed in three years time. On April 2002, the Gaming Machines Act 2001 (NSW) commenced which became the new statutory regime under which gaming machines were kept. After the commencement of the Act, the Board sought to carry out the review. The Appellant challenged the power of the Board to carry out the review. Johnson J dismissed the summons and the Appellant appealed from that decision.

The issue to be determined in the Court of Appeal was: whether the condition imposed on the authorisation of further gaming machines under s 88AF of the Registered Clubs Act can be taken to be a condition imposed by or under the Gaming Machines Act pursuant to Schedule 1 clause 2(3), having regard to clause 10.

There is no principle of statutory construction upon which it could be established that the general saving provision of Schedule 1, clause 10 of the Gaming Machine Act operated to limit the specific operation of cl 2 in relation to a relevant existing gaming machine approval or authorisation: at [42].

There is nothing in either clause which expressly subordinates one to the other. The clear purpose of cl 2 is to make provision with respect to gaming machine authorisations granted under the repealed legislation. It does so by importing both the authority and the conditions to which it is subject, into the new legislative regime. That object is not promoted by reading the clause down by reference to a general savings provision and should not be interpreted so in accordance with s 33 of the Interpretation Act 1987 (NSW). This conforms with the common sense principle of construction that provisions of general application give way to specific provisions having a different effect: at [43]. The Ombudsman v Laughton (2005) 64 NSWLR 114, applied.

When clause 2 of Schedule 1 speaks of an existing gaming machine authorisation "in force immediately before the repeal of the provision" under which it was granted, and speaks of the conditions to which the authorisation "is subject", it is speaking of the authorisation and the conditions immediately prior to the repeal. At that point in time, the authorisation and the conditions derived their force and effect from the previous legislative regime, and valid acts done pursuant to it. The Appellant does not challenge the validity of the conditions as they existed under the old Act. That being so, the authorisation and the conditions are now "taken to be" an authorisation subject to conditions, under the Gaming Machines Act. They obtain their legal effect from the moment of repeal, by virtue of cl 2: at [44].

The new regime of 'poker machine entitlements' and the power of the board to revoke an authorisation to keep approved machines are interrelated and cumulative in their operation. the Gaming Machines Act envisages that a poker machine entitlement may exist separately from a Part 5 authorisation to keep the machine. although the authorisation must be in force at the time the entitlement is allocated, once allocated, the authorisation could be cancelled or withdrawn without affecting the entitlement: at [47].

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40939/05 SC 30103/04

SANTOW JA BRYSON JA BASTEN JA

2 November 2006 ROOTY HILL RSL CLUB LTD v LIQUOR ADMINISTRATION BOARD OF NEW SOUTH WALES Judgment 1 SANTOW JA: I agree with Basten JA. 2 BRYSON JA: I agree with the orders proposed by Basten JA. I also agree with his Honour's reasons, except in one respect which cannot affect the outcome. I do not join in the rejection at para [39] of the contention referred to in para [38]. I do not see why Sch 1 cl.10 does not mean that when s.28(1AA) came into effect the imposition of a condition under s.88AF was taken to have been done under s.28(1AA). They are corresponding provisions. I do not see why the time interval prevents this result. Nothing turns on this because the condition took effect for other reasons, as Basten JA has shown. 3 BASTEN JA: The statutory regime pursuant to which gaming machines can be kept in hotels and registered clubs in New South Wales has changed significantly on two occasions in recent years. The first change involved a "freeze" on the maximum number of approved gaming advices that a registered club might keep, the number being restricted to those it was authorised to keep on 28 March 2000. That occurred by the insertion of new Part 10B into the Registered Clubs Act 1976 (NSW). An exception was provided for a club which could establish a serious threat to its financial viability if authority were not given for a further number of approved gaming devices. 4 As at 28 March 2000, the Appellant, Rooty Hills RSL Club Ltd, had authority to keep 656 gaming machines on its premises. However, it sought to avail itself of the exception and obtained authorisation on 30 August 2000 for a further 120 machines. A condition of that approval was that it be reviewed in three years time. 5 On 2 April 2002, further significant legislative changes were made to the regime under which gaming machines were kept. Thereafter, the regime was to be found in a new statute, being the Gaming Machines Act 2001 (NSW). After the commencement of that Act, the Liquor Administration Board, which had granted the approval for the additional machines, sought to carry out the review upon which the approval was conditioned. The Appellant challenged the power of the Board to carry out the review. Its claim, shortly put, was that its authority to keep the additional machines survived the enactment of the Gaming Machines Act, but that the condition did not. Its claim was dismissed by Johnson J: see Rooty Hill RSL Club Ltd v Liquor Administration Board (NSW) [2005] NSWSC 1140. This appeal is brought from the order made by his Honour dismissing the summons before him, with costs.

Statutory regime 6 The precursor to the current regime for authorising the keeping and operation of poker machines on premises of a registered club commenced in 1986, with the insertion of Part 10 into the Registered Clubs Act. The scheme operated by way of a statutory dispensation from the general prohibitions contained in the Lotteries and Art Unions Act 1901 (NSW) and the Gaming and Betting Act 1912 (NSW), the latter Act being replaced by the Unlawful Gambling Act 1998 (NSW). The dispensation, contained in s 77 of the Registered Clubs Act, was only engaged "if the poker machine is kept and operated … in accordance with this Act": s 77(1). The regime of strict control was maintained by s 78 which provided: 78 Keeping, acquisition and disposal of poker machine A registered club shall not: (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. Maximum penalty: 100 penalty units. 7 By 2000, the Registered Clubs Act contained a provision relating to the grant of authority to keep a poker machine, which 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 … . 8 The "freeze" on new authorisations was effected by the introduction of a new Part 10B into the Registered Clubs Act by the Gambling Legislation Amendment (Gaming Machine Restrictions) Act 2000 (NSW). The Act commenced on assent, namely 9 May 2000. The freeze was identified in s 88AD in the following terms: 88AD Duration of freeze (1) This Part applies during the period: (a) commencing at 12pm on 28 March 2000, and (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. 9 The operative provision of Part 10B read as follows: 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. 10 The relevant qualification to the cap imposed by s 88AE(1) was to be found in the following section which, so far as relevant, read as follows: 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. (2) The applicant is required to establish such a serious threat to its financial viability to the satisfaction of … the Board … . (3) The … Board may take into account any submission by the applicant for the purposes of this section, including with respect to building works: (a) that were commenced or recently completed, or for which contractual arrangements had been made, at the beginning of the period of the freeze, and (d) that were only undertaken because of the expectation of funding to be provided by the keeping of additional approved gaming 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. 11 As noted above, the Board did grant approval, the terms of which were set out in a letter to the Appellant's lawyers, dated 30 August 2000. The letter relevantly read as follows: " Re: Rooty Hill RSL Club Ltd - Application under section 88AF of the Registered Clubs Act 1976 … The Board has determined that the Club has established that its financial viability will be seriously threatened if it is unable to obtain additional gaming devices during the freeze. The Board has determined to allow an increase of 120 additional gaming devices subject to the following conditions: 1. any subsequent redevelopment or refurbishment by the Club must be capable of being funded from the Club's existing income stream (including the 120 new devices), and 2. any approval to be reviewed in three years time." 12 It would appear from the terms of this letter that this approval did not constitute an authority under s 78A of the Registered Clubs Act. The parties appear to have assumed that such an authority was given, as s 78A required an instrument which identified the individual machines. Although that authority was not in evidence, both parties were content to assume that it existed. 13 On 2 April 2002 the Gaming Machines Act commenced and, pursuant to s 213, the Registered Clubs Act was amended to omit, amongst other provisions, the whole of Parts 10 and 10B. 14 The "freeze" on the grant of new authorisations imposed by s 88AD of the Registered Clubs Act was not ended by proclamation as provided for in that section, before the section was repealed. However, the scheme of the Gaming Machines Act was to continue the freeze indefinitely. Thus the Minister, in his Second Reading Speech on the Gaming Machines Bill stated (Hansard, Legislative Assembly, 30 November 2001, p 19275): "Under the proposed legislation, the previous automatic entitlement of clubs and hotels to install gaming machines will be abolished. The current numbers of gaming machines will be frozen, and the only way that clubs and hotels will generally be able to acquire additional machines in future will be to purchase the right to keep those machines from other premises."

As a matter detail, there were inaccuracies in this brief summary, but they do not affect the general conclusion that the freeze was to continue, now indefinitely. Indeed, in relation to large-scale clubs such as the Appellant, there was a requirement that the number of poker machine entitlements be reduced by 10% or by a number which would result in the entitlements not exceeding 450, over a five year period ending on 2 April 2007: Gaming Machines Act , s 15A. 15 Generally speaking, the Gaming Machines Act replaced the provisions previously found in the Registered Clubs Act. Thus, the dispensation from the prohibitions on keeping gaming machines, found in s 77 of the Registered Clubs Act, is now to be found in s 7 of the Gaming Machines Act in substantially the same language. Similarly, the power of the Board to authorise a club to keep or dispose of a gaming machine, previously found in s 78A of the Registered Clubs Act, is now found in s 56 of the Gaming Machines Act. Thirdly, and relevantly for present purposes, the exception to the freeze contained in s 88AF of the Registered Clubs Act is now to be found in ss 28 and 29 of the Gaming Machines Act. (It will be necessary to consider the terms of these provisions further below.) 16 The most significant novel feature of the Gaming Machines Act was the introduction of a "tradeable poker machine entitlement scheme", that being the heading of Part 3, Division 2 of the Act. The manner in which this scheme worked was of some importance in the argument for the Appellant. 17 It is convenient to commence with s 15, which provides for the initial allocation of poker machine entitlements. Thus, so far as relevant to the Appellant, s 15 provides: 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. 18 Section 18 imposes constraints on the obligation to allocate entitlements pursuant to s 15(1)(b): 18 General restrictions on allocation of poker machine entitlements … (2) A poker machine entitlement cannot be allocated in relation to an approved gaming machine unless the keeping of the approved gaming machine is authorised by the Board under Part 5. (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. 19 These provisions involve numerous defined terms, of which three are significant. First, the term "approved gaming machine" differs from the language of the Registered Clubs Act, which referred to an "approved gaming device". In each case, the phrase relevantly included an "approved poker machine", the reference to approval relating to the nature of the machine and not the premises or the owner. Secondly, the Gaming Machines Act contains a definition of "hardship gaming machine" which includes an approved gaming machine authorised to be kept in a registered club pursuant to s 88AF of the Registered Clubs Act: see Gaming Machines Act, s 29(3) and (5). Thirdly, there is now a definition of "keep" in relation to an approved gaming machine, which includes "acquire or possess the gaming machine": s 4. 20 Ultimately, it will be seen that the Appellant's case turns upon the savings and transitional provisions introduced consequent upon the enactment of the Gaming Machines Act. Relevantly for present purposes, three provisions need to be addressed. First, and most importantly, Schedule 1, cl 2 provides: 2 Preservation of existing gaming machine approvals and authorisations (1) In this clause: existing gaming machine approval or authorisation means any approval or authorisation in respect of a poker machine or approved amusement device: (a) granted under a provision of the Liquor Act 1982 or the Registered Clubs Act 1976 repealed by this Act, and (b) in force immediately before the repeal of the provision. (2) An existing gaming machine approval or authorisation is, subject to this Act and the regulations, taken to be an approval or authorisation in force under this Act. (3) The conditions to which an existing gaming machine approval or authorisation is subject are, subject to the regulations, taken to be conditions imposed by or under this Act and may be revoked or varied in accordance with this Act. 21 It was the Appellant's case (not disputed by the Board) that all of the 776 approved gaming machines, authorised by the Board under the Registered Clubs Act, which number included the 120 additional machines authorised pursuant to s 88AF, were at the date the proceedings commenced the subject of one poker machine entitlement each, allocated by the Board pursuant to s 15 of the Gaming Machines Act, the allocation being confirmed by letter dated 27 August 2004. 22 Recalling that the Gaming Machines Act commenced on 2 April 2002, it is not clear when the allocations were in fact made. The request for confirmation of the allocation appears to have post-dated correspondence with respect to the proposed review. So far as the evidence reveals, the first communication between the Board and the Appellant (or its solicitors) following the commencement of the Gaming Machines Act, was a letter of 22 August 2003 from the Board advising that the Board intended to carry out a review of the approval of the 120 additional gaming machines, pursuant to the condition of that approval. On 5 November 2003 the solicitors for the Appellant responded, challenging the power of the Board to carry out such a review. That response led the Board to seek legal advice, which apparently took some little time to obtain. On 15 July 2004 the Board replied to the solicitors for the Appellant, rejecting their arguments and asserting the Board's power to carry out the review, pursuant to the condition to which the authority was subject. On 21 July 2004 the solicitors for the Appellant wrote to the Board, referring to an understanding that "the Board's records indicate that the 'frozen number' of approved poker machines for the Club under s 15 of the GMA is 656, and that this is also recorded as the number of poker machine entitlements allocated to the Club". The solicitors argued that the correct number should be 776, as including the 120 additional machines. In reply, the Board confirmed in its letter of 27 August 2004 that 776 entitlements had been allocated, but noted that there were "a number of anomalies in the legislation". The letter continued: "Accordingly, I draw your attention to section 31(4) of the Gaming Machines Act 2001 should that section become applicable." 23 This last reference was obscure. 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 had been authorised by the Board under Part 5. As noted above, the authorisation required under s 56 had its equivalent in the authority granted pursuant to s 78A of the Registered Clubs Act. For reasons already noted, there were two different forms of authority required for these machines under the Registered Clubs Act: so there must be two separate authorities for hardship gaming machines kept under the Gaming Machines Act. That point is confirmed by s 14 which provides: 14 General provisions (1) The allocation of poker machine entitlements and the approval to keep hardship gaming machines under this Part: (a) are subject to the overall State cap, and (b) do not affect the requirement under Part 5 for the Board's authorisation to keep approved gaming machines in a … registered club.

(2) Accordingly, the Board cannot allocate a poker machine entitlement or approve the keeping of a hardship gaming machine if the allocation or approval would: (a) result in the overall State cap being breached, or (b) exceed the total number of approved gaming machines authorised under Part 5 to be kept in the … registered club concerned. 24 These conclusions have relevance to the operation of Schedule 1, cl 2. To give effect to the transparent intention that there be continuity between the old legislative regime and the new, cl 2(2) must apply to both the authority given under s 78A of the Registered Clubs Act and the authority given under s 88AF of that Act. Each must be treated as an "authorisation" for the purposes of cl 2(2). 25 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.

Challenge to review 26 Against this general background, it is convenient to note the trigger for the present dispute. As noted above, the proposal to conduct a review was set out in a letter to the Secretary of the Appellant, dated 22 August 2003. That letter commenced with a reference to the letter conveying the approval for the hardship machines (of 30 August 2000) and set out condition 2 attaching to the approval, requiring review in three years time. The letter further noted that, following the repeal of s 88AF of the Registered Clubs Act, the approval was now taken to have been given under the Gaming Machines Act. The letter continued: "Accordingly, to satisfy the Board that the Club should retain the 120 additional gaming machines, the Club will have to address the test in section 28(1) of the Gaming Machines Act 2001."

The Appellant responded on 5 November 2003, setting out legal reasons why the Board had no power to undertake the review. The arguments set out need not be repeated here, but they largely reflect the submissions summarised by Johnson J in the judgment below at [35]-[52]. 27 The letter in response from the Board, dated 15 July 2004, rejected the challenge to its power and concluded: "Accordingly, I confirm my request in my letter dated 22 August 2003 to the Club's Secretary that, to satisfy the Board that the Club should retain the 120 additional gaming machines, the Club will have to address the test in section 28(1) of the Gaming Machines Act 2001." 28 Although subsequent correspondence suggests that the Appellant set about preparing the necessary submissions, on 21 October 2004 it commenced proceedings in the Supreme Court challenging the power of the Board to carry out the proposed review. The primary relief sought was a declaration in the following terms: "(a) the Defendant does not have any power under the Gaming Machines Act 2001 to review the grant to the plaintiff of 120 hardship gaming machines previously authorised on 29 August 2000 under section 88AF of the Registered Clubs Act 1976; and/or (b) the Defendant has no power under the Gaming Machines Act 2001 to reduce the number of hardship gaming machines previously authorised in favour of the plaintiff on 29 August 2000 under section 88AF of the Registered Clubs Act 1976."

An injunction was sought restraining the defendant from exercising any such purported power.

Appellant's claims 29 The first question raised by this challenge was why the second condition imposed on the s 88AF authorisation was not properly taken to be a condition imposed by or under the Gaming Machines Act, pursuant to cl 2(3). 30 The Appellant's contentions in this regard were twofold. First, it was said that, as a matter of construction of the condition, it should be understood as operating only during the duration of the statutory "freeze" enacted by Part 10B of the Registered Clubs Act. Although that freeze was not terminated by proclamation, as s 88AF contemplated, it was terminated by the repeal of Part 10B. Accordingly, the condition was spent upon that repeal. 31 Secondly, the Appellant argued that the purpose of the condition was also spent, as a matter of statutory construction. That conclusion flowed from the disparity between the approach to hardship machines found in s 88AF and that in ss 28 and 29 of the Gaming Machines Act. Under s 88AF, the critical concept was "a serious threat to [the] financial viability" of the club during the period of the freeze. Once the freeze had terminated, that concept lost its primacy. Section 28(1) operated by reference to a more restrictive test. 28 Hardship applications by registered clubs

(1) In making a hardship application, a registered club must establish, to the satisfaction of the Board, that: (a) the financial viability of the club will be seriously threatened if the club is not able to keep the additional approved gaming machines, and (b) the club entered into a contract before noon on 28 March 2000 for the carrying out of significant building or refurbishment work in relation to the club, and (c) the decision to enter into the contract was based on current cash flow estimates that relied on the additional approved gaming machines. 32 Thirdly, the Appellant argued that as its existing hardship gaming machines had each been allocated "one poker machine entitlement", pursuant to s 15(1), the scheme of the Gaming Machines Act was inconsistent with those entitlements now being withdrawn or otherwise ceasing to exist, except by forfeiture pursuant to the terms of the Gaming Machines Act, none of which was relevant. 33 Fourthly, the Appellant argued that the conditions could not be picked up by the transitional provisions in any event, because cl 10 of Schedule 1 required that there be a "corresponding provision" in the Gaming Machines Act, which must mean relevantly a provision permitting authorisation of additional machines subject to conditions. Clause 10 provided: 10 General saving

Anything done under a provision of … the Registered Clubs Act 1976 (being a provision repealed by this Act) that had any force or effect immediately before its repeal is, to the extent that it could have been done under the corresponding provision of this Act, taken to have been done under this Act, subject to any express or implied provision to the contrary in this Act or the regulations made under this Act. 34 At the time at which the authorisations were picked up by cl 2(2), there was no such provision: the power to approve a hardship application subject to conditions was only conferred on the Board with the introduction of sub-s 29(1AA), which commenced on 1 January 2003. Section 29, as originally enacted and so far as relevant, read as follows: 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. (5) In this section: 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). 35 Section 29 now contains three additional subsections (1AA), (1A) and (1B): however, only the first is relevant to a registered club. It was inserted by the Gaming Machines Further Amendment Act 2002 (NSW) and reads as follows: (1AA) The Board's approval under this section is subject to such conditions as may be imposed by the Board in relation to the keeping of hardship gaming machines by the … registered club concerned. 36 There is clearly an interrelationship between the first three submissions put forward by the Appellant. As will be seen below, each ultimately depends upon the effect given to cl 2(3) of Schedule 1. This last argument relied upon both the terms of cl 10 itself, and its relationship to cl 2 in Schedule 1. However, as cl 10 is relied upon as a constraint on the operation of cl 2(3), it is convenient to deal first with the fourth submission.

The savings and transitional provisions 37 The fourth submission has some risks for the Appellant: if there were no power under the Gaming Machines Act to grant an authorisation to keep hardship machines subject to conditions, it would be necessary to consider whether the argument based on cl 10 resulted not merely in the failure of the condition to survive the repeal of the Registered Clubs Act, but whether the conditional authorisation failed to survive. 38 Putting that possibility to one side, the Board argued that whether or not there was a corresponding provision of the kind insisted upon by the Appellant upon the commencement of the Gaming Machines Act, there was a power to authorise hardship machines, subject to conditions, as from 1 January 2003 when sub-s 29(1AA) commenced and the condition could now be given effect as a condition imposed under the Gaming Machines Act. That, it was said, created no anomaly, because condition 2 had no effect until three years after the grant of the authorisation, namely August 2003, a time well after the commencement of sub-s 29(1AA). 39 This contention is unattractive. Whether a condition is continued under the new legislative regime should not depend, at least in a temporal sense, on the content of the condition. Unless s 28(1AA) operated retrospectively, there must have been a period in which all conditions imposed on hardship authorisations were in some kind of legislative limbo. That would appear to be inconsistent with the statutory intention of a savings and transitional provision of general operation and should not be accepted. 40 The Appellant's contention assumed that, absent sub-s 29(1AA), the power conferred on the Board to refuse or approve a hardship application, pursuant to sub-s 29(1), did not permit the imposition of conditions. Whether or not that assumption is correct would need to be tested against the approach identified by Sackville J in Friends of Hinchinbrook Society Inc v Minister for Environment (No. 2) (1997) 69 FCR 28 at 69-70. It is ultimately a question of statutory construction. In any event, the assumption should be accepted for the purposes of the present argument, because it was not challenged by the Board. Indeed, the Appellant sought to derive support from the express terms of s 31(4), imposing a constraint on the allocation of poker machine entitlements in relation to hardship gaming machines. That subsection provides: 31(4) The Board is not to allocate a poker machine entitlement in relation to a hardship gaming machine unless the Board is satisfied that the conditions (if any) applying to the Board's approval of the keeping of the hardship gaming machine have been complied with.

Counsel pointed out that this provision was only incorporated in to the Gaming Machines Act at the same time as sub-s 29(1AA), giving some support to the assumption that no power to approve subject to conditions should be implied. 41 There is further support for this assumption to be derived from the express terms of s 88AF(5), paragraph (c) of which entitled the Board to grant authority for additional gaming machines "subject to any other condition that … the Board considers appropriate". The fact that such an express provision was not transferred to the new legislative regime, when enacted, suggests that Parliament initially either thought it unnecessary or inappropriate, under the new regime. 42 Ultimately, all these questions as to the effect and operation of cl 10 will be beside the point unless the Appellant can establish that this general saving provision operated to limit the specific operation of cl 2 in relation to a relevant "existing gaming machine approval or authorisation". There is no principle of statutory construction upon which this result could be achieved. 43 First, there is nothing in either clause which expressly subordinates one to the other. Secondly, pursuant to s 33 of the Interpretation Act 1987 (NSW) a construction which would promote the purpose or object of the Schedule must be preferred to a construction which would not have that effect. The clear purpose of cl 2 is to make provision with respect to gaming machine authorisations granted under the repealed legislation. It does so, understandably, by importing both the authority and the conditions to which it is subject, into the new legislative regime. That object is not promoted by reading the clause down by reference to a general savings provision. Similarly, cl 10 coming at the end of Part 2 of the Schedule and being entitled "General saving" serves the clear purpose of addressing those things which have been done under the previous legislation, the status of which is not otherwise provided for, except by reliance on s 30 of the Interpretation Act. Thirdly, all of this conforms with the common sense principle of construction that provisions of general application give way to specific provisions having a different effect: see Pearce and Geddes, Statutory Interpretation in Australia (6th ed) at [4.32]; and see The Ombudsman v Laughton (2005) 64 NSWLR 114 at [18]-[21] (Spigelman CJ). 44 It follows that cl 2 of Schedule 1 must be given effect according to its terms. When the clause speaks of an existing gaming machine authorisation "in force immediately before the repeal of the provision" under which it was granted, and speaks of the conditions to which the authorisation "is subject", it is speaking of the authorisation and the conditions immediately prior to the repeal. At that point in time, the authorisation and the conditions derived their force and effect from the previous legislative regime, and valid acts done pursuant to it. The Appellant does not challenge the validity of the conditions as they existed under the old Act. That being so, the authorisation and the conditions are now "taken to be" an authorisation subject to conditions, under the Gaming Machines Act. They obtain their legal effect from the moment of repeal, by virtue of cl 2.

The new regime of poker machine entitlements 45 The Appellant argued that the last conclusion should be read down by implication derived from changes to the legislative regime. It said that the new regime of poker machine entitlements is inconsistent with a power in the Board to revoke an authorisation which permits the Appellant to keep a hardship gaming machine. It pointed out that an entitlement can be traded and forfeited, but not withdrawn or revoked on the basis that the relevant hardship no longer exists, which is the anticipated outcome of the review pursuant to the condition to which the authorisation is subject. There are, however, two flaws in this argument. 46 The first flaw in the argument is that it can only operate from the moment at which an entitlement is issued in relation to a hardship gaming machine. True it is that the hardship machines formed part of the "frozen number" for which entitlements were allocated pursuant to s 15(1)(b). However, it seems clear, and the contrary was not suggested, that s 15(1) is subject to s 18. That provision prevented an entitlement being allocated until after the period of three years from the date on which the authorisation was given: s 18(3). In relation to the Appellant's machines, the entitlement could not have been allocated until after 30 August 2003. Accordingly, there was a period of more than a year from the date of commencement of the Gaming Machines Act, when there was no allocated entitlement, and therefore no actual inconsistency. Thus it was the allocation of the entitlement, not the legislative regime as such, on which the Appellant had to rely. 47 The second difficulty is that the Gaming Machines Act expressly states, in s 14, that neither the allocation of a poker machine entitlement nor an approval to keep a hardship gaming machine will "affect" the requirement under Part 5 for an authorisation to keep the approved machine: s 14(1)(b) at [23] above. In other words, the two regimes are interrelated but cumulative in their operation. They are interrelated because, pursuant to s 18(2), an entitlement cannot be allocated unless the keeping of the machine is authorised under Part 5. They are cumulative in that an authorisation under Part 5 may be conditional and will not be effective unless the conditions are complied with: s 56(1) and (6). The failure to comply with the conditions of the authorisation will not have any effect on a previously allocated poker machine entitlement. For example, s 58, which provides for the cancellation of authorisations, says nothing about poker machine entitlements. Section 31A, which does deal with forfeiture in certain circumstances, adopts the concept of a "gaming machine entitlement" which is expressly defined to exclude a poker machine entitlement: s 31A(4). The Gaming Machines Act therefore envisages that a poker machine entitlement may exist separately from a Part 5 authorisation to keep the machine. Although the authorisation must be in force at the time the entitlement is allocated, once allocated, the authorisation could be cancelled or withdrawn without affecting the entitlement. The Appellant's contention to the contrary must fail.

Construction of condition 48 There remains the argument that, on its proper construction, the condition no longer operates. That is said to follow not from any express words in the condition (because there are none) but by implication from the fact that its purpose is to determine whether the financial viability of the Club continues to be seriously threatened, absent the additional gaming machine revenue, after the three years has expired. Because of the change in the legislative regime, it is said that the "freeze" with its accompanying exception, is no longer relevant. The condition should be understood as only applying for so long as the statutory freeze imposed under Part 10B continued. 49 This argument may be seen as no more than another way of relying on the repeal of the former statutory regime. It fails for the reasons already explained. For example, the condition is part of the authority: it was a conditional authority. Condition and authority must stand or fall together. The authority stands because cl 2(2) so provides. The condition stands because cl 2(3) says it does. The contrary argument gains no separate or different force from being formulated in terms of the construction of the instrument.

Conclusions 50 These reasons have been formulated without express reference to the careful and detailed exposition of the primary judge, Johnson J. That is because the grounds of appeal asserted, in a rather general way, that his Honour "failed to recognise and deal with the effect of ss 15 and 15A" of the Gaming Machines Act. The grounds assumed that the review proposed might result in the extinguishment of poker machine entitlements. Indeed, of the five particulars provided in relation to the principal ground of appeal, the first four related to the question of how the regime with respect to poker machine entitlements operated. Those arguments were misconceived, there being no support for the view that the entitlements were subject to review. 51 The fifth particular identified in the grounds of appeal complained that his Honour had erroneously relied upon the power to grant conditional approval for a hardship gaming machine, pursuant to sub-ss 29(1) and (1AA), which therefore constituted a "corresponding provision" for the purposes of cl 10 to Schedule 1. For the reasons set out above, cl 10 had no operative effect. His Honour's conclusions in that respect may be put to one side. Importantly, however, no error has been identified in his Honour's reliance upon cl 2 of Schedule 1. 52 As noted above, the declaration and injunction sought by the Appellant were directed to questions of power and did not advert to any particular conduct of the Appellant in carrying out the review pursuant to the condition. In order to carry out the review, the Board sought, by its letter of 22 August 2003, information which would address the test now contained in s 28(1) for the making of a hardship application. There was no issue raised in these proceedings that, if the Board had power to carry out the review pursuant to the condition attaching to the authorisation, any excess of power was demonstrated by seeking to apply the new test. The challenge was directed to the express statements that the review would be carried out and to the threat of reduction in numbers of hardship gaming machines implicit in the request to "satisfy the Board that the Club should retain the 120 additional gaming machines". As noted above, that should be understood as a threat to the continuing authorisation to "keep" the identified machines, and not a threat to the continued existence of any validly allocated poker machine entitlements. 53 For the reasons given above, the primary judge was correct to dismiss the summons with costs. The appeal must also be dismissed with costs. **********

02/11/2006 - Typographical error - Paragraph(s) Heading

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Lotteries and Art Unions Act 1901(NSW)

Gaming and Betting Act 1912(NSW)

Gambling Legislation Amendment (Gaming Machine Restrictions) Act 2000(NSW)

Gaming Machines Further Amendment Act 2002(NSW)

At a glance

Court

Decision date

Before

Source

Judgment (38 paragraphs)

Parties

Legislation Cited (8)

Cases Cited (3)

Cited By (2)