Matthew Harvey: The High Court on Commercial Law 2016 (Part One)

14 December 2016

Matthew Harvey: The High Court on Commercial Law 2016 (Part One)

Originally published as part of Matthew Harvey's The Talk Around Chambers.

Tabcorp Holdings Ltd v Victoria [2016] HCA 4

Statutory construction – Text and context – Whether “grant of new licences” read narrowly or widely

Under the Gaming and Betting Act 1994 (Vic), Tabcorp was given a wagering licence and a gaming licence for 18 years.  This Act contained a terminal payment provision.  It said that, if Tabcorp’s licences were not renewed, then on the “grant of new licences” Tabcorp would be entitled to the lesser of the value of the former licences or the premium paid for the new licences.

In 2003, legislation regulating the gambling industry was consolidated into the Gambling Regulation Act 2003 (Vic).  The terminal payment provision was re-enacted in s 4.3.12(1) of the 2003 Act.  In 2008 and 2009, the gaming industry was restructured, again.  Consequently, Tabcorp’s licence was not to be renewed after it expired in 2012.  The licensing for conducting gaming operations also changed to “gaming machine entitlements” (GMEs).  Tabcorp claimed entitlement to the terminal payment under s 4.3.12(1).  Was there a “grant of new licences” within the meaning of s 4.3.12(1), which entitled Tabcorp to the payment?

Held:  The phrase “grant of new licences” in s 4.3.12(1) meant the grant of a new wagering and gaming licences under the 2003 Act.  The plain meaning of the section, its context, legislative history and commercial context supported this conclusion.  Since the GMEs were a different type of licence under a different Act, Tabcorp was not entitled to the terminal payment.  See French CJ, Kiefel, Bell, Keane and Gordon JJ at [53], [77], [86] and [92].

Victoria v Tatts Group Ltd 
[2016] HCA 5

Contractual construction – Text and context – Whether “new gaming operator’s licence” read narrowly or widely

The facts in Tabcorp Holdings v Victoria (above) are relevant to the facts in this case.  Here, Tatts was the holder of a gambling licence in Victoria under the Gaming Machine Control Act 1991.  In 2012, its licence expired.  Tatts claimed it was entitled to a terminal payment under an agreement it entered into with the State.  Clause 7.1 of the agreement provided that, if Tatts’ licences expired without a “new gaming operator’s licence” being granted to it, Tatts would be entitled to a payment equal to the lesser of the value of the licence or the premium paid by the new licensee.  Upon the expiry of Tatts’ licence, the State issued GMEs.  Was Tatts entitled to a terminal payment under cl 7.1 of the agreement?

Held:  The phrase “new gaming operator’s licence” in cl 7.1 meant a gaming operator’s licence under the 1991 Act.  It did not have a generic meaning capable of covering any statutory licence of substantially the same effect as that under the 1991 Act.  Since the GMEs were not granted under the 1991 Act, Tatts was not entitled to the terminal payment.  See French CJ, Keifel, Bell, Keane and Gordon JJ at [51].

Comment:  The Court rejected the trial judge’s and the Court of Appeal’s interpretation of cl 7.1.  This goes to show that even great minds can differ over contractual interpretation.

Moreton Bay Regional Council v Mekpine Pty Ltd 
[2016] HCA 7

Lease – Regisration of plan of subdivision – Compulsory acquisition

A lessee leased a shop in a shopping centre, with an entitlement to use common areas.  The shopping centre was within Lot 6 in a plan of subdivision.  The lease was registered under the Queensland freehold land register.

The lessor acquired land adjacent to Lot 6.  Both parcels of land were amalgamated, thus creating new Lot 1 on the plan of subdivision.  The lease was then endorsed on the new plan, which was registered.

The Council resumed a strip of vacant land from Lot 1 for road works.  It had not been part of Lot 6.  The lessee brought a claim for compensation under the relevant legislation, contending that, when the new plan of subdivision was registered, it acquired an interest in the whole of Lot 1 and, therefore, in the resumed land.  Did the lessee have an interest in the resumed land?

Held:  When the new plan of subdivision was registered, the lessee’s interest was confined to that part of Lot 1 which had been Lot 6.  Thus, the lessee was not entitled to compensation from the Council.

Fischer v Nemeske Pty Ltd 
[2016] HCA 11

Trust – Trustee – Power to advance – Whether trustee’s acknowledgment of debt was valid exercise of power to advance

Clause 4(b) of a trust deed gave a trustee power to advance or raise any part of the capital or income of the trust fund and to pay or apply the same for the advancement in life or benefit of any of the “specified beneficiaries”.  The trust fund comprised shares in a company.  The trustee purported to exercise the power to advance by acknowledging an indebtedness to two specified beneficiaries, equivalent to the value of the shares held, and by granting a charge over the trust property in favour of the two beneficiaries.  No money changed hands.  There was no immediate alteration of the beneficial ownership of trust assets.  Was there a valid exercise of the trustees’ power to advance under cl 4(b)?

Held: Read in the context of the trust deed, cl 4(b) was wide enough to permit the trustees to exercise the power to advance in this manner.  See French CJ and Bell J at [30] and Gageler J at [103].

Comment:  Here, the trial judge, the Court of Appeal (unanimously) and the High Court (by Majority) were of the same opinion.  Interestingly, French CJ and Bell J originally granted special leave to appeal.  The grant of special leave does not guarantee an appellant success.

Coverdale v West Coast Council 
[2016] HCA 15

Statutory construction – Meaning of “land” – Whether council could levy rates as to seabed

The Council sought to levy rates on eight marine farming leases over parts of the seabed of Macquarie Harbour.  It requested the Valuer-General to value the leases.  Section 11 of the Valuation of Land Act 2001 (Tas) said that the Valuer-General must value lands, “including any Crown lands” that are liable to rated under the Local Government Act 2001 (Tas).  “Crown land” under the Crown Lands Act 1976 (Tas) included land covered by the sea.  Was “including any Crown lands” to be read restrictively by the ordinary signification of “land” (so as to exclude the seabed) or was it to be given the wide meaning under the Crown Lands Act?

Held:  The question whether the seabed was land, under the legislation, was to be resolved by regard to the text of the statute as a whole, its subject, scope and purpose, and against the legislative history and antecedent circumstances.  Applying this method, “Crown lands” in the Valuation of Land Act was to be given the same meaning in the Crown Lands Act.  Thus, “Crown land” included the seabed and was, therefore, rateable.  See French CJ, Keifel, Keane Nettle and Gordon JJ at [21] and [23].

Next edition will contain Attwells v Jackson Lalic Lawyers (advocate's immunity), Badenach v Calvert (solicitor's duty of care), Robinson Helicopter v McDermott (appeals - finding of fact), Crown Melbourne v Cosmopolitan (collateral contract and promissory estoppel), and Paciocco v ANZ Banking Group (penalties).

To brief Matthew or to subscribe to The Talk Around Chambers please contact Tammy Young on +61 3 9225 6777 or after hours on +61 (0)414 523 515.

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