Victoria v Tatts Group Ltd [2016] HCA 5: Gaming Operator's Licence

Today (2 March 2016), the High Court has unanimously allowed an appeal from the Court of Appeal of the Supreme Court of Victoria in the case of Victoria v Tatts Group Ltd [2016] HCA 5.

The High Court held that Tatts Group Limited ("Tatts") was not entitled to payment by the State of Victoria ("the State") under an agreement between them because a "new gaming operator's licence" was never issued.  The appeal was heard concurrently with the appeal in Tabcorp Holdings Ltd v Victoria [2016] HCA 4.

Background to the Case

In 1992, Tatts was granted a "gaming operator's licence" under Pt 3 of the Gaming Machine Control Act 1991 (Vic) ("the 1991 Act").  That licence was to expire in 2012 and authorised Tatts to conduct gaming until that time.  In 1995, the State and Tatts entered into an agreement ("the 1995 Agreement") in which Clause 7 provided for a terminal payment to be paid to Tatts "[i]f the Gaming Operator's Licence expires without a new gaming operator's licence having issued to [Tatts]."

In 2003, multiple pieces of legislation in Victoria regulating gambling in its various forms, including the 1991 Act, were re-enacted and consolidated into the Gambling Regulation Act 2003 (Vic) ("the 2003 Act").  Tatts retained the authority to carry on gaming operations under its gaming operator's licence on substantially the same terms as under the 1991 Act.

In 2008, the Premier of Victoria announced that Tatts' gaming operator's licence would not be renewed upon its expiry.  In 2009, the 2003 Act was amended so that no further gaming operator's licences could be issued. The result was that the gaming operations which Tatts conducted under its gaming operator's licence ceased and were then carried on by the holders of GMEs (gaming machine entitlement holders).

Grounds for the Case

Tatts claimed it was entitled to payment under cl 7 of the 1995 Agreement.  The primary judge found in Tatts' favour, concluding that the reference in cl 7 of the 1995 Agreement to the issue of a "new gaming operator's licence" would have been understood by a reasonable businessperson as the issue of any licence or authority of substantially the same kind as Tatts' existing gaming operator's licence.  The Court of Appeal upheld that conclusion.

High Court Case

The High Court allowed the State's appeal and unanimously held that the phrase "new gaming operator's licence" in cl 7 of the 1995 Agreement referred to a gaming operator's licence granted under Pt 3 of the 1991 Act (as it might be amended, re-enacted or replaced from time to time).  As a "new gaming operator's licence" was never issued, Tatts was not entitled to payment under cl 7 of the 1995 Agreement.

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Victoria v Tatts Group Ltd [2016] HCA 5