FEDERAL COURT OF AUSTRALIA

Sportsbet Pty Ltd v State of New South Wales (No. 3) [2009] FCA 1248

SPORTSBET PTY LTD v STATE OF NEW SOUTH WALES, RACING NEW SOUTH WALES and HARNESS RACING NEW SOUTH WALES

NSD 1821 of 2008

PERRAM J

5 NOVEMBER 2009

SYDNEY

THE COURT ORDERS THAT:

1.                  The motion be dismissed with costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                     By a notice of motion dated 22 September 2009 the applicant Sportsbet seeks an order that:

The applicant pay the monthly instalment in the sum of $223,570.00 pursuant to the grant of approval to Sportsbet Pty Ltd dated 22 June 2009 into Court or such other arrangement as may be agreed to between the parties.

2                     That relief is sought in the context of Sportsbet’s present proceedings, which seek to establish that the provisions of the Racing Administration Act 1998 (NSW) which require it to pay certain fees to the second and third respondents (“RNSW” and “HRNSW” respectively) infringe s 92 of the Constitution and are invalid.   Whilst this litigation has been pending, Sportsbet has been paying those fees under protest.  It seeks, as part of the relief claimed against RNSW and HRNSW, the return of those fees. 

3                     As part of their response to that part of Sportsbet’s claim RNSW and HRNSW have pleaded a defence based upon the Recovery of Imposts Act 1963 (NSW) (“the Imposts Act”).   That Act regulates the recovery of imposts which have been raised lawfully.  Section 4(1) provides:

Proceedings referred to in section 2 or 3(4) to recover an amount paid are however maintainable only to the extent that the person bringing the proceedings (“the claimant”) satisfies the Court that the claimant has not charged to or recovered from, and will not charge to or recover from, any other person any amount in respect of the whole or any part of the amount paid.  This applies whether or not such amount has been itemised or otherwise separately identified in any invoice or other documentation.

4                     RNSW and HRNSW allege that Sportsbet has passed on the fee so that this section affords them a defence.

5                     Sportsbet’s concern may then be identified.  If it continues to pay the monthly fee under protest and ultimately succeeds in demonstrating the Racing Administration Act 1998 to be invalid then that victory will be Pyrrhic if RNSW and HRNSW can successfully rely upon s 4(1) to resist recovery. 

6                     I do not doubt that the powers of this Court extend to preserving the subject matter of the present litigation.  Jurisdiction is conferred on this Court to hear and determine matters arising under the Constitution: s 39B(1A)(b) Judiciary Act 1903 (Cth).  The present proceeding is such a matter arising directly under s 92.  In the exercise of that jurisdiction this Court has such powers as are incidental and necessary for the effective discharge thereof: Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 616, 620, 623-624 and 630-631.  As that case shows, that jurisdiction comes from s 23 of the Federal Court Act 1976 (Cth), which provides:

The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.

7                      However, that power is not boundless and is subject to limitations.  One of those is that it is not a power which extends to the creation of substantive rights in addition to those for the protection or enforcement of which the jurisdiction of the court is invoked: Jackson at 619. 

8                     That has a number of consequences.  First, I do not see that I have the power to order Sportsbet to pay the money to any person in such a way that the title to the funds in question might be affected.  Presently, the Racing Administration Act 1998 requires the fee to be paid to RNSW and HRNSW and provides that a criminal offence will be committed if it is not.  The title to that money is not subject to any dispute.  Until paid by Sportsbet, the money will belong to it; after payment to RNSW and HRNSW the money will belong to them.  An interlocutory order is powerless to vary that analysis of title.  The constitutional allegations themselves do not affect title to the money either; at best they generate an action for monies had and received.  

9                     Secondly, I do not think that an order of this Court that Sportsbet pay the money into Court would have the effect that the money so paid would be taken to have been received by RNSW and HRNSW.  That would require the creation of an agency between this Court and RNSW and HRNSW so that receipt by one constituted receipt by the others.  I do not see how such a state of affairs may be brought about on an interim basis.  Even assuming it could, it is by no means obvious that this Court should embark on the making of orders which, by reason of s 109 of the Constitution, might impact on the operation of State laws.  Difficult issues arising from that provision or, possibly, s 79 of the Judiciary Act 1903 (Cth), may be put to one side; assuming power, notions of federal comity would inevitably require some caution before making such orders.

10                  Thirdly, even assuming those problems could be surmounted it is unclear what would happen after the suit was concluded if Sportsbet were successful in its primary claims.  At that time there would be a fund of money collected by this Court as agent for RNSW and HRNSW.  Presumably it is said by Sportsbet that the agency would thereupon terminate.  Leaving aside the difficulties of finally terminating an agency created by interim order, such a termination would not have the effect of altering title to the funds which, ex hypothesi, had already been collected on RSNW and HRNSW’s behalves.  Some form of vesting order would therefore be required and that, in turn, would require a determination that title to the funds should be transferred to Sportsbet.  But on no view of s 92 does it so operate; still less do I see how s 23 of the Federal Court Act 1976 can be pressganged into this sort of endeavour.  In short, the end to which this application is directed may well be proper, but the means selected are conceptually inadequate. 

11                  In truth, what Sportsbet wants is security in the event that it wins the proceedings.  In some circumstances, security is available against a defendant so long as there is some discretionary matter to which a condition as to its provision may be attached: cf. Ritter v North Side Enterprises Pty Ltd (1975) 132 CLR 301 at 305.  The present application is not of that kind.  In those circumstances, the motion should be dismissed with costs. 

Associate:

Dated:         5 November 2009