Townpub Pty Ltd v PJ Ryan's Hotels Pty Ltd
[2005] QDC 364
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- Unreported Judgment
- Townpub Pty Ltd v PJ Ryan's Hotels Pty Ltd[2005] QDC 364
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Townpub Pty Ltd v PJ Ryan's Hotels Pty Ltd[2005] QDC 364
Townpub Pty Ltd v PJ Ryan's Hotels Pty Ltd[2005] QDC 364
DISTRICT COURT OF QUEENSLAND
CITATION: | Townpub Pty Ltd v. PJ Ryan’s Hotels Pty Ltd [2005] QDC 364 |
PARTIES: | TOWNPUB PTY LTD ACN 065 108 376 Appellant AND PJ RYAN’S HOTELS PTY LTD Respondent |
FILE NO/S: | BD1900 of 2005 |
DIVISION: | Civil |
PROCEEDING: |
|
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 29 September 2005 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 9 September 2005 |
JUDGE: | Nase DCJ |
ORDER: | Leave to appeal |
CATCHWORDS: |
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COUNSEL: | Mr G.A. Thompson SC with Mr J.M. Horton for the appellant Mr P.L. O'Shea SC with Mr B. Cronin for the respondent |
SOLICITORS: | Deacons Lawyers as town agents for Suthers Taylor for the appellant Phillips Fox for the respondent |
- [1]In June 1994 Mr and Mrs Casey (“the Caseys”) leased the Rising Sun Hotel from PJ Ryan’s Hotels Pty Ltd (“PJRH”). The Caseys had formed Townpub Pty Ltd (“Townpub”) to acquire and conduct a hotel business out of the Rising Sun Hotel before taking the lease. The Caseys’ lease came to an end in June 2004, at which point PJRH acquired the hotel business, including the relevant liquor and gaming machine licences.
- [2]At the commencement of the lease (June 1994) the hotel did not operate a gaming business. During 1995, however, Townpub acquired a gaming machine licence and developed a gaming business at the hotel. When the lease expired in June 2004 the hotel operated a profitable gaming business, running a total of 40 gaming machines from a dedicated gaming room.
- [3]Under the legislative framework in force before the 2003 amendments to the Gaming Machine Act, a gaming machine licence was required to operate gaming machines. The licence specified the number of gaming machines the holder was authorised to operate. For obvious reasons, a gaming machine licence was not transferable. In 2003 the legislative framework was adjusted to impose a cap on the total number of gaming machines in hotels in Queensland. The means by which the cap was to be achieved involved the creation of the operating authority. An operating authority is now required for each gaming machine the holder of a gaming licence operates. Thus, as Townpub operated 40 machines under its gaming licence, when the new scheme was implemented it was issued with 40 operating authorities. One feature of the 2003 amendments to the Gaming Act is that operating authorities can be bought and sold at government supervised sales by holders of gaming licences. The amendments therefore brought into existence a new form of property (the operating authority).
- [4]Another feature of the 2003 amendments is the addition of a method of dispute resolution in cases where the initial allocation of operating authorities affected the existing arrangements between parties. The amendments conferred jurisdiction over these “allocation disputes” on the Commercial and Consumer Tribunal. The Tribunal, on an allocation dispute, was empowered to make appropriate orders including compensation orders in the event of the sale or other disposal of an operating authority (s. 420 Gaming Machine Act). In this case, Townpub applied for compensation arising from the transfer, by force of the Gaming Machine Act s. 78(5), of the 40 operating authorities it held at the end of the Caseys’ lease.
- [5]The issue of whether the application was properly before the Tribunal was dealt with as a preliminary issue by Judge McGill[1].
- [6]The Tribunal dismissed Townpub’s application essentially because it took the view the power to compensate should only be exercised if the applicant for compensation suffered some financial loss as a result of the disposal of operating authorities[2]. As the Tribunal concluded the contractual arrangements between the Caseys and PJRH prevented Townpub disposing of the operating authorities before termination of the Caseys’ lease, it did not think Townpub had suffered any compensable loss under the legislation[3].
- [7]After listening to senior counsel, it is evident Townpub challenges the Tribunal’s conclusion that the lease between the Caseys and PJRH governed the way in which Townpub could deal with the 40 operating authorities it held; and challenges the Tribunal’s view of the scope of the power to award compensation. Both alleged errors involve errors of law. Townpub also complains the Tribunal failed to apply the principles it has applied in the past to other similar applications for compensation, and erred in the methodology it adopted for valuing operating authorities.
- [8]Appeal is by leave to the District Court on the ground of error of law. The parties suggested that to obtain leave an applicant must show a reasonable prospect of demonstrating an error of law, and that the alleged error is one which could have materially affected the decision under appeal[4]. Certainly this test is supported by authority[5]. The test as formulated reflects the idea that if the point taken is without merit, or will not affect the decision under appeal, it is futile to grant leave. On the other hand, if the point taken is arguable (or, as it is expressed in the formulation, enjoys “reasonable prospects” of success) then, consistently with the proper administration of justice, leave should be granted. In this case there are two additional features. Firstly, the claim is for a very substantial sum of money, and secondly, the appeal involves a consideration of the effect of recent amendments to the law. Both these additional features are relevant (or potentially relevant) to the decision whether or not to give leave to appeal.
- [9]The Tribunal generally adopted Judge McGill’s analysis of the 2003 amendments[6]. Nonetheless, I believe the applicant should be allowed to challenge the Tribunal’s reasoning on appeal. Apart from the jurisdictional point considered by Judge McGill, the legislation has not been considered on appeal[7]. The Tribunal’s view that the power conferred on it to order compensation only arises if the applicant can demonstrate financial loss is ultimately based on the explanatory notes and on statements by the Minister in the second reading speech. The difficulty, as Judge McGill observed[8], is that the requirement of financial loss is not written into the legislation. The determination of the proper construction of the scope of the power to order compensation may hold consequences for other disputes. At the same time, the applicant’s points are, in my opinion, arguable. Leave to appeal will therefore be given.
- [10]In the circumstances leave to appeal will be given in respect of the errors of law asserted in the amended notice of appeal.
Order
Leave given to appeal.
Footnotes
[1] PJ Ryan’s Hotels Pty Ltd v Townpub Pty Ltd (2004) QDC 437.
[2] See the Tribunal’s reasons para 118.
[3] The Tribunal’s reasoning is set out at paras 114 to 155 of its decision dated 28 April 2005.
[4] Clements v Flower (2005) QDC 050.
[5] McDonald v Douglas Shire Council (2002) QCA 387.
[6] PJ Ryan’s Hotels Pty Ltd v Townpub Pty Ltd (2004) QDC 437.
[7] I note that in New South Wales similar legislation has been considered by their Court of Appeal: Jabetin Pty Ltd v Liquor Administration Board and Ors; Jabetin Pty Ltd v Benwine Pty Ltd (2005) NSWCA 92 (1 April 2005); Masters v Garcia (2005) NSWCA 287 (26 August 2005).
[8] PJ Ryan’s Hotels Pty Ltd v Townpub Pty Ltd (2004) QDC 437 paras 24,25