Racecourse Totalizators Pty Ltd v The Totalisator Administration Board of Queensland [1995] FCA 536

CATCHWORDS INTERLOCUTORY INJUNCTION - application to restrain respondent from imposing transactional limits on computer betting - difficulty in balancing interests of punters generally and loss of profits and custom to applicant - mandatory injunction - whether applicant must show that its case is strong - consideration of what is required to be done by the order Trade Practices Act 1974 s.46 Racing and Betting Act 1980 (Qld) Active Leisure (Sports) Pty Ltd v Sportsman's Australia Limited [1991] 1 Qd R 301 Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1982) 82 ALR 499 Tito v Waddell (No 2) [1977] Ch 106 Racecourse Totalizators Pty Ltd v The Totalisator Administration Board of Queensland No QG98 of 1995 Kiefel J Brisbane 28 July 1995

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION No. QG 98 of 1995 BETWEEN: RACECOURSE TOTALIZATORS PTY. LTD. Applicant AND: THE TOTALISATOR ADMINISTRATION BOARD OF QUEENSLAND Respondent JUDGE MAKING ORDER: Kiefel J. DATE OF ORDER: 28 July 1995 WHERE MADE: Brisbane MINUTES OF ORDERS THE COURT GRANTS: 1. An injunction to remove the transactional limits imposed by the respondent. 2. Minutes of Order to be drafted by Counsel. 3. The costs of the parties are their costs in the cause. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION No. QG 98 of 1995 BETWEEN: RACECOURSE TOTALIZATORS PTY. LTD. Applicant AND: THE TOTALISATOR ADMINISTRATION BOARD OF QUEENSLAND Respondent CORAM: Kiefel J. DATE: 28 July 1995 PLACE: Brisbane REASONS FOR JUDGMENT The applicant, Racecourse Totalizators Pty. Ltd. ("RT") is the operator of on-course totalisator betting facilities for four licensees in Queensland, being four racing clubs at Rocklea, Gatton, Beaudesert and Redcliffe. It is the facilities provided by arrangement with the Metropolitan Harness Racing Club at Rocklea, and which are connected with the respondent's, The Totalisator Administration Board of Queensland ("TAB") central computer, which are the subject of these proceedings. On-course facilities are also provided or managed by the TAB and another company. The TAB is however the only provider of off-course totalisator betting in Queensland. A feature of totalisator betting is that sums wagered by persons on a race are all pooled and, after statutory deductions, a dividend is paid. The advantage obtained is a higher return to punters. Forecasts of dividends for a particular race are made from time to time prior to the race. This may be compared with fixed odds which are offered by bookmakers. In totalisator betting it is of importance to punters to ascertain the likely size of the dividend and this is better known closer to the commencement of the race where, however, time is of the essence. Since about May 1990 the TAB has assumed responsibility for the co-ordination of the on-course pool through its central computer system. In principle there has been and is no objection taken to this course. The TAB's computer receives all on-course bets from various locations in Queensland. Apart from manual entry by an operator at various outlets, the TAB itself offers a Customer Input Terminal and a Personal Betting Service. The latter, I understand, is similar to the service provided by the applicant of Rapid Electronic Betting ("REB") by which a punter's files (most usually a professional punter) on his or her personal computer and which contain the various combinations of bets desired to be placed are read by the applicant's computer and passed on for acceptance and entry into the TAB's system as a betting transaction. The punter has the opportunity to factor information, including projections as to dividends, into his or her personal computer and quickly form a view as to which bets ought be placed and have the bets placed and accepted by the TAB. This is made possible by the speed with which they can be transmitted to the TAB's central computer. The bets may be substantial in number, combination or value and it may be inferred can have a major impact on the ultimate dividend. The difference between the computer facilities offered by the TAB and the applicant's REB system is that the TAB limits the sending of its transactions to its computers to fifty transactions per minute. This is the result of a conscious, policy, decision and is effected by the communications hardware in the machine. The applicant's machines are not so restricted. By letter dated 20 April 1995 the TAB advised that it intended to effect a limit to transactions from the Rocklea facility to fifty transactions per minute but it has now undertaken to permit them at 100 transactions, which, it says, should suffice. Rocklea is presently the only club which provides random electronic betting but it is likely that the applicant, and perhaps others, will implement them at other locations in the near future. The letter in relevant parts advised: "A review of the performance of our wagering system has shown some anomalies related to the sale and payout transactions received from the Racecourse Totalisators' DLT system at Rocklea. Both of these issues need to be addressed in the context of the management of our statewide betting and information services. Our logs indicate that bets are being input on the DLT interface directly from a computer file. This results in abnormal peaks in bet rates being generated from Rocklea. If this method of inputting bets was implemented by all DLT's, it would have a severe impact on the overall performance of the totalisator betting and information services throughout Queensland. It would also give individual customers at Rocklea an advantage which is not available to anyone else using either the on or off-course TAB wagering systems provide by TAB-Q. ... Measures are now being put in place to ensure that all DLT's have fair access to the TAB wagering system resources, and that the system is now protected from excessive peak loads that could upset operational stability, and service quality. Effective immediately, the Rocklea DLT has an allocated rate of 50 transactions per minute. Transactions in excess of this limit will be rejected. ...". The applicant seeks an injunction restraining the respondent from imposing the transactional limits. The respondent however points out that that would need to be converted to a mandatory order, given that it has put in place such a limit by alteration to its software. Despite references in the letter of 20 April to apprehended technical difficulties, this is not the substantial reason for the TAB's decision. So much is conceded in its affidavit material and in submissions. The limits to the capacity of its computer is nevertheless raised as a basis for refusing the injunction. I do not consider however that there is presently sufficient evidence to allow that to be seriously taken into account. It is not suggested that presently its capacity is affected by the transactions from Rocklea. The perceived threat is said to arise if REB systems are set up at other locations, although there was dispute about how many would in any event likely operate at any one time. It was submitted by the respondent that the Court should not wait until difficulty was actually encountered by it, and I would agree with that if there were proper evidence which showed a likelihood that the integrity of its system would be in jeopardy at some point. As it is there are simply bald assertions, which by themselves and without further explanation are not inherently convincing. If an injunction were to be granted it would not prevent the TAB from applying at a later time, and on proper evidence, for a discharge of the injunction or a variation of it. The TAB's decision is clearly one based upon a view it has taken of inequalities resulting from use of the computer facilities. The applicant's case contains an allegation of contravention of s.46 of the Trade Practices Act 1974. It is alleged that the TAB has, by reason of its monopoly in off-course betting and the extent of funds received thereby, a substantial power in two markets and further by reason of its ownership of the central computer. Putting to one side the description of the relevant market the latter factor is arguably a relevant barrier to entry and the conduct of the respondent arguably indicative of the holding of the requisite power. The respondent submits that the applicant's case is not a strong one, particularly since it will be unlikely to be able to make out the necessary subjective intention, the "purpose" required by s.46 in using its power to prevent the applicant engaging in competitive conduct. It was not however submitted that the applicant had no right which might found protection by an injunction nor was it suggested that there was no serious question to be tried, and it seems to me that there clearly is. Other issues which might affect the applicant's right, ultimately, to relief, such as whether the respondent is bound by the provisions of the Trade Practices Act were foreshadowed, but not argued before me. The applicant offers an undertaking as to damages and there is no doubt cast upon the worth of that undertaking. The TAB points to the potential for loss of confidence of punters since they may view the system operating without limit as unfair. The extent of present or future effect of punters using the REB system is not referred to and it may not be able to be quantified. The question is left as one of the TAB's concern as to the perceptions of punters generally. So viewed, the point raised by the TAB focuses upon the interests of third parties and upon the TAB's desire to control or regulate racing. The extent of its obligations under the Racing and Betting Act 1980 (Qld), was not put forward as a basis for the refusal of an injunction, although it was submitted that allegations made against it as a statutory body with these duties would then require clear proof. The applicant points to the experience of a few of the club's customers who have had transactions rejected and suffered loss. It fears a loss of custom which it may not later reverse and points to a potential loss of income which may be more accurately described as a potential loss of profits rather than it moving to a position of overall loss. Details of its present loss of profits or projections as to the future are not put forward, although I do not have difficulty accepting that some profits would likely be lost. The information provided by the TAB does not suggest that the profits lost are presently great and less so given its increase of the limit to 100 transactions per minute. The material concerns a relatively small statistical period and does not take into account losses from other locations if they are implemented but subjected to restrictions, or flowing from an inability to implement them at all. The position with respect to the applicant's customers is a little more difficult to fathom. It is not realistic that they would turn from the applicant to the TAB or the other company, whose computer facilities would be more restrictive in any event. On the other hand, I have difficulty in accepting the TAB's submission that they would simply adjust their betting practices and place their bets a minute earlier. It seems to me that if it is the method of betting, and not the local venue or race, which is the attraction, as may well be the case with professional punters, it is possible that they might be attracted to betting at other locations, including New South Wales, where the facilities are available. I cannot however discern what may be the long term future if they did so and whether they would return if the applicant ultimately succeeded in having the limits removed. A factor which might have assumed some importance is the difficulty the applicant may encounter in proving its loss at trial, but in this respect there is doubt about whether it will pursue the remedy of damages. A final decision has not been made. There is a difficulty in balancing the two interests if they are said to be the interests of punters generally on the one hand and the loss of profits and custom of the applicant on the other. They are not truly comparable. The question whether the interests of punters would be adversely affected may be one which requires the determination of the Court. In this action the Court may be concerned with whether such a view was bona fide held, and whether it was the only reason for its actions or whether it combined with other purposes, but not whether it was one correctly held. Reduced to practical consequences, there are none I consider for the TAB itself and I am unable to gauge the effect it will have on the greater body of punters. The applicant's income will be affected although the extent of it is unknown. Its desire to or ability to effectively expand will be affected. It will be restricted in its commercial activities. On the other hand if it does so in the interim it will run the risk that limits will later be applied. That however would not affect the prospects of either of the parties in the action nor render more difficult the applicant's position at trial. It was submitted by Mr McKenna of Counsel for the TAB that because a mandatory interim injunction is sought the applicant must show that its case is strong, so that the Court has the requisite "high degree of assurance" that such an order is appropriate: Active Leisure (Sports) Pty. Ltd. v. Sportsman's Australia Limited [1991] 1 Qd. R. 301, 314 per Cooper J., and the cases there referred to. Mr. Muir QC for the applicant however relied upon Businessworld Computers Pty. Ltd. v. Australian Telecommunications Commission (1982) 82 ALR 499, 502 where Gummow J., as he then was, adopted the remarks of Megarry J. in Tito v. Waddell (No. 2) [1977] Ch 106 at 321, which included the following statement: "If it appears to the Court that, exceptionally, the case is one in which withholding a mandatory interlocutory injunction would in fact carry a greater risk of injustice than granting it even though the court does not feel a "high degree of assurance" about the plaintiff's chances of establishing his right, there cannot be any rational basis for withholding the injunction". I concede to having difficulty with such an approach. It seems to me that the effects which the grant or withholding of such an order will have are taken into account in considering where the balance of convenience lies. The risk of irreparable harm is one such effect and necessarily then part of that enquiry and no further guiding principle is necessary. I respectfully agree with Cooper J.(Active Leisure, 313). But it is another thing to say that a technical classification of an order as "mandatory" automatically attracts the requirement that the Court have further confidence in the correctness of the order. Simply because an order requires something to be done, does not seem to me to require, as a matter of course, an examination of the strength of the applicant's case. Such an approach is not consistent with the process involved in the balance of convenience and does not follow from the authorities, including Active Leisure. What is firstly required is a consideration of what it is that is required to be done by the order and the effect that will have. It is where the order can be seen to have a profound effect that further "assurance" will be necessary. This may be so where a defendant has raised a triable issue of finally determining a matter and denying the prima facie right to a full hearing, the rationale behind the "traditional test" referred to in Active Leisure (314). It may also arise at a lesser level where, for instance, what is required is very costly and time consuming. In these cases the position is reached where the making of the order cannot be justified without another strong factor being able to be weighed against these effects and that factor may be a strong case being shown for final relief, although the difficulty is assessing it at an interlocutory stage may often have the result that the relief is denied. That may well have been the result here were I to consider it necessary to assess the strength of the applicant's case. It will often be so in cases concerning s.46 of the Trade Practices Act, where the necessary factual background enabling the drawing of an inference as to substantial purpose cannot be fully presented at an early stage. But I do not consider that point is reached here. The order, whilst it requires the TAB to "undo" the limits imposed does not seem to me to involve a lot, either in time, money or degree of technical difficulty. Indeed the respondent has, in the period since 20 April, removed the limit and raised it by alteration to its software and without apparent difficulty. A return to the position which prevailed for almost a year prior to 20 April will not determine the parties' rights. It will be a commercial decision for the applicant as to whether it will put the REB facilities in place elsewhere with the knowledge that impositions may, if it is unsuccessful in the end, be applied to them. I propose to grant an injunction having the effect of removing the transactional limits imposed. I will consider Minutes of Order to be drafted by Counsel and which will deal, amongst other things, with the time when the order is to take effect. I will hear Counsel as to costs. I certify that this and the preceding nine pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel. Associate Date: 28 July 1995 Counsel for the applicant: Mr J Muir QC and Mr N Thompson Solicitors for the applicant: Gustafson's Counsel for the respondents: Mr J McKenna Solicitors for the respondents: O'Shea Corser & Wadley Date of Hearing: 25 July 1995 Place of Hearing: Brisbane Date of Judgment: 28 July 1995