AIR RESCUE SERVICES LIMITED V THE SECRETARY FOR INTERNAL AFFAIRS HC WN CIV 2010-485-1919

AIR RESCUE SERVICES LIMITED V THE SECRETARY FOR INTERNAL AFFAIRS HC WN CIV 2010- 485-1919 8 October 2010IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV 2010-485-1919UNDER the Judicature Amendment Act 1972 IN THE MATTER OF an application under the Gambling Act 2003 BETWEEN AIR RESCUE SERVICES LIMITED Plaintiff AND THE SECRETARY FOR INTERNAL AFFAIRS Defendant Hearing: 30 September 2010 Counsel: M A J Elliott and S T Cottrell for Plaintiff K Muller for Defendant Judgment: 8 October 2010JUDGMENT OF RONALD YOUNG JIntroduction[1] This is an application for interim orders under r 30.4 of the High Court Rules that I direct the Secretary for Internal Affairs to issue a Class 4 venue licence to Air Rescue Services Limited ("ARS"), the plaintiff for one day from 30 September 2010 with respect to the premises known as The Crossing at Kaiapoi Limited ("TCKL"). [2] I heard the application on 30 September and refused it. In the circumstances it was not possible for reasons to be given then. I now do so.[3] The plaintiff's case was that such an order was necessary to preserve its appeal rights from the defendant's refusal on 23 September 2010 to grant its application for a class 4 venue licence under the Gambling Act 2003. On 30 March 2010 the venue licence for the premises was cancelled. Unless by 30 September 2010 (six months later) a new licence was granted then the potential licensee would lose the chance for a class 4 venue licence with 18 gaming machines at TCKL. 1 In that event at best the venue licence at The Crossing would be limited to nine machines. This will cause a substantial loss of income for the plaintiff who is the ultimate beneficiary of the profit from the gaming machines. [4] If a venue licence was granted for one day by 30 September then a new six month period for the purpose of s 92(1) would commence on 1 October 2010 thus preserving the plaintiff's appeal rights with respect to a venue with 18 machines. [5] The substantive proceedings seek judicial review of the decision of the defendant to refuse a venue licence alleging the defendant: a) misinterpreted or misapplied s 4 of the Gambling Act; b) failed to take into account relevant considerations; c) took into account irrelevant considerations; and d) failed to give the plaintiff a proper chance to be heard, a breach of natural justice. [6] The plaintiff accepts that if it succeeds in obtaining an interim order then it will pursue its appeal from the defendant to the Gaming Commission. The judicial review proceedings will necessarily then be on hold or no longer pursued until the appeal rights are exhausted. The review grounds are also likely to be the appeal grounds.1 Gambling Act 2003, s 92(1).[7] Finally to give perspective to this application s 92 of the Gambling Act provides as follows:92 Limit on number of gaming machines for which class 4 venue licence held on 17 October 2001(1) This section applies to a class 4 venue for which— (a) a class 4 venue licence was held on 17 October 2001; and (b) there has not been a period of 6 months or more since 17 October 2001 when no class 4 venue licence was held. (2) A society must not operate more than 18 gaming machines at a class 4 venue. (3) The number of gaming machines notified to the Secretary under section 89(1), and the models and serial numbers of the gaming machines, must be treated as a condition of the class 4 venue licence and the society must not change the gaming machines, or operate more than that number of gaming machines at the venue, unless— (a) a new class 4 venue licence is obtained that allows the change; or (b) the licence is amended to allow the change. (4) The limit in subsection (2) and the condition as to number imposed under subsection (3) may be overridden under section 95 or reduced by regulations made under section 314(1)(a).Background facts[8] The Crossing has been a gaming machine venue since at least 2001. Some years before 2010 the venue licence holder was Caversham Foundation Limited and the venue operator, TCKL. Until mid 2010 the sole shareholders and directors of TCKL were Mr Turner and Ms Spicer. In mid 2009 Caversham's venue licence was considered for renewal by the defendant. The defendant refused to renew the licence because of the unsuitability of Mr Turner and Ms Spicer and a third employee as key persons (a statutory concept in the Gambling Act) at the venue. Mr Turner was the venue manager, Ms Spicer a duty manager and the second woman the other duty manager.[9] Caversham appealed the decision to the Gambling Commission relating to the suitability of Mr Turner. Ms Spicer's unsuitability to be a "key person" was accepted. On 30 March 2010 the Gambling Commission issued a decision declining the appeal. On that date therefore Caversham's venue licence came to an end. However two days later on 1 April Caversham purported to surrender its venue licence. [10] On 12 April 2010 Four Winds Foundation Limited applied for a venue licence for the premises at The Crossing. TCKL was to be the venue operator and Ms Spicer the new manager. By this time Ms Spicer was the sole director and shareholder of TCKL. The defendant indicated that it proposed to refuse to grant the licence because Ms Spicer, who was a "key person", was unsuitable. The application was withdrawn. [11] On 7 July 2010 the shares in TCKL were transferred from Ms Spicer to Trevor Stewart Flutey and on 8 July he became a director of the company. Ms Spicer resigned as a director of TCKL on 14 July. On 19 July ARS made an application for a venue licence for the premises. The venue operator was to be TCKL with Mr Flutey as the sole shareholder and director of the company. [12] The Department then began processing the application. TCKL was represented by Mr Raymond Donald McIntyre with respect to their application. Mr McIntyre has some experience in this area. Mr Thompson is a gambling inspector. He was part of the team who investigated the application. During the course of his investigation he spoke with Mr McIntyre. Mr McIntyre gave him some documents which showed that he and the plaintiff were aware of the unsuitability of Mr Turner and Ms Spicer as key people in any gambling establishment. [13] During the course of his investigation Mr Thompson said (in his affidavit), that he discovered Mr Turner and Ms Spicer were working at TCKL's premises. Mr Thompson was told they would only be involved working behind the bar. Mr Thompson told Mr McIntyre that if Mr Turner or Ms Spicer had anything to do with the gaming operation it seemed to him it would be very hard for the plaintiff to get a licence.[14] Mr Thompson then arranged a visit to The Crossing. He made an appointment with Mr Flutey. When he called at the premises neither Mr Turner nor Ms Spicer were there. Mr Thompson recorded his conversation with Mr Flutey on a job sheet which Mr Flutey signed. Mr Flutey said that he was an electrician working full time and works "all around the country". He said that he was contracted with an employer to the end of 2010. [15] As to the purchase of TCKL Mr Flutey said:I have bought shares and the debt for The Crossing. Once the debt is paid I am looking at buying the assets of the business. I purchased the shares about 3 months ago.[16] He was then asked by Mr Thompson who his employees were – he said:Nicky and Stu are doing the bar [Ms Spicer and Mr Turner]. Lee-Ann is doing the cooking. After that me and I will employ a bar manager and will keep Lee-Ann on. Lee-Ann will be the venue manager. She worked at Bentleys as bar manager. She has a duty manager's licence.[17] And whether Lee-Ann was the venue manager.Yes and no. I am trying to make ends meet. She has experience in gaming machines and has done bankings, auditing, refills, cancel credits etc.[18] Mr Flutey went on to say he had paid $100 for all the shares of TCKL. However he did not know much debt was owing. He was then asked when he would buy the assets of the company and he said:I want to buy them within 12 months. Stu and Nicky still own the assets. They are worth about $35,000. I will pay off the debt first and then buy the assets.[19] Mr Thompson then told Mr Flutey there was concern about Mr Turner and Ms Spicer's involvement in the business. Mr Flutey said:Nicky and Stu will stay behind the bar and I will pay them a wage. As soon as I get gaming machines in Stu and Nicky will have no involvement at this bar what so ever.[20] Mr Flutey has sworn an affidavit in these proceedings. He disputed the accuracy of part of the job sheet although he acknowledged he had signed it. As to his purchase of the shares he said:7. I bought the shares in TCKL in the hope of helping Nicky and Stewart out, but also as a business opportunity for me. I could see the potential of the venue and hoped (and still hope) to turn it around and have it running profitably again. 8. Part of the reason for me buying TCKL was so that Nicky and Stewart would be able to be employed at the venue. They have children and bills and rent to pay like anyone else, and it is not easy to find work in Kaiapoi at the moment.[21] Mr Flutey said that he works as an electrician and intends to continue to do so. He said he does not propose to be directly involved in the operation of the venue on a day to day basis. He has employed Lee-Ann as the venue manager. Lee-Ann was previously identified by him as the cook at The Crossing. [22] On 22 September the defendant gave its decision refusing the venue licence. A few days before on 17 September the plaintiff's solicitor emailed the defendant threatening legal proceedings if it did not urgently issue a decision. [23] In a letter to the plaintiff on 22 September the defendant after recounting the background information regarding the particular premises gave the following reasons for refusing the licence:29. Section 4 defines "key person" in relation to a class 4 venue to include personnel and any other person whom the Secretary reasonably believes to have a significant interest in the management, ownership or operation of a venue operator. In view of the above, the Secretary has reasonable grounds to believe that Mr Turner and Ms Spicer meet this definition. 30. The Secretary must be satisfied as to the suitability of key persons and the Secretary cannot be satisfied that Mr Turner and Ms Spicer are suitable persons in terms of sections 67(1)(d) taking into account sections 68(1)(c) of the Act.• Section 67(1)(d) requires that any investigations carried out by the Secretary do not cause the Secretary not to be satisfied as to the suitability of any other key person in terms of section 68.• Section 68(1)(c) requires that the Secretary may investigate and take into account the profile of past compliance by the key person with the Act, minimum standards, game rules, Gazette notices and licence conditions. 31. Considering the factors identified in relation to the various change(s) of director and shareholder, the Secretary cannot be satisfied that:• either Mr Turner and Ms Spicer are suitable persons, in terms of section 68, to be involved in the conduct of class 4 gambling at a class 4 venue. Therefore, the grounds in sections 67(1)(d) and 67(1)(r) are not met.• either Mr Turner or Ms Spicer will comply with all relevant requirements of this Act, licence conditions, game rules, and minimum standards as both already have a history of failing to do so. 32. Section 67(1) states that the Secretary must refuse to grant a class 4 venue licence unless satisfied that:• Any investigations carried out by the Secretary do not cause the Secretary not to be satisfied about the suitability of any other key person, in terms of section 68.• There are no other factors that are likely to detract from achieving the purposes of the Act. 33. Therefore, pursuant to section 67(1) of the Act, the Secretary refuses to grant the Licence in respect of the Venue.The parties' contentions and discussion[24] The essence of the plaintiff's concern can be expressed in this way. When the defendant refused to grant the plaintiff's licence on 22 September 2010 the plaintiff had a statutory right of appeal. However it believes that s 92(1) of the Gambling Act effectively means that unless it can have its appeal heard by the Gambling Commission by 30 September 2010 (clearly impossible) the number of gaming machines permitted under any licence ultimately granted with respect to the premises will automatically reduce from 18 to nine. 22 See s 92(1) at [7].[25] Section 92(1) of the Gambling Act creates the difficulty for the plaintiff. Prior to 2001 class 4 venue licences were entitled to have up to 18 gaming machines. After 2001 that was reduced to nine for new applicants. However, class 4 venue licences (with 18 gaming machines) in existence as at October 2001 were protected (as far as the 18 gaming machines were concerned) as long as there was not a period of six months or more when there was no class 4 venue licence with respect to the premises. [26] Thus, when the Gambling Commission dismissed the plaintiff's appeal with respect to TCKL on 30 March 2010 any applicant for a venue licence at TCKL had six months within which to apply for and obtain a licence if they wished to retain the right to have 18 gaming machines at their premises. If they failed to have the application granted within the six months while they could still pursue a licence their entitlement was then limited to no more than nine machines. Understandably, therefore, the plaintiff wants to protect the possibility of continuing with 18 gaming machines. [27] The plaintiff's case is if this Court directed the defendant to grant an interim order for a licence before 1 October 2010 for one day this would essentially preserve the possibility of 18 gaming machines. It would allow the plaintiff time to file an appeal from the defendant's decision and have it heard by the Commission within the six month period. [28] The existence of a licence for one day from 30 September would mean, in terms of s 92(1): a) as at 30 September there had not been a period of six months or more when no class 4 venue licence was held; and b) the six month period in s 92(1) would then commence from 1 October 2010.[29] The plaintiff approached the application for interim orders on the basis of the established interim injunction criteria: preservation of the status quo; arguable case; and balance of convenience and overall assessment. [30] The plaintiff's case is that it has a strong arguable case that the defendant's decision is wrong. However despite that strength and a right of appeal to the Commission the plaintiff will lose the prospective "right" to have up to 18 gaming machines on its premises because there is not enough time to exercise its statutory right of appeal. It says therefore to preserve the status quo, an entitlement to 18 machines if the licence is granted, the strength of its case and the balance of convenience favours the unusual step of directing the grant of a one day licence. I consider each factor in turn. [31] As to the strength of its case the plaintiff argues that the essence of that assessment revolves around the Department's view that Ms Spicer and Mr Turner were "key people" for the purpose of s 4 of the Gambling Act. [32] It says that there was little or no evidence to support the finding that these two were "key persons" and the Department was therefore clearly wrong when it concluded they were. This error was the ground for refusing the licence. It says the defendant failed to make enquiries with Mr Flutey to ascertain exactly what Mr Turner and Ms Spicer were doing at the venue and misinterpreted the Act. [33] Further it says that the defendant did not take into account that Mr Flutey had bought all of the shares in the company and that Spicer and Turner were not involved either as directors or shareholders but were mere employees. [34] It submits that the Department took into account the irrelevant background relating to the various sales of shares in TCKL and the change in directorship and should have simply focussed on the current position. [35] It complains that the defendant promised to give the plaintiff an opportunity to be heard in relation to the finding that Mr Turner and Ms Spicer were key people and that they failed to do so.[36] As to the balance of convenience it says that granting a one day licence will have no deleterious effect other than on ARS. It will suffer significant loss if the order is not made essentially cutting the revenue from the licence in half. The making of an order for a one day venue licence would not mean there would in fact be any gambling on the premises on that day. [37] Section 67 of the Gambling Act as relevant provides as follows:67 Grounds for granting class 4 venue licence(1) The Secretary must refuse to grant a class 4 venue licence unless the Secretary is satisfied that (a) the applicant holds a class 4 operator's licence; and (b) the possibility of persons under 18 years old gaining access to class 4 gambling at the class 4 venue is minimal; and (c) the venue manager is an individual and any investigations carried out by the Secretary do not cause the Secretary not to be satisfied about his or her suitability, in terms of section 68, to supervise— (i) the conduct of class 4 gambling at the venue; and (ii) venue personnel; and (d) any investigations earned out by the Secretary do not cause the Secretary not to be satisfied about the suitability of any other key person, in terms of section 68; and (e) if the application relates to a class 4 venue that is licensed to another corporate society, the other corporate society has surrendered its class 4 venue licence for the venue; and (f) the territorial authority has provided a consent (if required under section 98); and (g) on issue of the licence, the applicant will own any gambling equipment (except for electronic monitoring systems) that it proposes to operate; and (h) on issue of the licence, the applicant will not operate any gambling equipment that is financed by the manufacturer, distributor, or vendor of the equipment; and (i) all gambling equipment to be operated at the venue meets relevant minimum standards; and (j) the class 4 venue agreement (if required)—(i) enables the class 4 gambling conducted at the class 4 venue to comply with this Act and the proposed class 4 venue licence; and (ii) includes the information specified in section 69; and (k) the class 4 venue is not used mainly for operating gaming machines; and (l) for a class 4 venue that is not established before the commencement of this section, the class 4 venue is not to be part of a place at which another class 4 venue or a casino is located; and (m) for an application to which section 65(3) applies, no person will be both a key person in relation to the relevant class 4 operator's licence and a key person in relation to the class 4 venue licence; and (n) if the New Zealand Racing Board is the applicant, the class 4 venue is either— (i) owned or leased by the New Zealand Racing Board and used mainly for racing betting or sports betting; or (ii) a racecourse; and (o) if the applicant is a racing club, the class 4 venue is a racecourse; and (p) the risk of problem gambling at the class 4 venue is minimised; and (q) the proposed venue is suitable in all other respects to be a class 4 venue; and (r) there are no other factors that are likely to detract from achieving the purpose of this Act; and (s) any other requirement set out in regulations or licence conditions is, or will be, met. (2) If the Secretary decides to refuse to grant a class 4 venue licence, the Secretary must notify the applicant, or, if there is a venue agreement, the parties to the agreement, and the venue manager of— (a) the reason for the decision; and (b) the right to appeal the decision; and (c) the process to be followed for an appeal under section 77.[38] It is important to note that this was not an application for renewal of an existing licence but an application for a new licence. The statutory provisions governing the two situations are quite different. The existing licence for TCKL was cancelled on 30 March 2010. Section 67(1) provides that the Secretary must refuse to grant a licence unless he is satisfied of the myriad of matters set out in s 67. That includes at para (d) the suitability of key persons. [39] Section 68 relates to key persons. It provides:68 Determining suitability for class 4 venue licence(1) In determining whether a key person is a suitable person for the purpose of sections 66 and 67, the Secretary may investigate and take into account the following things: (a) whether he or she has, within the last 10 years,— (i) been convicted of a relevant offence: (ii) held, or been a key person in relation to, a class 3 or class 4 operator's licence, a class 4 venue licence, a casino licence, or a licensed promoter's licence under this Act or any licence under previous gaming Acts that has been cancelled, suspended, or for which an application for renewal has been refused: (iii) been placed in receivership, gone into liquidation, or been adjudged bankrupt: (b) the financial position and the credit history of the key person: (c) the profile of past compliance by the key person with— (i) this Act, minimum standards, game rules, Gazettenotices, and licence conditions; and (ii) the Racing Act 2003 or the Racing Act 1971 (and any rules of racing made under either of those Acts); and (iii) previous gaming Acts, and regulations made under previous gaming Acts; and (iv) a licence or a site approval issued under a previous gaming Act.[40] Section 66 of the Act requires the Secretary to investigate applications for class 4 venue licences. Section 66(2) authorises investigations of key persons to determine if they are suitable. It provides as follows:66 Secretary must investigate applicant for class 4 venue licence(1) The Secretary must undertake any investigations the Secretary considers necessary to determine— (a) whether the applicant is eligible and suitable to be granted a class 4 venue licence; and (b) whether the venue manager and venue operator are suitable persons in terms of section 68. (2) The Secretary may undertake whatever investigations the Secretary considers necessary to determine whether any other key person is a suitable person in terms of section 68. (3) In undertaking investigations, the Secretary may— (a) require the applicant and any key person to provide further information relating to the application and to undergo an independent investigation into its financial position and credit history by a person nominated by the Secretary: (b) require the police, a Government agency (except for the Inland Revenue Department), or a racing code to provide information about, or comment on, the applicant and any key person or other matters concerning the application: (c) refer to the police a copy of the application and any further information provided by the applicant and any key person. (4) If a racing code is required to provide information about a person, then it must provide any information that it holds that relates to— (a) breaches, within the last 10 years, by the person of any rules of racing made under the Racing Act 2003 or the Racing Act 1971; or (b) the conviction, within the last 10 years, of the person for an offence against the Racing Act 2003 or the Racing Act 1971. (5) A person required to provide information under this section must provide the information as promptly as is reasonable in the circumstances. (6) Subsection (3) does not limit subsection (1).[41] A key person is defined in the Act as follows:key person means,— (a) in relation to a class 4 operator's licence, a person who— (i) is a trustee or other officer of a corporate society that is an applicant for, or holder of, a class 4 operator's licence: (ii) is the chief executive (or performs that function) of a corporate society that is an applicant for, or holder of, a class 4 operator's licence: (iii) exercises significant influence in the management of a corporate society that is an applicant for, or holder of, a class 4 operator's licence; and (b) in relation to a class 4 venue licence,— (i) a venue manager: (ii) venue personnel: (iii) a venue operator: [(iv) a person who is a director, chief executive, or senior manager of a venue operator:][(iva) any other person whom the Secretary reasonably believes to have a significant interest in the management, ownership, or operation of a venue operator, except for the following persons holding office, elected, or appointed under the Sale of Liquor Act 1989: (A) a member of a licensing trust elected in accordance with sections 191 to 194 of that Act or appointed under section 195 of that Act; or (B) a trustee of a community trust holding office under section 219Q of that Act or elected in accordance with section 219R of that Act or appointed under section 219U of that Act.](v) a person contracted to service gambling equipment at a class 4 venue; and (c) in relation to a licensed promoter's licence, a person who— (i) is a director of, or holds office in, a company that is an applicant for, or holder of, a licensed promoter's licence:(ii) is the chief executive (or performs that function) of a company that is the applicant for, or holder of, a licensed promoter's licence: (iii) exercises significant influence in relation to a natural person who is the applicant for, or holder of, a licensed promoter's licence[42] As can be seen the definition of a key person is very wide. There can be no doubt that if Mr Turner and Ms Spicer are key persons then given they have either conceded or been found to be unsuitable key persons as recently as the end of March 2010 a refusal to grant a venue licence was virtually inevitable. Certainly assessing the plaintiff's strength of case on that basis is unlikely to point toward an interim order. [43] All the evidence in my view points toward Ms Spicer and Mr Turner being key people within the definition in the Act and that the defendant's assessment was correct. [44] The circumstances of the transfer of the shares in the company to Mr Flutey are to say the least somewhat suspicious. Mr Flutey did not seem to understand at the time of his interview by the departmental inspectors exactly how the transaction was made up. For example, it was clear at the initial interview that he said he had not paid for the assets of the company. However when he swore his affidavit he said his $100 purchase of the shares included all the company assets. There was no evidence as to how the substantial debts of the company were dealt with. Mr Flutey had little understanding of the sale process. [45] No explanation was given as to how or under what circumstances the shareholding in the company was sold by Ms Spicer to Mr Flutey while the company appears to be significantly insolvent. As Mr Flutey identified the shares were virtually worthless. The assets of the company were some $35,000 and the liabilities over $260,000. Nor was it satisfactorily explained how Mr Flutey was going to take on responsibility for that indebtedness.[46] The only employees at The Crossing were to be Mr Turner, Ms Spicer and Lee-Ann Haereroa. No other employees are mentioned. Lee-Ann was to be the venue operator and manager. She is also the cook. Whoever is operating the bar will therefore inevitably have significant involvement in the gambling side of the business. [47] Nor is it explained how Lee-Ann would be available throughout the opening hours of the business. The application indicates that on six days a week the business will be open for 12½ hours each day and on the seventh 16½ hours. There is obviously no possibility of Lee-Ann being present throughout this time. That will therefore inevitably leave one or both of Mr Turner and Ms Spicer in sole or joint charge of the premises for significant periods. [48] Mr Flutey did not propose to operate the business himself. Indeed he made it clear that he would not be involved in the management of the business at all. He does not seem to have any experience in running a bar/restaurant/gaming facility. There was no affidavit from the venue manager explaining how she proposed to carry out her task nor as to how it was proposed that Ms Spicer and Mr Turner could avoid having anything to do with the gambling side of the business. [49] Given the circumstances detailed above it must have been obvious to Mr Flutey that for the business to function Ms Spicer and Mr Turner would have to play an important role. During the course of the investigation into the application Mr Flutey was told that Ms Spicer and Mr Turner were prohibited as key persons. Mr Flutey knew that the involvement of Ms Spicer and Mr Turner in the business as key people would almost inevitably result in the refusal of the licence. After all a licence had previously been cancelled because of their involvement and further applications made by them had been refused on the same basis. Mr Flutey therefore could have been in no doubt whatsoever as to the likely result of involving Ms Spicer and Mr Turner in the business if their involvement was as "key people".[50] Now to the alleged failure to take into account relevant considerations. The fact that TCKL had on the face of it sold all of its shares to Mr Flutey and that neither Spicer nor Turner were directors or shareholders in the context of the consideration of the defendant was hardly the point. The fact that the plaintiff described them as "merely employees" again was irrelevant. The test was whether or not in terms of the legislative definition they were "key persons". [51] This information illustrates the probability that Ms Spicer and Mr Turner were likely key persons in the application for a venue licence. The Commissioner's approach therefore seems correct. On this aspect of the case therefore it cannot be said the plaintiff has a good arguable case. [52] As to an allegation of taking into account irrelevant considerations. The previous dealings by Ms Spicer and Mr Turner and their attempt to try and obtain a further gaming licence and the knowledge of Mr Flutey about the circumstances of his own purchase were relevant in deciding whether or not this was a genuine purchase or an attempt to hide or disguise the involvement of Mr Turner and Ms Spicer in the premises. The plaintiff does not appear to have an arguable case on this point. [53] Finally, the plaintiff says that it should have had an opportunity to be heard in relation to the allegation that Mr Turner and Ms Spicer were key persons before the defendant made its final decision. The defendant's failure to give that opportunity was a failure of natural justice, the plaintiff says. [54] It must have been obvious to Mr Flutey the risk he was taking in employing Ms Spicer and Mr Turner where they were key persons and in failing to tell the Department he had employed them. The plaintiff therefore must have understood through Mr Flutey that Mr Turner and Ms Spicer were key persons. Mr Flutey chose not to reveal their true involvement in the operation of the venue. [55] Section 67(2) identifies the obligations of the defendant when it decides to refuse an application for a new venue licence ([37]).[56] Section 75(1) relates to applications for a renewal of an existing licence. It provides:75 Procedure for suspending, cancelling, or refusing to amend or renew class 4 venue licence(1) If the Secretary proposes to suspend, cancel, or refuse to amend or renew a class 4 venue licence, the Secretary must notify the corporate society or, if there is a venue agreement, the parties to the agreement, and the venue manager of— (a) the proposal to suspend, cancel, or refuse to amend or renew the licence; and (b) the reason for the proposed suspension, cancellation, or refusal; and (c) their rights, and the procedure to be followed— (i) before the suspension or cancellation takes effect; or (ii) as a result of the refusal to amend or renew the licence.[57] Pursuant to s 75(1) the Department must express a tentative view of the renewal application and invite submissions from the existing licensee. No such requirement is identified for new applications in s 67. Thus the statutory regime for new licences (as here) does not require the defendant to express a tentative view (with reasons) of the application for response before final resolution. For a new licence the process involves an application, an investigation during which the Department may seek clarification from the applicant, and a decision. Thus there was no statutory obligation on the defendant to refer their conclusion that Mr Turner and Ms Spicer were key persons to Mr Flutey before reaching a decision on the licence application. [58] This was a late application by the plaintiff for a licence which effectively created time pressure and together with a subsequent threat of legal proceedings meant in any event that there was simply no real opportunity to refer the Department's view to the applicant before the final decision. The applicant waited three and a half months after the licence was cancelled to make an application for a new licence. The defendant had to undertake investigations into its suitability for a licence. It could hardly expect an immediate response. I do not see, in thecircumstances, that taking eight weeks to investigate and reach a decision, was at all untoward. Then in mid September the applicant threatened the Department with proceedings requiring it to make a decision on the application. Given these factors I do not consider there is a strong arguable case of a failure of natural justice. [59] Overall therefore I assess the substantive case for the plaintiff as weak. There are two further matters on the balance of convenience. [60] Firstly, this judgment has been given on the assumption that the six month period referred to in s 92(1)(b) of the Act continues to run even where there is an application as here for a new licence. I heard no argument on that point in any depth. Given the result of this application I have advised counsel that I would be prepared to hear argument on that point and give a ruling. If time is suspended under s 92(1)(b) when an appeal from a decision of the defendant or an application for a new licence is made then the plaintiff is still within time to protect its interest in an 18 gaming machine venue licence by an appeal to the Commission. [61] The other aspect relates to public interest issues. In many ways the plaintiff is the victim of its own lack of assessment of its circumstances and timely approach. Mr Flutey may wish to provide employment for Mr Turner and Ms Spicer. But attempting to do so in the context of a venue gaming licence where they had been identified as unsuitable people is obviously risking rejection of a venue licence application. [62] Secondly, ordinarily, it is inappropriate for a Court to direct an administrative authority given the power by Parliament to grant such a licence. Also it is generally inappropriate for a Court to effectively bypass legislative provisions by the kind of order sought by the plaintiff here. In making these comments I acknowledge however I have directed the issue of such a licence in other cases.[63] In First Sovereign Trust & Anor v The Secretary for Internal Affairs,3 I considered a broadly similar situation. The important facts in First Sovereign were however significantly different to the current circumstances. There the plaintiffapplied for a venue licence for premises within days of the loss of its venue licence in late September 2004. It also wished to protect the right of the premises to have 18 gaming machines. Thus it needed to have the decision made and any appeals dealt with by the end of March 2005. [64] The Secretary notified the plaintiff in early March of its tentative view and gave it 20 working days to respond. That would have taken the process beyond the six month period in s 92(1) of the Gambling Act. I considered that there was a strong arguable case and that delay had been the defendant's. I found there was strength in the plaintiff's claim that the defendant was not prepared to objectively assess the plaintiff's application. As can be seen therefore First Sovereign was entirely dependent on its own facts. [65] In summary therefore: a) the status quo favoured the plaintiff to protect the "right" to 18 gaming machines until the appeal to the Commission was heard and a decision given; b) the plaintiff had a weak rather than a strong arguable case: i) the defendant was likely correct that Mr Turner and Ms Spicer were key persons; ii) it is probable no irrelevant material was considered; iii) it is probable no relevant material was ignored;3 First Sovereign Trust & Anor v The Secretary for Internal AffairsHC Wellington CIV 2005-485-512, 22 March 2005.iv) in the circumstances there was not a strong case that the defendant breached natural justice; c) the balance of convenience and overall issues favoured the defendant. The plaintiff was responsible for most of the delay; d) this case was factually different than First Sovereign Trust; e) whether an application for a new licence covered by a pre 2001 class 4 venue licence suspends time for the purpose of s 92(1) remains to be resolved. [66] For those reasons therefore I concluded this was not an appropriate case to make the interim order sought.Costs[67] The defendant has 14 days within which to file an appropriate memorandum and the plaintiff a further 14 days in response. _______________________________ Ronald Young JSolicitors: M A J Elliott, PO Box 825, Christchurch, email: me@marcuselliott.com S T Cottrell, GCA Lawyers, Level 6, 764 Colombo Street, Christchurch email: shaun@gcalawyers.com K Muller, Crown Law Office, PO Box 2858, Wellington, email: kristina.uller@crownlaw.govt.nz