The injunction requiring ACTTAB to take and process bets from the Vanuatu-based Vitab Ltd was continued until further order in the Federal Court yesterday sending TAB dividend payments into a tizz.
The injunction is likely to stay in force for at least two weeks.
The link between ACTTAB and the Victorian superpool remained cut yesterday and will remain cut while ACTTAB continues to take bets from Vitab, as the court order demands.
This has resulted in erratic dividends being paid by ACTTAB due to the smallness of the pool. An example at the Randwick meeting on Monday was a horse quoted as paying 12/1 moving to 5/1 after a punter put $50 on. (see table for examples of other dividends paid yesterday).
Vitab is claiming a permanent order to continue its links with ACTTAB and may claim damages later anyway because ACTTAB has failed to maintain a link with a large Australian betting pool. If the link to the ACT is cut Vitab principals say they will sue for $50 million.
Vitab says it wants to keep the link with the ACT because its betting licence in Vanuatu would be threatened if it did not have at least some link with an Australian TAB.
Counsel for ACTTAB, Doug Williamson, QC, accused Vitab of putting tactical pressure on ACTTAB for commercial reasons in bringing its action for an injunction, knowing it would threaten ACTTAB’s operations because ACTTAB would be prevented from linking with Victoria or NSW in order to provide a large enough pool to ensure large bets did not distort dividends.
He said Vitab’s proper course was to seek damages.
The commercial essence of the agreement was a link with the Victorian or some other large pool. That was now gone.
“”It is flying in the face of commercial reality of the history of the agreement to confine it to the ACT pool,” he said. “”This is why we say this is a tactical proceeding.”
The balance of convenience required an end to the injunction. Vitab’s undertaking to pay any resulting damages should it lose was not satisfactory.
“”Vitab is literally a $2 company registered in Vanuatu,” he said.
Vitab had taken “”a commercial risk that the Victorian link would not fall over.” It had, and its remedy was an action for damages.
Justice Alan Neaves said it seemed there was a strong case for damages and that being the case he questioned whether the court could simply condone a breach of contract and assess the damages rather than insisting that ACTTAB comply with a contract that it had consciously entered into.
He responded to a suggestion by Mr Williamson that Victoria pulling the pin was not ACTTAB’s fault by saying: “”In one sense it was. If ACTTAB had not signed the Vitab contract this would never have happened.”
He said there was a public-interest element in ACTTAB’s loss because its returns to government would fall, “”so the taxpayers of Canberra have to pick up the difference”.
Justice Neaves reserved his judgment on whether the temporary injunction should stay in force pending a trial, but if a trial could be arranged early enough, he would let the injunction stand till then without making a judgment on the temporary issue. The parties and the judge toyed with various trial dates, the most likely being for several days from either August 16 or 29. The damages issue would be tried later.
It is not very comfortable position for the ACT Government which faces an election in February. It faces two very public trials during which its side will attack Vitab and the strength of the Vitab contract, the two very things it had described as sound and in the best interests of the ACT just a few months ago.
Already ACTTAB’s counsel has attempted to belittle Vitab’s financial standing and questioned tactical motives.