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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Victor Chandler International v Customs & Excise & Anor [2000] EWHC Admin 299 (29 February 2000) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2000/299.html Cite as: [2000] 1 WLR 1296, [2000] EWHC 299 (Admin), [2000] EWHC Admin 299

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VICTOR CHANDLER INTERNATIONAL v. COMMISSIONERS OF HM CUSTOMS & EXCISE and TELETEXT LTD [2000] EWHC Admin 299 (29th February, 2000)

HC 999 02539
IN THE COURT OF APPEAL
Before: THE VICE-CHANCELLOR: The Rt. Hon. Sir Richard Scott
The Rt. Hon. Lord Justice Chadwick
The Rt. Hon. Lord Justice Buxton
B E T W E E N

37. The Betting and Gaming Duties Act 1981 - as its short title suggests - was enacted to impose excise duties on betting and gaming within the United Kingdom. The provisions relating to betting duties are contained in Part I of the Act. The duties are imposed by section 1(1) (general betting duty) and section 6(1) (pool betting duty). Sections 1(2) and 7(1), respectively, set the amounts of those duties. Sections 2 and 8 provide by whom the duties shall be paid and from whom they shall be recoverable. It is in that context that section 9 of the Act makes it an offence (a) to conduct business in the United Kingdom for the negotiation receipt or transmission of bets made with bookmakers, totalisators or promoters outside the United Kingdom (see section 9(2)); (b) knowingly to issue, circulate or distribute in the United Kingdom advertisements or other documents inviting or otherwise relating to such bets; or (c) being a bookmaker within the United Kingdom, to make or offer to make any such bet with a bookmaker outside the United Kingdom. The obvious purpose of section 9 is to protect the revenue derived from betting within the United Kingdom by making it an offence - subject to the saving provision in section 9(5) - to carry on or take part in activities within the United Kingdom, described in section 9(1), which are calculated to promote, encourage or facilitate the making of bets outside the United Kingdom.

38. What, then, did Parliament intend to achieve by the words enacted as paragraph (b) of section 9(1)? The answer is clear enough. Parliament intended to protect the revenue derived from betting within the United Kingdom by making it an offence to solicit bets to be made with persons outside the United Kingdom. But it is equally clear, in my view, that Parliament recognised that it was unnecessary - and would probably be impracticable - to attempt to prohibit all forms of solicitation. The prohibited conduct is limited to solicitation by means of the issue, circulation or distribution in the United Kingdom of "any advertisement or other document". The words used in section 9(1)(b) indicate, as it seems to me, that Parliament had it in mind to prohibit only the dissemination of information by the issue, circulation or distribution of something on or in which that information was contained.
39. I share the doubt, expressed by the Vice-Chancellor, whether a purely oral invitation to place bets with an off-shore bookmaker would be within the prohibition. It seems to me unlikely that Parliament would have chosen, in 1952, to describe an oral invitation - whether delivered face to face or over the telephone - as the issue, circulation or distribution of an advertisement. Some support for that view is found in the saving provision in section 9(5) of the 1981 Act - in particular, in the words "who gets . . . any advertisement . . . given or sent to him". And, if the words were not apt to describe a purely oral invitation in 1952, they have not become so as a result of technological advance. But it is not necessary to decide that question.
40. An obvious example of the dissemination of information by the issue, circulation or distribution of something on or in which that information is contained is the newspaper advertisement. Another is the mail-shot. There can be no doubt that both would have been within the "true original intention" of Parliament when the section was first enacted in 1952. A further example - perhaps less obvious, but equally free from doubt - is the distribution of a cinematograph reel, with or without an accompanying soundtrack. Nor is it in dispute that the physical distribution in the United Kingdom of a tape or video cassette, a compact disc or a 3½ inch floppy diskette on which information inviting or otherwise relating to the making of bets with an off-shore bookmaker is stored would be within the prohibition.
41. The reason why the respondent does not dispute that the physical distribution of, for example, a compact disc or floppy diskette would be within the prohibited conduct is because it accepts - as, in my view, it has to accept - that a disc on which information is stored in electronic form must, in the age in which we now live, be treated by the law as a document. If authority be needed for that proposition it can be found in the judgment of Mr Justice Vinelott in Derby v Weldon (No 9) [1991] 1 WLR 652, 657E-658C. His analysis is, I think, instructive in the present context. After referring to the decision of Mr Justice Walton in Grant v Southwestern and County Properties Ltd [1975] Ch 185 - in which it had been held that a tape recording of a telephone conversation was a document within the meaning of Order 24 of the Rules of the Supreme Court 1965 - Mr Justice Vinelott went on, at page 658A-C:
". . . there can be no distinction in principle between the tape used to record a telephone conversation in Grant v Southwestern and County Properties Ltd, which was an ordinary analogue tape on which the shape of sound waves is, as it were, mimicked by the pattern of the chemical deposit on the tape, and a compact disc or digital tape on which sound, speech as well as music, is mapped by co-ordinates and recorded in the form of groups of binary numbers. And so no clear dividing line can be drawn between digital tape recording messages and the database of a computer, on which information which has been fed into the computer is analysed and recorded in a variety of media in binary language".
42. In Alliance & Leicester Building Society v Ghahremani and others [1992] 32 RVR 198, at page 199, Mr Justice Hoffmann rejected a submission that Mr Justice Vinelott's view as to the scope of the word "document" was restricted to questions of discovery under the rules of court. He applied the extended meaning to the question whether the deliberate deletion of information stored on the disc of an office computer was a contemptuous breach of an order restraining a solicitor from destroying or altering any documents relating to a conveyancing transaction. In Rollo v H M Advocate [1997] Scots Law Times 958, the High Court of Justiciary took the same view in relation to the meaning of the word in the context of the seizure of an electronic notebook under the powers conferred by section 23(3)(b) of the Misuse of Drugs Act 1971.
43. The Judge accepted that the database of the Teletext central editing system - in so far as it stored, in electronic form, the relevant information transmitted to it from Gibraltar by the respondent - was a document for the purposes of section 9(1)(b) of the Act; and further, that the Teletext remote databases - again, in so far as they stored the information transmitted on from the central editing system - were documents for those purposes. But it was not enough that, under the proposed arrangements, Teletext Ltd would have documents containing relevant information in its possession; as, clearly, it would have. It was necessary, in order to fall within the prohibition in section 9(1)(b) of the 1981 Act, that the documents should be in the possession of Teletext Ltd as the result, or for the purpose, of issue, circulation or distribution in the United Kingdom. The relevant question, therefore, was whether the transmission of information to the database of the central editing system - or the onward transmission of that information to the remote databases - was properly to be regarded as the issue, circulation or distribution of a document.
44. The judge answered that question in the negative. He observed, at paragraph 11 of his judgment, that:
"Information of itself cannot constitute a document, and the transmission of information of itself cannot constitute the transmission of a document".
He returned to the same point at paragraph 14:
"As I have already held information alone cannot constitute a document: only the physical object which contains information can do so: and accordingly the transmission of information (whether or not contained in a document) cannot of itself constitute the transmission of a document".
At paragraph 15, the judge said this:
"The transmission from VCI to the Teletext central editing system and from the Teletext editing system to the Teletext remote databases, is transmission in the form of electronic impulses of information which the recipient (through his own equipment) inscribes on his own document. The analogy in this case (as in the case of a facsimile message and e-mail) is not with the sending of a computer disc, but with the recipient (having been furnished by the transmitter with the means of doing so) taking down in shorthand or transcribing the message from the transmitter or making a copy of the transmitter's document.
. . .
The statutory language is not apt to embrace what modern technology can achieve, namely the dissemination in non-documentary form of information which on receipt is reduced to written form".
45. In my view the judge reached the wrong conclusion. The error in his reasoning, as it seems to me, was to regard the transmission of electronic impulses from one electronic database to another as the transmission of "information" as if that were something distinct from the transmission of a "document". The true analysis is that the transmission of electronic impulses is simply that: it is nothing more nor less than the transmission of electronic impulses. It is the combination of those impulses within co-ordinates and groups that may convey information. If the impulses are transmitted to a system which is capable of receiving and storing them in the same, or some derivative, combination - so that they can be analysed or "read" - then it may be said that a document is created in or on the recipient database. It is as apt to describe the process as the transmission of a document as it is to describe it as the transmission of information. Indeed, it is now a matter of common parlance to talk of "sending a document" from one computer to another. But what is really happening is that, by the transmission of electronic impulses in a combination, or "language", which the recipient system can read, the sender is creating a document on the recipient database.
46. I do not, myself, find it of assistance to ask whether the process which I have described is more closely analogous, on the one hand, to the sending of a computer disc or, on the other hand, to the transcription of an oral message by a shorthand writer. Both supposed analogies seem to me to be some distance away from what, on a true analysis, is actually happening when material is transmitted in electronic form from one database to another. The right question is to ask whether the process which I have described falls within the conduct prohibited by section 9(1)(b) of the 1981 Act; that is to say, whether, having regard to the true intention of Parliament when that section and its predecessors were enacted, that process can aptly be described as the issue, circulation or distribution of any advertisement or other document. I have no doubt that that the answer to that question is "yes".
47. I agree that this appeal should be allowed.

LORD JUSTICE BUXTON:
48. I agree that this appeal should be allowed.
49. When section 5(1)(b) of the Finance Act 1952 spoke of "advertisement or other document", the phrase carried forward into section 9(1)(b) of the Betting and Gaming Duties Act 1981, it did not in my view intend to limit the meaning of the common and popular word "advertisement" by confining it to advertisements in documentary form. Stronger wording would have been required to achieve that end. The reason for the wording actually used would seem to be that draftsman needed to address not only advertisements; but also documents that were not advertisements, but which nonetheless invited or related to the making of (in the 1952 legislation) pool bets other than through promoters in the United Kingdom. It was a compressed, but in my view comprehensible, form of words to refer to the latter case by the expression "other document". Had the word "other" been omitted, it might have appeared that the category of advertisement excluded anything that was also a document: which was plainly not the intention. Nor can I see any sensible reason why, in a provision intended to prevent the advertisement of foreign betting in order to protect revenue from duty on onshore betting, any category of activity that can properly be described as an advertisement should have been omitted.
50. Nor am I persuaded by the argument that the references to "issues, circulates or distributes...or has in his possession" in section 9(1)(b); and to "given or sent to him" in section 9(5); cannot relate to advertisements in a non-documentary form. These expressions extend over the whole of the subject-matter of section 9, but that subject-matter expressly contains a number of different sub-sets: advertisement or other document. The expressions therefore do not as a matter of construction necessarily apply in every case addressed by the section; and the present argument could thus only be a good one if, in relation to the non-documentary advertisement in issue in this case, the teletext transmission arranged by VCI, they could not be applied at all. But that is not so. By the plain meaning of language, the teletext transmission is "issued" when it is shown to the public. That advertisement or emanation of the advertisement may never be circulated, distributed, given or sent. That however does not matter, because for this construction point to be made out VCI have to show that it is impossible to apply any of the wording of section 9 to the particular advertisement that is argued to fall under it; and that they cannot do.
51. I therefore consider that the advertisement contained in the teletext transmission falls under the provisions of section 9(1)(b).
52. That strictly speaking renders it unnecessary to consider the arguments as to whether, leaving aside that transmission, there has nonetheless been issued, circulated or distributed a document inviting or otherwise relating to the making of offshore bets. However, I would answer that question also in the affirmative.
53. Mr Oliver expressly accepted the contention in the Customs and Excise's skeleton argument that
"VCI's computers, Teletext's central editing system and remote databases, and the equivalent databases maintained by Skytext, so far as they held relevant information, all constituted "documents"".
54. But, he contended, those documents were merely hardware, that did not move anywhere; so they could not be said to be circulated, etc. The only thing that was circulated was information, by means of electronic impulses; and as the judge had rightly held, information was not in itself a document.
55. I of course agree that "information" cannot simply be substituted for "document". However, just as, as is conceded, the range of physical operations addressed by the word "document" is not constrained by the physical nature that documents took in 1952, so we are entitled, and indeed bound, to consider the appropriate application of the concept of circulation, etc, of a document in the light of current practice and technology. When documents were restricted to paper form, it was perfectly natural to say that, for instance, a letter had been circulated when what had happened was that multiple copies of the letter had been produced and then distributed. It would have been pedantic to insist that what had been distributed was something different from "the letter". I see no relevant difference between that process and that with which we are concerned in the present case, where there is produced on, say, Teletext's computer a document that is an exact copy of the document that is on VCI's computer. Nor can I see any relevant difference between that process and the transmission of "a document" by fax: where what in fact occurs is that the original document remains in the possession of the sender, but is copied by electronic means on to the receiving fax machine. It would, I think, be very surprising if it were not possible to hold that a document is circulated or distributed by being sent out by fax.
56. By normal processes of construction, therefore, the documents in this case are circulated and distributed, by being electronically reproduced. And for the reasons given by the Vice-Chancellor in his judgment, that conclusion is not precluded just because the provision under construction can be characterised as being penal in nature.