 House of Lords |
Session 1997-98
Publications on the Internet Judgments |
| Judgments - Regina v. Burt & Adams Ltd.
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(RESPONDENTS) (ON APPEAL FROM THE COURT OF APPEAL (CRIMINAL DIVISION)
LORD GOFF OF CHIEVELEY
My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Hope of Craighead. For the reasons he gives I would dismiss the appeal and answer the question in the negative.
LORD LLOYD OF BERWICK
My Lords, I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Hope of Craighead. I agree with his reasons, and conclusion, and gratefully adopt his description of the two types of amusement machine with which this case is concerned. For convenience I set out here section 34(3) of the Gaming Act 1968, so far as relevant:
(b) a non-monetary prize or prizes of a value or aggregate value not exceeding £6 or a token exchangeable only for such a non-monetary prize or such non-monetary prizes; (c) a money prize not exceeding £3 together with a non-monetary prize of a value which does not exceed £6 less the amount of the money prize, or a token exchangeable only for such a combination of a money prize and a non-money prize; . . . In count 2 of the indictment the defendants were charged with contravening section 34(3)(b) on the ground that a successful player on the Crane and Grab machine was entitled to receive "an article benefit or advantage" in excess of what is permitted under the subsection, namely, "an article to be used as a token which could be exchanged with other such tokens for a non-monetary prize to a value in excess of £6." The article in question was a teddy bear worth £6 or less. At an early stage of the appeal Mr. Goldring Q.C., for the Crown, was asked what would be the position if the successful player, having won a brown teddy bear, was allowed to exchange it for another teddy bear of different colour but the same value. Mr. Goldring replied that in such a case the police would be unlikely to prosecute. One was glad to hear it. By the end of the argument he had conceded, correctly in my view, that the right to exchange one teddy bear for another of the same value is not caught by the subsection at all. For the right to exchange one non-monetary prize for another non-monetary prize of the same value does not confer a "benefit or advantage" in excess of what is permitted under the subsection. The sole question therefore is whether the right to exchange two small teddy bears worth £6 each for one large teddy bear worth £12 or (if the player was sufficiently persistent) 400 teddy bears for a battery operated car of equivalent value, contravenes the section. In the judgment delivered by Kennedy L.J. which I for my part find entirely convincing, the Court of Appeal has held that this form of "trading up" (as it is called) is not unlawful. It is a practice which has prevailed for many years, apparently without objection. Parliament has had more than one opportunity to say in plain terms, if it had so wished, that the practice of trading up is unlawful. It is difficult to see why the practice should be regarded as contrary to the legislative policy underlying Part III of the Gaming Act 1968, since there is nothing to stop young people spending all day in the amusement arcade winning prizes of £3 on the Pusher machine and then spending the accumulated proceeds as they wish. For all these reasons it may be wondered why the Gaming Board should have seen fit to challenge the decision of the Court of Appeal before your Lordships. But since your Lordships are not of one mind, I add a short judgment of my own in support of the judgment below. The prosecution case on count 2 depended on showing, as a first step, that the small teddy bear was either "a token" when it emerged from the Crane and Grab machine, or at least became a token or was used as a token when it was exchanged with other "tokens" for a larger teddy bear. If so, it was not exchangeable only for another small teddy bear, and the defendants would be in breach of section 34(3)(b). It is important to notice that "token" is not defined in the Act. There is no deeming provision by virtue of which the word "token" is deemed to mean or include anything other than its ordinary meaning. Section 34(3)(b) itself distinguishes between non-monetary prizes, such as teddy bears, and tokens exchanged for non-monetary prizes. In other provisions of the Act it is clear that "token" is used in its ordinary sense. Thus section 26(1)(b) refers to "a slot or other aperture for the insertion of money or money's worth in the form of cash or tokens." But it was argued that since teddy bears have a points value, and are exchangeable according to a fixed scale, they are tokens for the purposes of section 34(3)(b). I do not agree. Tokens are frequently exchangeable for goods. But it does not follow that all exchangeable goods are tokens. The man who is given a tie for Christmas, and is told that it can be exchanged at Harrods within 30 days, receives a tie and not a token. Parliament could have provided that exchangeable articles, such as teddy bears, are to be deemed to be tokens for the purposes of the Act. But it has not done so. In my judgment "token" in section 34(3)(b) is used in its ordinary sense, and does not include an exchangeable teddy bear. The only other provision relied on by Mr. Goldring was section 34(8) which defines a non-monetary prize as follows:
The argument, as I understood it, was that since the teddy bear could be exchanged for another teddy bear and since the second teddy bear would be worth something (with which I would agree) it must follow that the second teddy bear would be money's worth within the meaning of section 34(8) and therefore that the first teddy bear would be excluded from the definition of non-monetary prize. It must therefore be a token. I would hesitate long before attaching criminal liability to such a convoluted argument. If Parliament had intended to prohibit the exchange of non-monetary prizes for other non-monetary prizes of the same value, by deeming such prizes to be "tokens," it would surely have said so in plain words. But in any event the argument leads nowhere. Section 34(8) is, as Mr. Beloff pointed out, an anti-avoidance provision. Its purpose is to inhibit circumvention of the £3 limit on cash prizes, by preventing non-monetary prizes being turned into cash or the equivalent of cash. There is nothing in the subsection which prohibits the exchange of one non-monetary prize for another non-monetary prize. Nor is there any reason why there should be. Indeed it would make nonsense of the definition if all non-monetary prizes were included in the meaning of money's worth; for the whole purpose of the definition is to distinguish between non-monetary prizes on the one hand and money and money's worth on the other. Money's worth in section 34(8) must therefore be given a narrow construction. It means the equivalent of money, as it does in section 26(1)(b). So far from lending support to the argument that exchangeable teddy bears are tokens for the purpose of section 34(3)(b) the definition in section 34(8) points in the other direction. Since in my view exchangeable teddy bears are not tokens in themselves, nor used as tokens when exchanged for other teddy bears of the same value, the prosecution's argument on Count 2 never gets off the ground. I turn to Count 3. It relates to the Pusher machine, and is said to be covered by section 34(3)(c). The first question is whether the red and black plaques worth 20 and 100 points respectively are "tokens". Contrary to Mr. Beloff's submission, but in agreement with all your Lordships, it seems obvious that they are. The plaques have no intrinsic value. Mr. Beloff's submitted that they are non-monetary prizes. This is, with respect, almost as far-fetched as Mr. Goldring's submission that teddy bears are tokens. Granted that plaques are tokens, the next step was for the prosecution to show that the right to accumulate plaques as tokens meant that the individual token was not exchangeable only for a prize or prizes worth £6 or less. In conjunction with other plaques it could be exchanged for a prize worth more than £6 depending on how many plaques the player had won. The fallacy in this argument is that it ignores the language of section 34(3). The limit of £6 (or £3 cash) applies only "in respect of any one game." The right to obtain a bear worth £12 is not "a benefit or advantage" in respect of any one game, but a benefit or advantage in respect of not less than two games. There is nothing in section 34(3)(b) or elsewhere to prevent the accumulation of cash. Nor is there anything to prevent the accumulation of tokens. "Trading up" in tokens, whereby the player receives one larger prize instead of several smaller prizes of the same value is not unlawful. Nor is "trading up" in teddy bears. It is said that this construction would allow wholesale evasion of the Act. While a single plaque might be advertised as being worth only £6, the rules might provide for two or more plaques together to be worth not £12 but £100 or £1,000. The subsection would not be infringed because in respect of any one game considered on its own the limit would not have been exceeded. Putting aside the commercial implausibility of this example, it seems clear enough that the scheme would not work. It would meet with the same answer as that given by the House in Cronin v. Grierson [1968] A.C. 895. It was held in that case that the more favourable odds enjoyed by the player after winning the jackpot was a benefit or advantage in excess of that permitted by section 2(2) of the Betting Gaming and Lotteries Act 1964 "in respect of any playing of the game", namely, the game in which he won the jackpot. By the same reasoning the increased value of the second plaque in combination with the first plaque would be held to be a benefit received by the player in respect of the game in which he won the first plaque. So I see no scope for evasion. Finally it was said that the right to exchange a single plaque for a single teddy bear is itself a benefit. But if I am right that a plaque is a token, this is the very benefit which is permitted by the section. For the same reason the right to exchange a single teddy bear for another teddy bear of equal value does not infringe the Act, as indeed Mr. Goldring conceded. I would dismiss the appeal.
LORD NOLAN
My Lords, I have had the advantage of reading in draft the speeches prepared by my noble and learned friends, Lord Hope of Craighead and Lord Hoffmann. I agree with Lord Hope in concluding that the appeal should be dismissed and save in one respect I agree with the reasons by which he arrives at that conclusion. The respect in which I differ relates to the statutory role of the teddy bears or other soft toys and of the plaques which are the subject of counts 2 and 3 of the Indictment. Like Lord Hoffmann, I consider them to be tokens within the meaning of section 34(8). Let me repeat the words of the subsection, so far as material:
The teddy bear or other soft toy brings to the player who wins it the right of exchange (to the value of 100 points) for another prize. It shares this characteristic with the red plaques (20 points) and the black plaques (100 points) which are the subject of count 3 and which, to my mind, are clearly tokens. It is said, however, that the teddy bear is distinguishable from the plaque because it has an intrinsic value and is designed to give pleasure to its owner. But a book token has an intrinsic value in the book market which is equal to its face value, and is designed to give its owner the pleasure of freedom of choice. In determining whether or not an article is a token I do not think that its appearance, or intrinsic value, or suitability for different kinds of use can be decisive. For the cold-blooded and unsentimental purposes of the subsection, as it seems to me, a token is simply an article which can be used as a means of exchange for money or moneys worth. Another argument put forward on behalf of the respondent is that neither the soft toys nor the plaques are tokens within the meaning of the subsection because the non-monetary prizes for which they may be exchanged are not money's worth within the meaning of Part III of the Act. I cannot accept this argument. The prizes are indisputably to my mind, money's worth within the ordinary meaning of those words. They are worth money. Section 34(3) recognises their character as such by placing a limit upon their permissible monetary value. To read section 34(8) in such a way as to prevent articles with an intrinsic value from qualifying as tokens, and as excluding non-monetary prizes from the concept of money's worth would seem to me to place an unduly restrictive meaning upon the words used. But whether the soft toys and the plaques are properly regarded as non-monetary prizes or as tokens, the "trading up" question still has to be answered. As I have indicated, in company with the majority of your Lordships I would answer it in favour of the respondent. For it is common ground that the soft toys or plaques, including the rights of exchange which they give, are worth no more than £6. Therefore, if properly regarded as non-monetary prizes, they are within the limit. What if they are properly regarded as tokens? Here again the appellant fails in my judgment because no single token carries the right of exchange for non-monetary prizes worth more than £6. The fact that two tokens can together be exchanged for a non-monetary prize or prizes worth £12 is neither here or there. The exchange value of each token is still no more than £6. Strictly I suppose it might be argued that in this instance the token is not so much exchangeable for a non-monetary prize worth £6 as for an undivided share in half of a non-monetary prize worth £12: but I would see no harm and no great difficulty in reading "non-monetary prize" to include an undivided share in a non-monetary prize provided that the £6 limit of value per token is not exceeded. Suppose, however, two tokens together could be exchanged for a non-monetary prize worth £20, £200, or £2,000. In my judgment, the section would then be infringed. That is because the token could not be described as "exchangeable only" for £6 in money's worth of non-monetary prize. So to describe it would ignore the possibility of its being exchanged, in combination with another token, for more than £6 worth of non-monetary prize. This possibility is a benefit which contravenes both the letter and spirit of the sub-section, since it improves the odds in favour of the persistent gambler. But there is no such additional possibility or benefit in the present case. For these reasons I concur with the answer proposed by Lord Hope of Craighead to the question before your Lordships on the assumption which his Lordship makes.
LORD HOFFMANN
My Lords, Gaming machines are regulated by Part III of the Gaming Act 1968. Machines which offer large money prizes can be used only in premises such as licensed gaming clubs to which the public do not have access. But machines which are used, as the Act says "for gaming by way of amusement with prizes," may be used at fairgrounds and amusement arcades to which entry is unrestricted. The term "amusement with prizes" accurately conveys the legislative policy. The machines are primarily for amusement and the prizes are intended only to add some excitement to playing the game. To give effect to this policy, the Act severely restricts both the charges which can be made for playing the game and the value of the prizes which can be won. In the original Act, the maximum charge allowed was a shilling and the maximum prizes which could be won in any game were two shillings in money or something worth less than five shillings. Since then, the values have from time to time been increased by statutory instrument. When the events giving rise to this appeal took place in 1993, the maximum charge was 20p and the maximum prizes were £3 in money and £6 in kind. The limits as to prizes are imposed by section 34(3) of the Act, which reads as follows:
(b) a non-monetary prize or prizes of a value or aggregate value not exceeding [£6] or a token exchangeable only for such a non-monetary prize or such non-monetary prizes; (c) a money prize not exceeding [£3] together with a non-monetary prize of a value which does not exceed [£6] less the amount of the money prize, or a token exchangeable only for such a combination of a money prize and a non-monetary prize; (d) one or more tokens which can be used for playing one or more further games by means of the machine and, in so far as they are not so used, can be exchanged for a non-monetary prize or non-monetary prizes at the appropriate rate." Contravention of any provision of section 34 is an offence: see section 38(6). The respondents, whom I shall call "the company", operate an amusement arcade at Rhyl. It includes two types of machine which have been respectively called the "pusher" and the "crane." The pusher has a moving tray carrying various items which can be dislodged into a chute by coins pushed in by the player. The dislodged items can then be extracted by the player. They include red and black plaques which can be exchanged for items in the company's prize redemption desk. The company allocates a value in points to the items of merchandise available as prizes. For the purposes of exchange, red plaques are worth 20 points and black ones 100 points. Playing the crane involves using a grab to try to pick up a soft toy and drop it into the chute. The soft toys are prizes in their own right which players may keep if they so wish and it is agreed that they are worth less than £6. But prominent notices tell players that they may also be exchanged for merchandise at the prize redemption desk and for this purpose they have the same 100 point value as a black plaque. The novel feature of the company's operations which attracted the attention of the Gaming Board was that they did not require the player to exchange his plaque or soft toy after each game. He could accumulate plaques or toys or both and eventually exchange them for items of merchandise worth considerably more than £6. So, for example, the redemption desk offered items such as television sets and radios which could be exchanged in return for a stipulated number of plaques or soft toys. The Gaming Board took the view that the right to exchange the plaque or toy (together with other such plaques or toys) for an item worth more than £6 gave the player a "benefit or advantage" additional to one of those permitted under the four paragraphs of section 34(3). It instituted a prosecution for infringement of section 34(3). There were three counts, but I need refer only to counts 2 and 3. Count 2 alleged that a player of the crane machine could receive a benefit or advantage other than one permitted under section 34(3), namely "an article to be used as a token which could be exchanged with other such tokens for a non-monetary prize to a value in excess of £6." Count 3 alleged that a player of the pusher machine could receive a similar benefit or advantage. There was no dispute of fact at the trial before His Honour Judge Evans Q.C. An agreed statement was put before him. On those facts he ruled that an offence had been committed and the company thereupon pleaded guilty. The Court of Appeal (Criminal Division) allowed an appeal and quashed the convictions. Against that decision the prosecution appeals. It will be convenient to begin with count 3, because count 2 has an additional complicating feature (namely, the use of a soft toy as a means of exchange) which count 3 lacks. In all other respects, the two counts raise the same issues. I shall therefore defer considering the effect of the additional feature of count 2 until I have dealt with the matters which both counts have in common. The first question is whether the plaques are tokens within the meaning of the Act. Mr. Beloff Q.C., who appeared for the company, said that although the plaque might ordinarily be regarded as a quintessential token, it was deemed not to be by virtue of the definition of a "non-monetary prize" in section 34(8):
Mr Beloff submitted that the plaque could not be exchanged for money or money's worth or used for playing another game. "Money's worth," he said, meant something rather like money and did not include the various items of merchandise at the prize redemption desk for which the plaque could be exchanged. In my view this construction is quite untenable. "Money's worth" is a legal term of art. As Buckley J. said in Secretan v. Hart [1969] 1 W.L.R. 1599, 1603 it is an expression:-
In my opinion, "money's worth" means anything which is capable of being turned into money, such as the items of merchandise for which the plaques could be exchanged. There is nothing in the context of the Act which suggests that it was intended to have any other meaning. The question is, therefore, whether it can be said of such a token that it is "exchangeable only" for a money prize not exceeding £3 (paragraph (a)), a non-monetary prize of a value not exceeding £6 (paragraph (b)) or a money prize not exceeding £3 and a non-monetary prize not exceeding £6 less the amount of the money prize (paragraph (c)). If, besides being exchangeable for one or other of these prizes, the plaque confers some additional "benefit or advantage," section 34 is infringed. It seems to me plain that a plaque won in a single game does confer an additional benefit or advantage, namely, that of being exchangeable, together with other plaques or articles having a value in points, for merchandise of a value exceeding £6. Each plaque carries the advantage of being able to be exchanged together with other plaques for a television, radio, etc. Against this simple conclusion, Mr. Beloff Q.C. offered two arguments. First, he said that the additional benefit or advantage depended upon obtaining further plaques by playing additional games. Therefore the right to exchange plaques for more valuable items could not be said to have been obtained "in respect of any one game". This, in my view, is merely a piece of verbal sleight of hand. If the argument were correct, it would follow that the provisions of the Act could easily be evaded by providing that a single plaque could be exchanged only for, say, £3, but that anyone who obtained two plaques could exchange them for £200 or a television set worth £200. In such a case it could equally be said that £3 was all that could be obtained in respect of any one game. To meet this difficulty, Mr. Beloff deployed his second argument, which was to point out that there was no evidence that the value of any prize divided by the minimum number of plaques needed to secure it was more than £6. Therefore, whatever benefit or advantage might be obtained, it did not exceed the permitted limit. But this argument in my view ignores the language of the Act. It does not say that the value of any benefits or advantages obtained by playing a game should not exceed £6. It says that the only benefit or advantage which a plaque may confer is the right to exchange it for a money prize of £3 or a non-monetary prize worth less than £6 or a combination of both. So far as the plaque confers any additional benefit or advantage at all, it infringes the section. Therefore, unless the right to make an exchange in combination with other plaques is ignored altogether (which leads to the absurd consequences I have just mentioned) it must be unlawful. I turn then to count 2, which is the same as count 3 except that the item which may be exchanged is not a plaque but a soft toy. The only additional question raised by this count is whether the toy is a "token" or a "non-monetary prize". In the case of tokens, the Act is concerned with their exchange value. In the case of non-monetary prizes, the Act is concerned only with their value and not with what can be done with them. The Act contains no definition of a "token", but the scheme of the Act shows that the feature of a token with which Parliament was concerned was its exchangeability as of right for something else. In ordinary life, a typical token is a coin, which by virtue of the rules as to legal tender is exchangeable as payment for goods or services. A token may have little or no intrinsic value (as is nowadays the case with coins) but this is not necessarily the case, although obviously a token which had greater intrinsic value than exchange value would cease to be used as a means of exchange: something which has from time to time happened with coinage. In the context of this Act, therefore, it seems to me that the identifying characteristic of a token must be the right to exchange it for something else. Anything which can be obtained from the machine and exchanged for something else is, for the purposes of the Act, a "token". I do not think it is relevant to consider, as the Court of Appeal did, the analogy of the buyer of a book exchanging it for another, which is not as of right and in any case an altogether different commercial context. Nor am I concerned to decide whether the right to exchange a soft toy for another of the same value (say of a different colour) would make it a "token." Since ex hypothesi both are worth less than £6, the point is academic. In this case, however, the company advertised the exchangeability of a soft toy as a desirable right attached to them and in my opinion they were just as much tokens as the plaques. The fact that someone might choose to keep one rather than exchange it is not sufficient to deprive it of the character of a token. In construing the Act in this way, I am again concerned by the opportunity for wholesale evasion which any other construction would provide. If the soft toy can only be a "non-monetary prize", there would be nothing to stop the operator from advertising that a single soft toy could be exchanged for a television set or a large sum of money. As long as the intrinsic value of the soft toy was less than £6, the Act would be satisfied. I decline to give the Act a construction which leads to such an absurdity. Nor do I think that the difficulty could be met by asking, as a question of fact, whether the value of the prize offered at the redemption desk was so disproportionate in value to the item recovered from the machine as to make the latter a token. This is a criminal statute which ought to be certain in its effect. The only way to prevent the consequences which I have described is to treat any exchangeable item as a token. |
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