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Cite as: [1999] EWHC Ch 214

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Victor Chandeler International Ltd [1999] EWHC Ch 214 (16th July, 1999)


B E F O R E:



B E T W E E N:










Mr David Oliver QC & Mr Mark Cunningham instructed by Goldsmiths
for the Claimant

Mr Philip Sales & Mr Timothy Pitt-Payne instructed by the
Solicitor of Customs & Excise

Hearing: 8th July 1999
Judgment: 16th July 1999

This is the official judgment of the court and I direct that no further note or transcript be made.



1. This action raises the question whether a bookmaker who locates his business abroad can lawfully obtain custom from within the United Kingdom by broadcasting advertisements on Teletext (a service run by the second defendant Teletext Limited) and Skytext. (The agreed statement of facts in this case refers indiscriminately to the second defendant and the service it provides as Teletext and I shall do the same). Section 9 ("Section 9") of the Betting and Gaming Duties Act 1981 ("the 1981 Act") reads as follows:


for protection

of revenue

Section 9(1) Any person who-

(a) conducts in the United Kingdom any business or agency for the negotiation, receipt or transmission of bets to which this section applies, or

(b) knowingly issues, circulates or distributes in Great Britain or has in his possession for that purpose, any advertisement or other document inviting or otherwise relating to the making of such bets ...

shall be guilty of an offence."


2. Subsection (2) of Section 9 provides that subsection (1) applies to all bets with a bookmaker outside the United Kingdom. The claimant Victor Chandler International Limited ("VCI") carries on an off-shore credit betting business serving non-United Kingdom residents. It wishes to extend its business so as to serve United Kingdom residents and for this purpose to place advertisements on Teletext and Skytext inviting, and otherwise relating to, the making of bets. VCI approached the first defendant the Commissioners of Customs and Excise ("CCE") for clearance that such advertising would not constitute a breach of Section 9. The CCE refused clearance. Thereupon VCI commenced these proceedings for a declaration that such advertising would not constitute a breach of Section 9. The CCE opposed the grant of this relief. The second defendant has taken no part in the proceedings.


3. The parties have agreed a statement of facts which reads as follows:

"1. Victor Chandler International Limited ("VCI") was incorporated in Gibraltar in 1991. From October 1996 VCI established itself as an off-shore credit betting business to non-UK residents.

2. Victor Chandler Credit Betting Limited (incorporated in England), until the 16th May 1999 provided credit betting services to UK residents.

3. With effect from the 17th May 1999 Victor Chandler Credit Betting Limited sold its customer and contact list to VCI.

4. Teletext began broadcasting on the 1st January 1993 and broadcasts its service alongside the ITV and Channel 4 television channels. The service is made up of a number of screen frames which contain news, information, advertising etc. These screen frames are known as "pages". The pages can be accessed by a television viewer using the television remote control and typing in the number of the page desired. That page would then appear as part of the live transmission on the screen and depending upon its length may be divided up into sub-pages.

5. A number of other bookmakers operating within the United Kingdom presently make their odds available by broadcasting them on Teletext and Skytext.

6. VCI wishes to make its odds available in the United Kingdom by broadcasting them on Teletext and Skytext. On the 11th May 1999 VCI transferred some information to the Teletext system, using the process described at paragraph 12 below. Otherwise, VCI has not yet transferred any information to the Teletext system. At no time has Teletext broadcast on its service any pages prepared by VCI containing VCI's odds. The description set out at paragraph 7-19 below relates to the way in which VCI wishes to broadcast information through Teletext if it is unlawful for VCI to do so.

7. The information which VCI wishes to broadcast includes prices, odds and propositions relating to sporting events, together with news and reference telephone numbers ("the information").

8. VCI wishes to utilise a total of 2 Teletext screen frames. These frames would be given a number and would be capable of being seen by a viewer typing that number into the television remote control. As part of the numbered "page" VCI would utilise 7 sub-screen pages which would be numbered 1-7 and which would revolve at a given speed.

9. The information would be prepared on VCI's personal computers at VCI's premises in Gibraltar using bespoke software which enables VCI in real time to up-date the Teletext pages remotely as and whenever necessary.

10. What is seen on the screen would be updated by VCI as frequently as it wished to do so. Depending on a variety of circumstances, including changes in odds, the information might be updated as often as 100 times a day.

11. In addition pages would be replaced as often as necessary depending on a variety of different circumstances including whether a particular race had taken place. The period for which each page would be displayed would be subject to agreement between VCI and Teletext.

12. The information would be saved by VCI on its own personal computers (on the databases of those computers) at its premises in Gibraltar. It would then in real time be relayed as a batch of information to Teletext's central editing system in the United Kingdom by direct electronic transmission over a data link, either using a modem and telephone line or leased data circuit via VCI's communications agent, Laveroch von Schoultz Limited ("LVS"). A modem is a piece of telecommunications equipment which modulates and demodulates a message. It changes data into a sound in order to send the sound along the telephone line and then restores the sound into data again (i.e. data held on the recipient computer system). A leased data circuit is a circuit which is continuously rented and always open, not just for the length of the call.

13. LVS is a communications agent. The information would be sent down one private leased telephone line from Gibraltar to LVS in the United Kingdom and from there down a number of telephone lines to Teletext. The Information would not be stored by LVS.

14. Teletext would from its central editing system database distribute the pages electronically to remote databases sited at major TV transmitter sites around the United Kingdom from where the Teletext services broadcast alongside the ITV and Channel 4 television channels.

15. The information would be prepared by VCI and contain information only provided by VCI. It would not contain information provided by any other source.

16. What is seen on the screen, being the Teletext pages, would be updated frequently and as often as necessary.

17. The information provided by VCI is continuously available on Teletext so that a user of Teletext has access to the information 24 hours a day on any day of the year.

18. Teletext is regulated by the Independent Television Commission ("the ITC"). The ITC Code for Text Services Part A section 8 requires that a record of all material transmitted be made by a means previously agreed with the ITC and be retained for a period of 90 days, and that for the avoidance of doubt this includes advertising material. In order to comply with this requirement Teletext retains an electronic archive record of all Teletext pages and all updates to those pages. Pages, and updates, remain in this archive for three months after they have been broadcast. It is possible for Teletext to print out copies of material that is in this electronic archive. From time to time the ITC seeks copies of matter which has been broadcast and Teletext provides this either in hard copy or in electronic form.

19. It is possible to print what is seen on the screen with the use of a Teletext printer which is a specialist piece of hardware and not generally available to members of the public. Pages can be retrieved from the central database at Teletext, either the live version or from the archive. Pages are viewed using a specialised Teletext page editor and this software supports printing to standard PC printers. It would not be the intention of VCI that any viewer should use a Teletext printer, although it would be impossible to stop him doing so if he so wished. Additionally any viewer who has access to a computer can purchase a TV card which enables that computer to display television and text services on the computer screen. Such cards also enable the user to gather and manipulate the Teletext data in other forms eg tracking share price performance over a period of days or weeks. A computer used with a TV card can print out material from Teletext on an ordinary computer printer without needing a Teletext printer.

20. This is the way in which VCI proposes to do business in the future if it is legally permitted to do so.

21. There are no material differences between the way in which the information would be passed to Skytext and the way in which it would be passed to Teletext.

22. The process as it relates to Skytext is largely similar save that Skytext is broadcast alongside the Sky channel pursuant to a satellite link."

To the above there were added in the course of the hearing:

"23. There is a part of the computer electronic storage system on VCI's personal computers in Gibraltar containing the information prepared on those personal computers.

24. If VCI broadcasts on Teletext there will be (a) a part of Teletext's central editing system which will contain the batch of information transmitted by VCI; and (b) a part of the remote databases of Teletext which will contain the batch of information transmitted from the central editing system."



4. Section 1 of the 1981 Act imposes a liability to general betting duty in respect of bets made with bookmakers in the United Kingdom. I have already set out the relevant parts of subsections (1) and (2) of Section 9. Subsection (4) of Section 9 provides that a person guilty of an offence under Section 9 is liable on conviction to a fine and (in case of a second or subsequent offence) a fine and period of imprisonment. Subsection (5) reads as follows:

"(5) A person who makes or tries to make a bet, or who gets or tries to get any advertisement or other document given or sent to him, shall not be guilty of an offence by reason of his thereby procuring or inciting some other person to commit, or aiding or abetting the commission of, an offence under this section."


5. The history of Section 9 and the language of subsection 1 of Section 9 can be traced back to Section 5 of the Finance Act 1952 ("the 1952 Act") and then through Section 2 of the Betting Duties Act 1963 and Section 9 of the Betting and Gaming Duties Act 1972 to Section 9. The 1963, 1972 and 1981 Acts are all consolidating Acts. Section 9(1) and its predecessors prevent bookmakers who are based off-shore (and are therefore not subject to United Kingdom general betting duty) from soliciting bets in the manner specified from individuals within the United Kingdom. The statutory policy behind imposing this prohibition was to prevent loss of revenue by bookmakers acting in this way and (incidentally) to protect bookmakers based within the United Kingdom (who are liable for United Kingdom general betting duty) from unfair competition within the United Kingdom betting market by overseas bookmakers who are not so liable. The statutory policy cannot fairly be extracted from Section 9 as going beyond the limits imposed by the language used: it cannot be assumed that the legislature intended to criminalise the issue, circulation, distribution or possession of anything which did not answer the description of "an advertisement or other document" of the character described.


6. The issue between the parties is whether the proposed broadcasts by VCI (which will invite and otherwise relate to the making of bets) will constitute or give rise to the issue, circulation or distribution of "an advertisement or other document". To answer this question it is necessary to decide three questions. The first is whether the prohibition on advertisements is limited to advertisements in documentary form. If it is not so limited, the broadcast itself will constitute an offence and it is unnecessary to go any further. The second and third questions proceed on the basis that the prohibition is limited to advertisements in documentary form. The second is whether the Teletext pages as they will appear on the screen for viewing by individual users of the service will constitute documents. The third is whether the transmissions between VCI and the Teletext central editing system and between that system and the Teletext remote databases will give rise to the issue, circulation or distribution of the proscribed documents.


7. The answer to the first question turns on the meaning of the words "advertisement" and "document" and of the composite expression "advertisement or other document".

(a) "Advertisement"

8. An advertisement is some form of public notice or announcement, generally of goods or services and intended to draw attention to them and promote their sale or use. Though often found in documentary form (e.g. in newspapers or posters), an advertisement may be found in other forms e.g. oral statements (e.g. by barkers or on the telephone) or broadcasts. In short, if Section 9 had merely proscribed advertisements, this prohibition would have extended to all forms of advertisement: this would have embraced the proposed broadcasts and an offence would be committed by making the proposed broadcasts.

(b) "Document"

9. The 1981 Act does not define the word "document" and I find no assistance in the various statutory definitions of the word in other statutes given for the purposes of those statutes. The starting point is the judgment of Walton J. in Grant v. South Western and County Properties Ltd [1975] Ch 185 (a case on discovery). He pointed out that the derivation of the word was from the Latin "documentum" meaning something which instructs or provides information; the essential feature is that it contains information; it is not confined to written, printed or inscribed material; it extends to photographs and films; the information may be communicated to the ear as well as to the eye; and accordingly he held that it covered (as was in issue in that case) recordings which record information. He added (at p.197A-B):

"It is, I think, quite clear that the mere interposition of necessity of an instrument for deciphering the information cannot make any difference in principle. A litigant who keeps all his documents in microdot form could not avoid discovery because in order to read the information extremely powerful microscopes or other sophisticated instruments would be required. Nor again, if he kept them by means of microfilm which could [not] be read without the aid of a projector."


10. Vinelott J. in Derby v. Weldon (No. 9) [1991] 1 WLR 652, basing himself on what Walton J. had said, held that the database of a computer, so far as it contained information capable of being retrieved and converted into readable form, and whether stored in the computer itself or recorded in back-up files, was a document. In Rollo v. HM Advocate [1997] Scots Law Times 958, the issue arose whether a warrant to seize and detain documents under the Misuse of Drugs Act extended to an electronic diary called a Memomaster. This was a small palm-held computer with buttons to enter letters and figures and keys to track through information (including a secret part accessible only by a password). The High Court of Justiciary in an opinion delivered by Lord Milligan held that it was a document:

"It seems to us that the essential essence of a document is that it is something containing recorded information of some sort. It does not matter if, to be meaningful, the information requires to be processed in some way such as translation, decoding or electronic retrieval." p.960G.


In Alliance & Leicester BS v. Gharamani [1992] 32 RVR198, Hoffmann J. held that deletion of part of a document stored upon a disc of a computer constituted a breach of an injunction not to destroy or alter documents.

11. In summary, a document is a material object which contains information capable of extraction from it (e.g. a tape so long as it is not blank). Mr Oliver (Counsel for VCI) properly disavowed that he was a document: the repository of information must be inanimate: neither a person nor A.P. Herbert's "negotiable cow" (referred to in Uncommon Law, p.201) can constitute a document. It matters not whether the information is in writing or some other form capable of being assimilated by the eye or by the ear or (as in the case of braille) by the touch; nor whether apparatus (such as a tape-recorder or microdot reader) is required for this purpose. Information of itself cannot constitute a document, and the transmission of information of itself cannot constitute the transmission of a document. The apparatus which transmits, receives, displays, reproduces or converts into readable form information fed into it from outside is not a document save and unless it also holds and retains information.

(c) "Advertisement or other document"

12. As I have already said, an advertisement in ordinary parlance may or may not be in some documentary form. The question raised is whether in Section 9 what is prohibited is any form of advertisement (which therefore includes a broadcast advertisement) or only an advertisement in documentary form. I have no doubt that Section 9 prohibits only an advertisement in documentary form. That is the natural and ordinary meaning of the phrase in its context in the 1981 Act. There are three factors in particular which impel this construction:

(i) the collocation of words in Section 9 is "advertisement or other document". The words "other document" make plain that only advertisements which constitute documents fall within the section. If non-documentary forms of advertisement were to be included, the statutory language would read "or any" in place of "or other";

(ii) the language of the prohibitions in Section 9 on the issue, circulation, distribution and the possession of advertisements is language apposite to promulgation of advertisements in a physical form;

(iii) subsection (5) contemplates that the advertisement is capable of being given or sent, again language apposite to an advertisement in some physical form as opposed to a "real time" broadcast.


13. Section 9 requires that the proscribed advertisement be of a documentary character. Neither the broadcast nor the Teletext nor the Skytext pages as they appear on the screens of viewers have this necessary documentary character. The Teletext pages are merely transmitted information and the screens on which they are seen are merely the equipment for the transmission and display of that information. Neither constitute a material object containing information. Policy reasons may well favour the approach taken by the CCE that no distinction should be drawn between advertisements which are, and advertisements which are not, in documentary form, but that consideration does not enable the Court to rewrite the language of Section 9(1) to achieve this result.


14. The CCE focus on items 23 and 24 of the agreed statement of facts, namely the existence of information on VCI's computers in Gibraltar; the transmission of this information to Teletext's central editing system; and the further transmission of this information to the Teletext remote databases. The computers in Gibraltar, and the Teletext central editing system and remote databases (so far as they hold the information) will constitute documents. 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. But CCE submits that: (1) the transmission in this case (like the sending of a facsimile message) brings into existence on receipt a document (whether in the form of paper or computer disc or otherwise) and that this constitutes the issue of that document to the recipient; and (2) the transmission by VCI from Gibraltar (again like the sending of a facsimile message) constitutes what in ordinary parlance would be said to be circulation and distribution of the original document held in Gibraltar. The CCE submit that there is no sensible distinction between sending facsimile messages or e-mails and sending computer discs and (to further the policy of the 1981 Act to protect the revenue) I should not be bemused by technicality but adopt a common-sense approach and hold the prohibitions equally to apply.

15. This argument, however attractively and persuasively presented by Mr Sales(Counsel for the CCE), elides the issue, circulation and distribution of documents (which is proscribed) and the issue, circulation and distribution of information (which is not). 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 electrical 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 real thrust of the CCE's case is that what VCI proposes to do has the same practical effect as if VCI was going to do what is prohibited and that the policy of the legislature apparent from Section 9 must be to rule out such activity. I should say first that it is not apparent from Section 9 that the policy of the legislature was to rule out advertising (e.g. using the telephone) where no document is issued, circulated or distributed or possessed for the proscribed purpose: see paragraph 5 above. But even if the CCE established the existence of the policy for which they contend, this would not get them home. I fully accept that a purposive construction should be adopted of penal legislation as of any other legislation and that in construing legislation on occasion some violence to the words used may be justified to achieve the obvious intention of the legislature and produce a reasonable result. I also accept that the 1981 Act should be treated as "always speaking" and accordingly construed by continuously updating its wording to allow for changes since the 1981 Act was written (see e.g. R v. Ireland [1977] 1 All ER 112 and R v. Westminster City Council ex p. A (1997) 9 Admin LR 504 at 509). But the wording for this purpose must be wide enough fairly to embrace the changes in question. Parliament has in this case (perfectly reasonably) laid down as a constituent of the criminal offence the issue, circulation or distribution of a document, and not the doing of what is the equivalent or achieves the same mischief. 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. This case reveals a lacuna in the legislation: the lacuna has arisen because modern technology has enabled VCI to advertise without the need for any document covered by Section 9. It is not possible to fill that lacuna by "updating" of the statutory language: what is needed for this purpose is not construction, but reconstruction, of Section 9. The lacuna is for Parliament, and not for the Court, to fill, most particularly since this is a case of a statutory provision creating a criminal offence. It is to be noted in this context that Parliament in Section 42 of the Gaming Act 1968 made express provision that the prohibition on the issue of advertisements relating to gaming included advertising by way of sound broadcasting or television. Parliament did not think fit to incorporate a like provision when enacting Section 9. It is for Parliament to decide whether to fill the gap in the 1981 Act by a legislative amendment to the like effect.


16. For the reasons which I have given I hold that VCI is accordingly entitled to the declaration which it seeks.


© 1999 Crown Copyright

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