Payne and Others v Bradley

[1961] 2 All ER 36

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(Judgment by: Lord Parker CJ)

Payne and Others
v Bradley

Court:

Judges:
Lord Parker CJWinn J
Widgery J

Subject References:
Gaming
Lottery
Exemption
Purposes other than "private gain"
Tombola played at club and profits paid into general funds used to meet general expenses of club
Whether profits were applied for purposes other than purposes of "private gain"
Other exemptions

Legislative References:
Betting and Lotteries Act, 1934 (24 & 25 Geo 5 c 58) - s 21, s 22, s 23, s 24
Small Lotteries and Gaming Act, 1956 (4 & 5 Eliz 2 c 45) - s 1, s 4

Hearing date: 15 February 1961
Judgment date: 16 February 1961

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Judgment by:
Lord Parker CJ

The appellants are either trustees or directors of a club called the Huddersfield Friendly and Trade Societies' Club. Under the rules of the club the objects are-

"... to afford the members the means of social intercourse, mutual helpfulness, mental and moral improvement, and rational recreation."

And it is provided that-

"All moneys received on account of contributions and donations, admission fees, fines, or otherwise, shall be applied according to the rules of the society, no surplus being divisible among the members individually ... "

The membership

"... shall consist of an unlimited number of members ... The fee of 9d. per member, per year, shall be charged for such membership ... [and] ... if at any time it appears to the directors, that the society is in such a position as to render it necessary to alter the fees for membership, they shall call a special meeting of the members, who shall have power by increasing or reducing the same, to alter such fees subject to the registration of the appropriate amendment of rules."

On a number of days, the subject of the informations, the appellants held sessions in the main hall of the club whereat tombola was played. On each of the dates, sets of tickets were sold on the club premises for 2s 6d, each ticket entitling the holder to take part in one session of tombola. These sessions were conducted as an entertainment on their own and were not incidental to any other form of entertainment. I find it necessary to describe the game; it is now only too well known. The prizes were sums of money and the sale of tickets was not confined to members of the club. Finally, after the payment of the prizes, the proceeds were all paid into the general funds of the club. Indeed, for the year 1959 the profits from these sessions were shown in the accounts to be in the region of £900, while the membership fees amounted to £1,059.

In order to decide this case it is necessary to look a little at the scheme of the Acts in question. The Betting and Lotteries Act, 1934, by s 21 provides that: "Subject to the provisions of this Part of this Act, all lotteries are unlawful". It then provides by s 22 for offences in connexion with lotteries, and the relevant offence with which these appellants were charged was this (sub-s (1)):

"Subject to the provisions of this section, every person who in connexion with any lottery promoted or proposed to be promoted either in Great Britain or elsewhere ...

(f)

uses any premises, or causes or knowingly permits any premises to be used, for purposes connected with the promotion or conduct of the lottery ... shall be guilty of an offence."

That, be it observed, applies to all lotteries whether lawful under the subsequent provisions of the Act or unlawful under the general provisions of s 21.

Section 22(2) then provides that it shall be a defence to such a charge if it is proved that, to put it shortly, the lottery is exempted from illegality by the subsequent provisions of the Act. There are four relevant exceptions; the first two are to be found in the Betting and Lotteries Act, 1934, s 23, s 24, and the other two are to be found in the Small Lotteries and Gaming Act, 1956. Thus by s 23 an exemption is provided in the case of lotteries promoted as an incident of an entertainment of a particular sort; and sub-s (3) provides that the entertainments in question are bazaars, sales of work, fetes and other entertainments of a similar character. If a lottery is promoted as an incident to such an entertainment, then subject to certain conditions it is lawful, and one of the conditions is that the whole of the proceeds of the entertainment including the proceeds of the lottery after deducting expenses and matters of that sort, shall be devoted "to purposes other than private gain". It is clear that the appellants cannot claim the benefit of that exemption, and indeed it is not suggested that they can, because the tombola, assuming it to be a lottery, was not promoted as an incident of any such entertainment, as indeed the justices specially found (See p 37, letter e, ante).

The next exemption is provided by s 24 dealing with what are called private lotteries. The essence of that provision is that societies, which include clubs, institutions, organisations or other associations of persons may conduct private lotteries in which the sale of tickets or chances by the promoters is confined, broadly speaking, to members of the society, and provided that that is done, and that certain other conditions are fulfilled, the private lottery is not to be deemed an unlawful lottery. In that case, be it observed, one of the conditions is that the whole of the proceeds after payment of expenses shall be devoted either to the provision of prizes or to purposes which are "purposes of the society". In other words, provided the lottery is kept private, a club or society within the meaning of the section may devote the proceeds, after payment of expenses, to their own purposes. Accordingly, the appellants, in my judgment, could have obtained the benefit of this exemption had they confined the sale of tickets to members.

Turning to the Small Lotteries and Gaming Act, 1956, provisions is made by s 1 for a lottery being lawful if it is promoted by a society of much the same kind as that laid down for the purposes of s 24 of the earlier Act, which has been registered by a local authority being a society established and conducted wholly or mainly for one or more of the following purposes, that it to say charitable purposes, participation in or support of athletic sports or games or cultural activities, and finally (sub-s (1))

"(c)

purpose not described in the foregoing paragraphs, and not being purposes of private gain or purposes of any commercial undertaking ... "

Subject to certain conditions the money raised can be applied for "purposes, of the society". By s 1(2)(d) it is made a condition that the whole proceeds, after deducting sums lawfully appropriated on account of expenses or for the provision of prizes, shall be applied to purposes of the society, being purposes described in paras (a), (b) or (c) of s 1(1). Accordingly, as I read it, a society, if it is of a particular kind, namely established or conducted wholly or mainly for certain purposes, and which becomes registered by the local authority, can raise money which presumably will be paid over to the society in question, provided it is when so paid applied for one or other of the particular purposes. Pausing there, the appellants in this case cannot bring themselves within that exemption in particular because they were not registered by the local authority.

The final exemption, and the one relied on in this case, is to be found in s 4 of the Small Lotteries and Gaming Act, 1956. So far as it is relevant, s 4(1) provides as follows:

"This section applies to any entertainment promoted in Great Britain for raising money to be applied for purposes other than purposes of private gain, being an entertainment at which games of chance or of chance and skill combined are played in accordance with the following conditions, that is to say ...

(c)

the whole of the proceeds of such payments ... after deducting sums lawfully appropriated on account of expenses or for the provision of prizes or awards in respect of the games, are applied for purposes other than purposes of private gain."

Be it observed that that section is dealing with games, but by sub-s (3) if, and in so far as, a game played at an entertainment under this section is a lottery, it is not to be deemed an unlawful lottery.

It is, I think, conceded for the purposes of this case that tombola is a game; it is further conceded for the purposes of this case that the playing of the game was an entertainment. It is further clear that the game in question, as the justices found, is a lottery. But if the proceeds were applied for purposes other than purposes of private gain then that lottery would be a lawful lottery and there would be a defence to the charge. The sole question, therefore, in this case is whether the money which was paid into general funds of this society was or was not being applied for purposes other than purposes of private gain. For myself I am quite satisfied that looking at these various exemptions to which I have referred, the repeated reference there to private gain in connexion with the promotion of lotteries is clearly a reference to private gain into the organisers of the lottery or those whom they represent. Looked at in that way, whether one treats the appellants as the society, or as representing the members of the society, it seems to me impossible to contend that the society itself and the individual members did not by these means get a private gain. The real question is whether, that being the ordinary interpretation, as I would venture to think, there is anything in this section which would require that private gain should be given some other and more constricted meaning.

Counsel for the appellants, as I understand it, says that private gain in this connexion only occurs when money goes directly to the benefit or to the gain of an individual or individuals. In other words, he says that one must look beyond the society and see whether the money, having got into the coffers of the society, finds its way to individual members directly. He would add that since, under the rules, no surplus can be divided amongst the members, no member can directly get any pecuniary benefit from the sums so paid into the general funds of the society.

For my part I am quite unable to give the words that meaning; I think that in every sense of the word this money was being paid to the private gain of the society, and of the individual members of the society. In these circumstances I have come to the conclusion that the justices were right in convicting as they did, and I would dismiss this appeal.