Australia and New Zealand Banking Group Ltd v Nguyen
[2002] VSC 69
•21 March 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 7685 of 2001
| AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD. | Plaintiff |
| v | |
| HUONG THI MINH NGUYEN | Defendant |
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JUDGE: | PAGONE, J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 20 FEBRUARY 2002 | |
DATE OF JUDGMENT: | 21 MARCH 2002 | |
CASE MAY BE CITED AS: | ANZ v. NGUYEN | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 69 | |
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CATCHWORDS: Supreme Court Rules, rr.32.04 and 32.06 – Applications to identify possible defendant and causes of action – Lotteries Gaming and Betting Act 1966, s.67 - Application to Casino "as or for or by way of or on account of" a wager or bet – Casino Control Act 1991, ss.6(2), 151 – Secrecy provision – Disclosure of information by Casino to person.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr. G. Nettle QC and Mr. J. Moore | Minter Ellison |
| For the Respondent | Mr. S.K. Wilson QC and Mr. G.L. Meehan | Mallesons Stephen Jaques |
HIS HONOUR:
By this application the plaintiff ("ANZ") seeks orders pursuant to rr.32.04 and 32.06 against Crown Ltd. ("Crown").
The ANZ has instituted proceedings against Ms. Nguyen, a former employee, her parents and her former fiancée, to recover monies allegedly misappropriated from the account of Pavco Nominees Pty. Ltd. ("Pavco"). The ANZ believes that it may also have a claim against an unknown person and possibly also against Crown. The basis for this belief is found in the four affidavits filed on behalf of the ANZ and relied upon in this application. The ANZ believes that between 27 and 29 June 2001 the former employee fraudulently withdrew or caused to be withdrawn $1,685,000 from two bank accounts maintained by Pavco and had transferred the money into accounts unconnected with Pavco or authorised by it. The ANZ believes that at about 1.30 p.m. on 27 June 2001 the sum of $1,565,000 was transferred from an ANZ account styled "Timothy Wong and Rudi Rudi" into another account with the ANZ styled "Rudi Rudi" ("the Rudi Rudi account"). From there the sum of $1,500,000 was withdrawn to acquire a bank cheque from the ANZ payable to Rudi Rudi and deposited into an account with Crown.
The ANZ believes that in these circumstances it may have a claim against the person, whose identity is not known, who passed the bank cheque to Crown. The basis of that claim lies in the trust impressed upon the cheque in the hands of the unknown person either because it represents stolen money in the hands of a thief[1] or because the monies were transferred by or with the assistance of an employee owing fiduciary duty to the ANZ. The ANZ may also be able to base a claim against the unknown person under the principles in Barnes v. Addy[2] or as money had and received[3].
[1]Black v. S. Freedman & Co. (1910) 12 CLR 105 at 110 per O'Connor, J.; Lurgi (Australia) Pty. Ltd. v. Gartz [2000] VSC 278; Esanda Finance Corp. Ltd. v. Reyes [2001] NSWSC 234
[2](1874) 43 LJ Ch 513; (1874) 9 LR Ch App 244
[3]Lipkin Gorman (A Firm) v. Karpnale Ltd. [1991] 2 AC 548
The potential claim against Crown, however, is said to be that found in s.67 of the Lotteries Gaming and Betting Act 1966 (Vic.) ("the Lotteries Act"). Under that section a "strict liability" cause of action is created against a person to whom money is paid which had been stolen or embezzled and paid to the recipient, as or for or by way or on account of a wager or bet. To make this claim the ANZ must establish, amongst other things, that Crown received money which was "stolen or embezzled" and that the money was paid to Crown "as or for or by way or on account of a wager or bet".
The application by summons before me seeks to obtain documents which it is assumed would assist the ANZ in determining (a) the identity of Rudi Rudi (that is, the identity of a potential defendant) and (b) whether the ANZ is able to establish that the receipt of the money by Crown gave rise to an action under s.67 of the Lotteries Act.
Crown resists the application on a number of bases. One is that the ANZ has not met the standard required by rr.32.04 and 32.06. Another is that the cause of action under s.67 of the Lotteries Act cannot succeed. The third is that s.151 of the Casino Control Act 1991 ("the Casino Act") positively prevents Crown from disclosing the information sought in this application.
A. Application to identify a defendant
Rule 32.04 permits a party to existing proceedings to make an application to the same effect as that provided for in r.32.03, namely, where the applicant is seeking to identify a defendant. Rule 32.03 applies where an applicant, having made reasonable inquiries, is unable to ascertain the description of a person sufficiently for the purpose of commencing a proceeding against that person, and it appears that some other person has or is likely to have knowledge of facts, or has or is likely to have or has had possession of documents which would assist in ascertaining the description of the prospective defendant.
In my view the ANZ has satisfied the requirements in r.32.04 (incorporating r.32.03). It has undertaken reasonable inquiries to identify Rudi Rudi. A Mr. Cousins has deposed to the fact that a person who identified himself as "Rudi Rudi" supplied the ANZ with an Indonesian passport numbered K720825 with an expiry date of 23 March 2003. Mr. Cousins also deposed to having been informed verbally by an employee of Crown that it gave value for a bank cheque to a man described as "Rudi" who supplied Crown with an Indonesian passport as identification. The passport supplied to Crown was numbered K720925 with an expiry date of 23 March 2006. Assuming the details were correctly recorded by the respective employees of the ANZ and Crown, the two passports would seem to be different: the numbers differ by one digit and the expiry dates differ by three years.
An applicant under rr.32.03 and 32.04 must show that, having made reasonable inquiries, it is unable to ascertain the description of a person sufficiently for the purpose of commencing a proceeding. Crown contends that the requirement of the making of reasonable inquiries has not been satisfied by the ANZ. In particular it is submitted for Crown that the ANZ had not made reasonable inquiries because it had not sought information from the Indonesian Embassy in Australia. The requirement in the rule is not that all inquiries possible be made by a person seeking to identify a defendant before being able to rely upon r.32.03. The test is one of "reasonableness". There is no material before me to support the view that Crown's suggested inquiry is reasonable. Implicit in the suggestion are the assumptions that a request of the kind urged by Crown (a) would be satisfied favourably and (b) would be satisfied promptly. I am in no position to decide that a request from an Australian bank to the Indonesian Embassy would either be satisfied at all or in a timely manner. Indeed, such assumptions as I may make would seem to point the other way; namely, that privacy laws may prevent disclosure and that requests of embassies may be met with reasonable delays. Crown did not point to or offer any factual foundation to support the view that such an inquiry had to be made as a precondition to any entitlement that might flow from r.32.04. No material was put by Crown to support the proposition that an inquiry of the Indonesian Embassy could be dealt with either as a matter of Indonesian law or as a matter of local embassy practice.
Another requirement that the ANZ must satisfy under the rule is to show that Crown has or is likely to have something capable of assisting the ANZ in its identification. This, it seems to me, is satisfied by the material deposing to its dealings between Crown and Rudi, the existence of two accounts connected with the name Rudi, and the relationship between Rudi and the former employee and her family and fiancee.
B. Potential Claim against Crown: Lotteries Act, s.67
Preliminary discovery against Crown under rr.32.05 and 32.06 is based upon a cause of action under s.67 of the Lotteries Act. That section provides:
"Where any money is stolen or embezzled and paid to any person as or for or by way of or on account of a wager or bet the person from whom the money was stolen or embezzled may in any court of competent jurisdiction recover the money or any sum not exceeding the amount thereof from the person to whom the money was so paid."
Crown resists discovery on the basis that s.67 does not provide a cause of action against it for a number of reasons. It was contended that s.67 only applies to cases where the money actually stolen or embezzled is gambled with the third party recipient (namely Crown), that s.67 is expressly excluded from application to Crown Casino by virtue of s.6(2) of the Casino Act, that the Lotteries Act only applies to Crown to the extent that it is expressly preserved by the Casino Act, and that Crown was not permitted to provide the relevant discovery pursuant to s.151(1) of the Casino Act.
The first contention on behalf of Crown was that s.67 only applies to cases where the money actually stolen or embezzled was gambled with Crown. The evidence in this case was that on 27 June 2001, $1,500,000 was transferred to an account operated by Crown. At 9.47 a.m. on 27 June 2001, ANZ bank cheque numbered 303637 in the sum of $1,500,000 made payable to the name of Rudi Rudi was deposited to an ANZ bank account in the name of Crown, although it is not at present known whether the bank cheque was purchased with direct funds or with funds taken from the Pavco account. For present purposes, however, it may be assumed that the money paid to Crown was sourced from that stolen from the Pavco account. That, at any rate, is the contention made by the ANZ which the material currently available goes some way to support. The fact that what was "paid" to Crown was a cheque rather than currency or legal tender does not prevent the operation of s.67. In my view "money" in s.67 of the Lotteries Act relevantly includes cheques.[4]
[4]See definition of "money" in s.3 of the Lotteries Act.
The more difficult question is whether it can be said that the money[5] paid to Crown was paid to it "as or for or by way or on account of a wager or bet". It was, I think, accepted on behalf of Crown that the money was probably received in anticipation of the placing of a bet or wager with Crown. That, in any event, seemed to me to be a reasonable inference on the evidence, especially in view of the involvement in the transfer of funds by Ms. Nguyen and her connection with the other defendants in the existing proceeding. It was contended, however, that "the stolen or embezzled money must itself be placed as the wager or bet" before the section can have effect.
[5]Which for these purposes I assume to be the funds paid into Crown's account upon presentation of a cheque sourced from monies stolen from the Pavco account
The section was first enacted in 1895 as a means of dealing with cash betting in the streets. The section began as an amendment proposed by the Honourable A. Wynne MLC at a time when, it seems, he was not a member of the government. The provision was re-enacted in 1966 in the current legislation without express reference to any purpose limited to that which it may have had in 1895. Its actual terms are, I think, clear and its effect should not in my view be restricted to any implication to be drawn from a narrower contemplation that the original proposer may have had over 100 years ago. Its terms create a liability for a person receiving money "as or for or by way of or on account of" a wager or bet notwithstanding that the recipient neither knew, nor had any reason to believe or suspect, that the money was stolen or embezzled. The liability is a risk borne by anyone who is engaged in wagering or betting. The critical criterion for the liability created by the section being whether the payment may relevantly be said to have been "as or for or by way of or on account of" a wager or bet. Thus, in Davison Faulkner Pty. Ltd. v. Totalizator Agency Board[6], Newton, J. held that the section could not apply to the receipts of a totalizator because such a person was not receiving the money "by way of wager or bet". His Honour said:
"It is thus clear, in my view, that when read in conjunction with the words 'as' or 'by way of' the words 'wager or bet' mean the sum of money staked in respect of a wager or bet. And I think that they probably have the same meaning when read in conjunction with the words 'for' or 'on account of', although I find it unnecessary to decide this."[7]
What placed the totalizator outside the operation of the section was the absence of a contract or transaction of wagering or betting with the recipient of the money.[8] In other words that there was no relevant "wager or bet" between the payee and payer of the money.
[6][1971] VR 274
[7]ibid 279
[8]see ibid 282 and 284-5
The same cannot be said in my view about the receipt by Crown. Crown's position is quite unlike that of a totalizator and in my view Crown does relevantly receive money "as or for or by way of or on account of" a wager or bet. The ANZ does not know whether the bank cheque, or its traceable proceeds, was paid to Crown by way of or on account of a wager or bet. The documents in Crown's possession will most likely disclose, or tend to disclose, the existence or non-existence of that fact. It is not necessary for a person relying on s.67 to establish an identity between the money stolen and the money gambled. To require a strict identity between the money stolen and the money gambled would be too onerous a requirement in view of the breadth and generality of the words "as or for or by way of or on account of" a wager or bet. These words suggest that the connection required between the relevant gambling and the receipt is not to be construed narrowly. Furthermore, in my view, to require proof of identity of the money stolen with the money gambled would substantially undermine the purpose and effect of the provision even on the narrow view of the purpose contemplated in 1895.
C. Exclusion of section 67
Section 67 of the Lotteries Act is not expressly excluded from applying to Crown, although s.6(2) of the Casino Act does provide an express exclusion of Crown from the Lotteries Act to some extent. The relevant question is what is the extent of the exclusion. Section 6(2) of the Casino Act provides:
"Except to the extent (if any) that the regulations otherwise provide, the Lotteries Gaming and Betting Act 1966 and the Gaming No. 2 Act 1997 do not apply to the conduct and playing of a game or approved betting competition and the use of gaming equipment when the game or approved betting competition is conducted and the gaming equipment is provided in a casino by or on behalf of the casino operator."
It is contended on behalf of Crown that this section excludes the application of s.67 of the Lotteries Act from applying to Crown.
I am unable to accept the construction advanced on behalf of Crown. The exclusion in s.6(2) of the Casino Act is limited in a number of ways and is in terms expressed to be limited "to the conduct and playing of" a game or approved betting competition. I am unable to accept the view that a liability of the kind created by s.67 of the Lotteries Act may be described as either the "conduct" or the "playing" of a game or approved betting competition. It may be that the liability created by s.67 should have been exempted from application to a casino regulated by the Casino Act. However, I do not think that s.6(2) does so in terms and I am not persuaded that there is a secure legal foundation to exclude its operation otherwise. On the contrary, s.6(2) of the Casino Act positively contemplates at least some continued operation of the Lotteries Act to a casino and, in my view, the only relevant question is whether the exclusion contemplated expressly extends so far as to exclude a liability created by s.67 of the Lotteries Act. As I have said, in my view, it does not.
For similar reasons, I am unable to accept the alternative contention that s.67 of the Lotteries Act does not apply because the Casino Act states exhaustively the rights and obligations of a casino with respect to all money received by way of betting. Support for this proposition was sought to be derived from dicta in Davison Faulkner[9]. In that case Newton, J. found additional support for his conclusion from the circumstance that Divisions 2, 3 and 4 of Part V of the Racing Act 1958 appeared to have been enacted "upon the assumption" that s.67 of the Lotteries Act "did not work in the background as a potential source of disturbance to the detailed schemes for the operation of racecourse and off-course totalizators for which Parliament so carefully provided." The Casino Act contains many provisions regulating, perhaps exhaustively, many aspects of the conduct and playing of activities taking place in casinos. Those provisions do not, however, cover (and therefore do not exclude) all rights and obligations otherwise created by law. There are many rights and obligations created by the common law and statutory provisions which apply to Casinos that are not covered by the Casino Act. I see no secure foundation for concluding that the liability created by s.67 of the Lotteries Act is one which is necessarily excluded from application to a Casino, whilst leaving unaffected other rights and liabilities created by statute or the common law not sourced in the Casino Act. On the contrary, the existence of s.6(2) of the Casino Act plainly contemplates that the Lotteries Act would at least in part operate upon a casino. If s.67 of the Lotteries Act is not to apply to a casino it must, in my view, be because it is expressly excluded. As explained above, I do not accept that the liability created by s.67 was expressly excluded by s.6(2). In that context the exclusion is made only by reference to "the conduct and playing of" a game etc., and is not extended to related activities.
D. Secrecy Provision: Section 151 Casino Act
[9]ibid at 286
The ANZ contends that s.151 does not prevent Crown from disclosing the information it seeks pursuant to rr.32.04 and 32.06. Sub-section 151(1) imposes upon persons, including Crown, an obligation not to disclose information to any other person. It does not prevent disclosure to a court because a "person" in the sub-section to whom disclosure may not be given does not include a court.[10] Sub-section 151(2) deals expressly with the production or divulging of information by a person, other than a casino operator (namely, Crown), to a court. That situation is dealt with by releasing such a person (other than a casino operator) from a requirement to produce a document in a court or to divulge information to a court. In other words, the prohibition from disclosure in s.151(1) upon a person other than a casino operator is effectively maintained in relation to court proceedings, thus revealing a legislative policy in favour of secrecy.
[10]Clyne v. Deputy Commissioner of Taxation (NSW) (1983) 83 ATC 4001; Deputy Commissioner of Taxation v. Kunz (1992) 92 ATC 4521; see also the distinction drawn in ss.151(1) and (2)
The position of a casino operator is expressly dealt with in s.151(2A). That provision, unlike s.151(1), does not impose a prohibition upon the divulging of information, and does not restrict any secrecy of the information from a "person". Its terms, therefore, are capable of having effect against a requirement imposed by a court order to produce or to divulge. However, unlike s.151(2), the effect of s.151(2A) of relieving from any obligation to produce or divulge, is limited to information acquired by a casino operator from a "prescribed person" as defined in s.151(6) which has no relevance to the present proceedings. The position of the Casino operator, therefore, seems to be that: (a) it has the obligation created by s.151(1) to maintain secrecy; (b) the secrecy obligation in s.151(1) does not extend to preventing a disclosure to a court; and (c) it may not be required to produce or divulge to any person or court documents or information acquired from a prescribed person. The curious position thus produced is that the Casino operator is positively prohibited from disclosure to a person other than a court (s.151(1))[11], but may be required to disclose to a court.
[11]Compare this with the provisions in s.16(3)of the Income Tax Assessment Act 1936: see also, Canadian Pacific Tobacco Co. Ltd. v. Stapleton (1952) 86 CLR 1; R. v. Clarkson [1982] VR 522; R. v. Murphy (unreported, VSCA, 7 April 1992)
The ANZ's proceedings against Crown based upon rr.32.04 and 32.06 presuppose and assume an entitlement in the ANZ itself to require Crown to disclose information lawfully received by Crown. Section 151(1) stands against such a claim and the rules do not, and could not, override the statutory obligation in s.151(1). There is, therefore, an effective prohibition upon Crown from divulging the information to the ANZ which, in my view, is not overwritten by the Rules or by s.151 itself. Secrecy provisions like those found in s.151 reflect an important and fundamental public policy. The policy seeks to balance (a) the importance of the free flow of information to those authorised to receive it, or empowered to require it, with (b) the secrecy and confidentiality of that information being maintained. Indeed, the latter may be seen as facilitating the former because it is the certainty of the secrecy that encourages the supply of full and accurate information. The terms of s.151 include specifically identified instances where information may be divulged or disclosed and the circumstances contemplated by rr.32.04 and 32.06 are not amongst them. It may be that Crown may be required to disclose the information to a court in properly constituted proceedings and by an appropriate process, but I do not think that a party may assert an entitlement in the face of s.151(1). Such an assertion is at the heart of an application under rr.32.04 and 32.06.
Accordingly I dismiss the application by the ANZ and will hear counsel on the question of costs.
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