Foroughi v Star City Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Foroughi v Star City Pty Limited
[2007] FCA 1503

TRADE PRACTICES – misleading or deceptive conduct – no representation that casino would remove patron – reasonable grounds for representations – systems in pace to detect patrons subject to voluntary exclusion order – no reliance – no unconscionable conduct – no satisfactory proof of losses

NEGLIGENCE – no duty of care to prevent self-inflicted economic loss from gambling

BREACH OF STATUTORY DUTY – no private right of action for patron against casino for failure to detect gambler on premises in breach of a voluntary exclusion order

Trade Practices Act (1974) (Cth) ss 51A, 51AA, 51AB, 52 and 82
Casino Control Act 1992 (NSW) ss 4A(1)(c), 79, 80, 82, 85, 114, 115

Agar v Hyde (2000) 201 CLR 552 applied
American Express International v Famularo (unreported, District Court of NSW, Norton DCJ, 19 February 2001) distinguished
Commercial Bank of Australia Ltd v Amadio and Anor (1983) 151 CLR 447 distinguished
Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 discussed
Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 applied
Perre v Apand Pty Limited (1999) 198 CLR 180 applied
Preston v Star City Pty Ltd [1999] NSWSC 1273 applied
Preston v Star City Pty Limited (No 3) [2005] NSWSC 1223 distinguished
Reynolds v Katoomba RSL All Services Club Ltd (2001) 53 NSWLR 43 applied
Rixon v Star City Pty Ltd [2001] NSWCA 265 discussed

Hon. Sir Lawrence Street AC KCMG, “Inquiry into the Establishment and Operation of Legal Casinos in New South Wales” (27 November 1991)

BEHROUZ FOROUGHI v STAR CITY PTY LIMITED
NSD 2137 OF 2005

JACOBSON J
27 SEPTEMBER 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 2137 of 2005

BETWEEN:

BEHROUZ FOROUGHI
Applicant

AND:

STAR CITY PTY LIMITED
Respondent

JUDGE:

JACOBSON J

DATE OF ORDER:

27 SEPTEMBER 2007

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The application be dismissed.

2.The applicant pay the costs of the application.

3.The cross-claim be dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 2137 of 2005

BETWEEN:

BEHROUZ FOROUGHI
Applicant

AND:

STAR CITY PTY LIMITED
Respondent

JUDGE:

JACOBSON J

DATE:

27 SEPTEMBER 2007

PLACE:

SYDNEY

REASONS FOR JUDGMENT

Introduction and overview

  1. Mr Behrouz Foroughi is a problem gambler.  According to expert evidence called on his behalf, he is also a pathological gambler, although this diagnosis is disputed by an expert called by the respondent, Star City Pty Limited.

  2. On 17 May 2004 and 18 May 2004, Mr Foroughi suffered substantial losses while playing roulette at Melbourne’s Crown Casino and at Star City’s casino at Pyrmont. Following his losses on 18 May 2004, Mr Foroughi requested that Star City ban him from the casino. Provision is made in s 79(3) of the Casino Control Act 1992 (NSW) for a casino operator to give an order, known as a voluntary exclusion…

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Details
Case
[2007] FCA 1503
Decision Date

CaseChat Overview and Summary

In the matter of Foroughi v Star City Pty Ltd, the plaintiff, Mr Foroughi, sought damages from Star City for losses incurred while he gambled at the casino in breach of a voluntary exclusion order. Mr Foroughi claimed that he had informed the casino staff of his gambling problem and requested exclusion from the premises. However, he alleged that the casino staff did not adequately explain the consequences of breaching the exclusion order, leading him to believe he could evade detection. The court had to determine whether Star City was liable for Mr Foroughi’s losses and whether the casino had adequately explained the exclusion order’s implications.

The primary legal issue was whether Star City was liable for damages due to Mr Foroughi’s losses after breaching the exclusion order. The court needed to assess whether the casino had sufficiently explained the exclusion order’s terms and consequences to Mr Foroughi. The court examined Mr Foroughi’s testimony and the casino’s evidence, including the cross-examination, to determine if Mr Foroughi understood the order's implications and the potential consequences of breaching it. The court also had to consider the Casino Control Act’s provisions regarding voluntary exclusion orders and the casino's obligations.

The court found that Mr Foroughi’s claims were unconvincing, as the cross-examination revealed he had been adequately informed of the exclusion order's terms and potential consequences. The casino staff explained the order’s permanent nature, the need to avoid casino premises, and the possibility of more severe penalties for non-compliance. The court concluded that Mr Foroughi’s losses did not entitle him to damages against Star City. It held that while casinos have a duty to detect and remove excluded individuals, the specifics of such measures are for the Casino Control Authority. The court dismissed Mr Foroughi’s application and ordered him to pay the costs. The cross-claim by Star City was also dismissed without costs.

ORDERS:
1. The application be dismissed.
2. The applicant pay the costs of the application.
3. The cross-claim be dismissed.

Orders

Orders of the court

1. The application be dismissed.

2. The applicant pay the costs of the application.

3. The cross-claim be dismissed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The order also stated that s 85 of the Casino Control Act provides that it is lawful for the person in charge of the casino:“using no more force than is reasonable in the circumstances to prevent you from entering or to remove you from the casino while this order is in force.”Mr Foroughi’s evidence of the representations Mr Foroughi described in his evidence in chief his version of the events which occurred from the time he decided he wanted to be excluded from the casino. He said he had lost a lot of money, he was stressed, and he went to the information desk where he told an employee that he wanted to be excluded. His evidence was that two people from the casino came down to see him and he told them that he had a gambling problem and he wanted to be banned from Star City. Mr Foroughi continued by saying that he told the employees that he did not want to come to Star City any more and he wanted them to help him. He was taken to a room where there was a security guard. He said he told the security guard the reason he wanted to be banned was that he had been gambling for years, he could not stop himself and he just kept losing. He acknowledged signing some documents and said he was given “an envelope with some information in it and some documents.” The critical part of his evidence was as follows:“… the security guard escorted me out and on the stairs he told me that, ‘You have done a right thing. I know you are a family man and you are not going to come back,’ and I said, ‘What happens if I come back?’ and he said that, ‘Well, we have got 5000 cameras and if you come back, we will catch you and there is a fine and you may go to gaol’.And what, if anything, was said about whether you would be detected? --- YesWhat was said? --- He said that, ‘We have got a’ – I said, ‘What happens if I could just come in and the cameras, they don’t catch, they don’t catch me?’ He said that, ‘We have got a system that no-one can escape from the system, so even if you come, we will catch you’.” Cross-examination of Mr Foroughi on the making of the exclusion order and the representations Mr Foroughi made a series of concessions in cross-examination which lead to an inescapable finding that the effect of the voluntary exclusion order was explained to him and that he understood it. The passages of the transcript which support this finding are as follows:“[D]o you recall that one of the people you spoke to asked you – so one of the people from the casino you spoke to that day said that he wanted to understand the reasons why you were seeking to be excluded? ‑‑‑ Yes. And he asked you some questions about how gambling had been affecting your life? ‑‑‑ Yes. And he took you through the application form which is the first page in the bundle in front of you. Do you recall that? ‑‑‑ Yes. And he read parts of it out to you, didn’t he? ‑‑‑ Well, I don’t remember that. I see. You don’t deny it, do you? ‑‑‑ No, I don’t deny it. And he asked you whether you understood what he had said to you about the application form? ‑‑‑ I don’t remember.But you don’t deny it, do you? ‑‑‑ No. And he asked you a number of questions, did he not, about your understanding of the application form. Do you recall that? --- Yes.He asked you what your understanding was about how long the exclusion order must stay in place? --- Yes.And he asked you, ‘What is your understanding about what you have to do to have the exclusion order revoked’? --- Yes.And he asked you, ‘What is your understanding about who has responsibilities under the exclusion order’? --- Yes.And he asked you, ‘What is your understanding of what you are required to do during the period of voluntary exclusion order’? --- Yes.And he asked you, ‘What do you understand you are releasing Star City from’? --- Yes.And you gave answers to all of those questions, didn’t you? --- Yes.Do you recall now what you said to him in answer to any of those questions? --- Well, I told him that, ‘I just want to be out of here and I just want to sign the document and just go.’Yes, but you gave specific answers to the questions that he put to you about your understanding, didn’t you? --- Yes.Thank you. Now, he also said to you words to this effect: ‘Do you understand what this will mean? You can’t come back into the casino. You can’t enter any area where there is a security guard standing at an entrance. We don’t want to stop you from going to the restaurants or theatres. If you want to go to a restaurant, that is okay, but don’t go past any security officer to get there. Also, if you receive any letter or promotional material from Star City, you have to disregard that’? --- Yes.And do you recall he said words to this effect to you: ‘This is a voluntary exclusion order. We are happy to do this for you but you have to respect the process and not do anything to breach the order. You must stay away and you must take steps to sort yourself out. The casino is here for people’s entertainment and we don’t want to see people here who can’t afford to be here. If you do come back in, we may issue an involuntary exclusion order which is more serious for you and may lead to a fine if you breach it’? --- Yes.And do you recall that this gentleman from the casino said to you words to the effect, ‘Do you understand that the order is permanent until it is revoked in writing’? --- Yes.And you have mentioned already being given a package of material that included information about where you could go for counselling for problem gambling? --- Yes.And do you recall that the gentleman from the casino said words to this effect to you: ‘I can see that you have been given a pack. I strongly suggest you have a look in that. Refer to the material and make the phone calls. There are people in there who are professionals who are standing by. It is very important you do that if you feel the urge to make a call. The people are trained and will really assist you in not coming back’? --- I don’t remember.But you don’t deny that he said words to that effect, do you? --- Yes.And do you recall that the gentleman signed the voluntary exclusion order and one of the gentlemen from the casino said to you words to this effect: ‘Pursuant to section 79 of the Casino Control Act, you are prohibited from entering or remaining on the premises of Star City while this order remains in force. This order shall remain in force from today until such time as it is revoked in writing. Do you understand that? Have you got any questions for me’? --- Yes.And did you ask him any questions at that point? --- No.”

Decision

Reasons for decision

JACOBSON J
For these reasons, I cannot accept Mr Foroughi’s evidence of the losses said to have been sustained by him.Conclusion and orders All of Mr Foroughi’s causes of action fail. In the ordinary case, a gambler who enters a casino in breach of a voluntary exclusion order and suffers losses will have no redress in the form of a damages claim against the casino. That is not to say that the casino does not have some obligation to try to detect such persons and remove them. However, the question of what measures the casino should have in place is, essentially, a matter for the Casino Control Authority. The orders I will make are that the application be dismissed with costs. Star City agreed not to pursue its cross-claim against Mr Foroughi. Accordingly, I will order that the cross-claim be dismissed, and I will not make any order as to its costs.

Ratio Decidendi

Legal Principle Established

Established by: JACOBSON J

Full text does not contain this section.