FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL, GAGELER AND KEANE JJ
HARRY KAKAVAS APPELLANT
AND
CROWN MELBOURNE LIMITED & ORS RESPONDENTS
Kakavas v Crown Melbourne Limited
[2013] HCA 25
5 June 2013
M117/2012
ORDER
Appeal dismissed with costs.
On appeal from the Supreme Court of Victoria
Representation
A J Myers QC with P Zappia and R A Heath for the appellant (instructed by Strongman & Crouch)
N J Young QC with N D Hopkins SC for the respondents (instructed by Minter Ellison)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Kakavas v Crown Melbourne Limited
Equity – Unconscionable conduct – Where appellant gambled at first respondent's casino and lost $20.5 million – Where appellant diagnosed as suffering from condition known as "pathological gambling" – Where appellant subject to "interstate exclusion order" under Casino Control Act 1991 (Vic) – Whether gambling transactions affected by unconscionable dealing – Whether appellant suffered from special disadvantage making him susceptible to exploitation – Whether first respondent had sufficient knowledge of any special disadvantage.
Words and phrases – "actual knowledge", "constructive notice", "interstate exclusion order", "special disadvantage", "unconscionable conduct".
FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL, GAGELER AND KEANE JJ. Between June 2005 and August 2006, the appellant lost $20.5 million playing baccarat at the casino in Melbourne operated by Crown Melbourne Limited ("Crown").
On 6 March 2007, the appellant issued proceedings against Crown and its employees, Mr John Williams and Mr Rowen Craigie (the second and third respondents), claiming that Crown engaged in unconscionable conduct contrary to s 51AA of the Trade Practices Act1974 (Cth) ("the TPA") and that Mr Williams and Mr Craigie were involved in that contravention. He also claimed compensation for losses suffered by him as a result of Crown's unconscionable conduct under the general law which informs s 51AA[1]. The appellant made other claims as well, but it is not necessary to refer to them here.
In the forefront of the appellant's case at trial was the proposition that Crown had incited the appellant, a known problem gambler, to gamble at its casino by incentives such as rebates on losses and the offer of transport on Crown's corporate jet.
After a lengthy trial, the primary judge dismissed the appellant's claims and gave judgment for Crown on its counterclaim for $1 million in unpaid debts[2]. On 21 May 2012, the Court of Appeal of Victoria dismissed the appellant's appeal[3].
In this Court the focus of the appellant's forensic strategy shifted away from the proposition…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Kakavas v Crown Melbourne Ltd [2013] HCA 25
Case
[2013] HCA 25
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered an appeal by Mr Kakavas against Crown Melbourne Ltd concerning significant gambling losses. Mr Kakavas, who had been diagnosed with pathological gambling, had lost approximately $20.5 million at Crown's casino. He was also subject to an interstate exclusion order under the *Casino Control Act 1991* (Vic) at the time of some of his gambling activities. The core of the dispute was whether these gambling transactions were rendered voidable due to unconscionable dealing by Crown Melbourne.
The central legal issues before the High Court were whether Mr Kakavas suffered from a "special disadvantage" that made him susceptible to exploitation by Crown Melbourne, and if so, whether Crown Melbourne had sufficient knowledge of this disadvantage to render its conduct unconscionable. The Court was required to determine whether the appellant's condition of pathological gambling constituted a special disadvantage in the equitable sense, and whether Crown Melbourne's employees possessed actual or constructive knowledge of this condition and its implications for Mr Kakavas's capacity to make rational decisions regarding his gambling.
The High Court rejected the appellant's reliance on constructive notice to establish Crown Melbourne's awareness of his personal disability. The Court found that the evidence did not support findings that Crown's employees were aware of any specific personal disability affecting Mr Kakavas that would render his gambling transactions unconscionable. Consequently, the challenges raised by Mr Kakavas against the decision of the Court of Appeal were unsuccessful. The appeal was dismissed, and Mr Kakavas was ordered to pay the costs of the proceedings.
Orders
Orders of the court
Appeal dismissed with costs.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL, GAGELER AND KEANE JJ
The appellant's attempt to rely upon constructive notice to supply the want of findings of awareness on the part of Crown's employees of any personal disability which affected the appellant should be rejected. Conclusion and orders The appellant's challenges to the decision of the Court of Appeal fail. The appeal should be dismissed with costs.
Ratio Decidendi
Legal Principle Established
Established by:
FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL, GAGELER AND KEANE JJ