McLauchlan v Ng
[2023] VCC 483
•31 March 2023
HIS HONOUR
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
General List
Case No. CI-21-02262
| David Ian McLauchlan | Plaintiff |
| v | |
| Allen Ng | Defendant |
---
JUDGE: | HIS HONOUR JUDGE TRAPNELL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2 and 3 August 2022 | |
DATE OF JUDGMENT: | 31 March 2023 | |
CASE MAY BE CITED AS: | McLauchlan v Ng | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 483 | |
REASONS FOR JUDGMENT
---
Subject:COMMERCIAL
Catchwords: Debt – Claim for moneys owed as a result of bets placed on horse racing – Whether failure to comply with Racing Victoria’s Club Bookmakers’ Licence Rules 2010 and Racing Victoria’s Bookmakers’ Telephone Betting Rules 2001 results in bets being void and unenforceable – Whether failure to comply with the Responsible Gambling Code of Conduct results in bets being void and unenforceable – Whether the provisions of the Responsible Gambling Code of Conduct constitute contractual warranties – Whether breach of Racing Act results in unauthorised bets – Statutory interpretation – Application of Beckwith v The Queen
Legislation Cited: Racing Act 1958 – Gambling Regulation Act 2003 – Gambling and Liquor Legislation Amendment (Modernisation) Act 2014
Cases Cited:Beckwith v The Queen (1976) 135 CLR 569 – R v A2 (2019) 269 CLR 507 – Simpson v The Queen (1998) 194 CLR 228
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D P Sheales Mr T Purdey | AMS Ivanhoe Lawyers |
| For the Defendant | Mr M Clarke KC Ms E Yianoulatos | Lim & Tng Lawyers |
HIS HONOUR:
Introduction
1This case concerns a claim by a registered bookmaker, David Ian McLauchlan, for moneys said to be owing by the defendant, Allen Ng, on a betting account. The amount claimed is the balance said to be outstanding of $150,000.00.
2Mr McLauchlan has been a registered bookmaker for 49 years and a ‘rails bookmaker’[1] for 30 years. It is not disputed that at all relevant times Mr McLauchlan was (and remains) a registered bookmaker and Mr Ng placed bets[2] with Mr McLauchlan between 1 February 2020 and 18 April 2020 (both inclusive) on credit and mostly by telephone.
[1] A ‘rails bookmaker’ is one who takes bets in person at a racecourse (by the rail).
[2] The words ‘bet’ and ‘wager’ are used interchangeably throughout this judgment. The Gambling Regulation Act 2003 (Vic) (‘Gambling Act’) does not define the word ‘bet’ however, s 1.3 defines ‘wagering’ to mean ‘pari-mutuel betting on a horse race, harness race or greyhound race’. The Racing Act 1957 (Vic) (‘Racing Act’) s 4 refers to a person who ‘bets by way of wagering’.
3Mr Ng was introduced to Mr McLauchlan by a professional punter whom Mr McLauchlan had known for many years and he trusted. I accept that Mr McLauchlan took Mr Ng’s details and entered these into a computer program controlled by Racing Victoria, so that Mr Ng could bet on credit. The Racing Victoria record of wagers taken by Mr McLauchlan from Mr Ng from 1 February 2020 to 18 April 2020 is in the court book.[3]
[3] Court book (‘CB’) 175–177. The court book is Exhibit (‘Ex’) A.
4When Mr Ng won on any given day of betting, he was paid out by Mr McLauchlan immediately or soon thereafter, and when Mr Ng lost, he paid out Mr McLauchlan. Between February and April 2020, Mr McLauchlan paid out a total of $104,894.50 to Mr Ng and Mr Ng paid out a total of $88,600.00 to Mr McLauchlan.[4]
[4] See Chronology dated 1 August 2022 (Ex B) (‘Chronology’). This is largely an agreed chronology and the disputed items are immaterial for present purposes.
5However, on 14, 15 and 18 April 2020, Mr Ng lost a total of $152,000.00 of which he paid $2000 to Mr McLauchlan on 21 September 2020,[5] leaving a balance of $150,000.00 allegedly owed by Mr Ng to Mr McLauchlan. I find on the whole of the evidence that all these bets were placed by telephone.[6]
[5] See Chronology p 11.
[6] While it is alleged by Mr Ng four bets placed by him on 18.04.2020 were made by text message, I accept Mr McLauchlan’s evidence that these were telephone betting transactions and there are ‘clear recordings’ of the bets being placed by Mr Ng. Moreover, with Mr Ng’s abandonment of the text message claim, nothing now turns on this dispute.
6Mr Ng now claims that all bets placed by him with Mr McLauchlan by telephone are void and unenforceable because of a failure by Mr McLauchlan to comply with his obligations under Racing Victoria’s Club Bookmakers’ Licence Rules 2010 (‘Licence Rules’)[7] and Racing Victoria’s Bookmakers’ Telephone Betting Rules 2001 (‘Telephone Betting Rules’).[8]
[7] Effective as at 1 August 2019 CB46–99. These rules are promulgated pursuant to s 91A of the Racing Act.
[8] Effective as at 15 December 2016 CB35–45. These rules are approved by the Minister pursuant to s 4A of the Racing Act.
7In particular, Mr Ng relies on the fact Mr McLauchlan did not obtain Mr Ng’s signature on a form authorising Mr McLauchlan to accept bets by telephone[9] in accordance with rule 4.2 of the Telephone Betting Rules and to lodge a copy of that form with Racing Victoria in accordance with rule 4.1 of the Telephone Betting Rules.[10] Mr Ng further claims Mr McLauchlan breached rule 10.2.2 of the Licence Rules because he engaged in telephone betting with Mr Ng at a time when he had failed to comply with the requirements of the Telephone Betting Rules (‘the alleged breach’).
[9] A blank Bookmaker Client Account Form is at CB192.
[10] Racing Victoria is the body which controls, regulates and administers the sport of thoroughbred racing in Victoria, including registered bookmakers, pursuant to the Racing Act 1958 (Vic) (‘Racing Act’) and it made and is responsible for the administration of the Licence Rules and the Telephone Betting Rules.
8Mr Ng claims that by reason of the alleged breach Mr McLauchlan was not carrying out his bookmaking functions in accordance with Part IV of the Racing Act 1958 (Vic) (’Racing Act’) and, therefore, the bets were not authorised by that Act. This claim appears to be based on former s 2.4.2 of the Gambling Regulation Act 2003 (Vic) (‘Gambling Act’) which was repealed by s 12 of the Gambling and Liquor Legislation Amendment (Modernisation) Act 2014 (Vic), which commenced operation on 1 July 2015. Nonetheless, whether or not Mr McLauchlan was carrying out his functions in accordance with Part IV of the Racing Act remains a live issue in the trial.
9Mr Ng claims that pursuant to s 2.4.1 of the Gambling Act, the bets are void and unenforceable because they constitute ‘unauthorised gambling’. Sub-section 1.3(1) of the Gambling Act defines ‘unauthorised gambling’ to mean ‘gambling that is not authorised by or under this Act or another Act’. ‘Gambling’ is defined in sub-s 1.3AA(1) of the Gambling Act[11] to include, in effect, wagering, which itself is defined to mean ‘pari-mutuel betting on a horse race, harness race or greyhound race’.[12] It is common ground that the activity Mr McLauchlan and Mr Ng were engaging in was ‘wagering’, as defined, and therefore ‘gambling’.
[11] In accordance with s 1.3 of the Gambling Act.
[12] See s 1.3 of the Gambling Act.
10Importantly, Mr Ng further claims that ‘the wagers were … made in contravention of s.2.2.1 of the Gambling Regulation Act 2003 (Vic.)’, presumably, because by receiving the bets in the claimed circumstances, Mr McLauchlan ‘conduct[ed] unauthorised gambling’ contrary to s 2.2.1 of that Act,[13] thereby committing a criminal offence punishable by 1000 penalty units[14] or imprisonment for two years or both.
[13] See Further Amended Defence dated 1 August 2022 (‘FAD’) [11].
[14] At the relevant time a penalty unit was $165.22, making the maximum fine $165,220. See Monetary Units Act 2004 (Vic) s 6 and Victoria, Victorian Government Gazette, No G14, 4 April 2019, 572.
11Further, or in the alternative, Mr Ng claims Mr McLauchlan failed to comply with clauses 3, 7 and 8 of the Victorian Bookmakers’ Association Responsible Gambling Code of Conduct (‘the Code’),[15] in effect at the relevant time, made pursuant to a ministerial direction given under s 10.6.6 of the Gambling Act.[16] The alleged beaches (‘the Code breaches’) are:
Clause 3: A failure to communicate a responsible gambling message to Mr Ng.
Clause 7: A failure to take steps to allow Mr Ng to make a pre-commitment decision when betting with him by offering a service whereby Mr Ng could establish betting limits with Mr McLauchlan.
Clause 8:Accepting bets from Mr Ng on 14, 15 and 18 April 2020 when Mr McLauchlan was obliged not to take such bets because Mr Ng was displaying indictors of distress that may be related to problem gambling, including changing gambling patterns.[17]
[15] Made pursuant to s 10.6.6 of the Gambling Act.
[16] Made in November 2009 and updated in January 2018 CB100–108.
[17] At the relevant time, the Code contained no indicia of what constitutes ‘distress that may be related to problem gambling’. Clause 6 of the present version of the Code, Version 1.03 – Last Updated: 25 September 2020, contains a non-exhaustive list of 17 indicia of distress, including ‘changing gambling patterns’.
12Mr Ng claims by reason of the Code breaches Mr McLauchlan took bets from him on 14, 15 and 18 April 2020 when he was obliged by the Code not to take such bets and that this means taking the bets constitutes unauthorised gambling contrary to s 2.4.1 of the Gambling Act and, consequently, the bets are void and unenforceable.
13Further, or in the alternative, Mr Ng claims ‘the Code constituted contractual warranties’ and that clauses 3, 7 and 8 of the Code ‘contain promises on behalf of the plaintiff as to the level of care that will be taken when wagers are taken and gambling is to occur.’ Mr Ng claims the Code breaches breached the contractual warranties constituted by clauses 3, 7 and 8 of the Code and, accordingly, the bets made by Mr Ng on 14, 15 and 18 April 2020 are void and unenforceable.
14A claim that some of the bets were made by Mr Ng using text message and not by voice over the telephone in breach of the Telephone Betting Rules, with the consequence those bets are void and unenforceable by reason of s 2.4.1 of the Gambling Act, was not pursued by the Mr Ng by the close of trial.[18] I do not need to deal with this aspect of the defence in this judgment.
[18] T121.22–24, FAD [13].
15For the reasons set out below, I find for Mr McLauchlan on his claim.
Pleadings and submissions
16The plaintiff relies on his statement of claim dated 18 June 2021.
17The defendant relies on his further amended defence dated 1 August 2022.
18The plaintiff then relies on his reply to further amended defence dated 11 August 2022.
19Counsel filed an agreed summary of key issues and a chronology both dated 1 August 2022.
20The plaintiff relies on his written opening submissions dated 28 July 2022 and the defendant relies on his amended outline of defendant’s opening dated 1 August 2022.
21After the close of evidence, written closing submissions were made. The plaintiff filed plaintiff’s written closing submissions dated 11 August 2022. The defendant filed outline of defendant’s closing dated 22 August 2022. The plaintiff filed plaintiff’s reply submissions dated 25 August 2022.
22Shortly before publication of these reasons, I sought and received written submissions from the parties addressing the applicability, or otherwise, of the principles stated by the High Court of Australia in Beckwith v The Queen[19] to the resolution of the issues in dispute in this proceeding. I received written submissions from both parties on 29 March 2023.
[19] (1976) 135 CLR 569, 576 (Gibbs J).
Evidence
23Mr McLauchlan, Mr Ian Durrant, a senior wagering administrator and betting supervisor employed at Racing Victoria, and Mr Ng gave evidence at the trial.
24I consider Mr McLauchlan to be an honest and reliable witness. He presented with a good memory of events, was willing to make concessions where appropriate and generally was a confident and impressive witness. I found him to be endeavouring to be honest and straightforward. I accept his evidence generally.
25I do not accept Mr Ng’s criticism that Mr Lauchlan’s ‘credit was impugned by his propensity to argue with Counsel and make long winded speeches rather than to answer the question’. Some of counsel’s questions were quite long and complex and needed to be broken up. On occasions defence senior counsel asked the same or a similar question several times. On one occasion defence senior counsel asked the same question, or versions of it, seven times in a row.[20] Admittedly, Mr McLauchlan did show his frustration with counsel and I felt the need to intervene.[21] One of the so-called ‘long winded (sic.) speeches’ Mr Ng refers to was as a consequence of a lengthy interaction between me and the witness, made at my instigation, which I found very helpful in understanding Mr McLauchlan’s state of mind regarding whether, on 18 April 2020, Mr Ng was displaying any indicators of distress that may be related to problem gambling.[22] Overall, I consider Mr McLauchlan was genuinely trying his best to answer questions truthfully and assist the Court.
[20] T186.26–188.4.
[21] T188.5.
[22] T198.16–T202.19.
26Mr Durant gave formal and largely uncontroversial evidence. I accept his evidence.
27I do not accept Mr Ng’s evidence, save where it is supported by contemporaneous documents or supported by other witnesses. In particular I do not accept his evidence that he was exhibiting obvious symptoms of problem gambling in any of his dealings with Mr McLauchlan. Nor do I accept his evidence that had Mr McLauchlan taken steps to allow him to make a pre-commitment decision when betting with Mr McLauchlan he would have set a $35,000.00 limit. Mr Ng struck me as a witness who went out of his way to give answers which he considered would be favourable to his case rather than giving truthful answers.
Documents
28The documents that were referred to in evidence, or agreed between counsel as relevant, were listed in an agreed court book index, and formed part of Exhibit A. Additionally, I received in evidence the largely agreed Chronology[23] (Exhibit B) and a document tendered by Mr Ng called ‘Summary of Bets’ (Exhibit 1).
[23] Dated 1 August 2022.
29I have considered all these documents.
The facts bearing upon the issue whether this was of unauthorised gambling by reason of a failure to comply with the Telephone Betting Rules
30Many of the facts bearing upon the issue of unauthorised gambling are agreed or not in dispute. On this basis, I find as follows:
(a) At all relevant times Mr McLauchlan was a registered bookmaker fielding during the holding of various horse race meetings licensed under Victorian law.
(b) All of Mr McLauchlan’s betting interactions with Mr Ng occurred either on racecourses licensed under Part I of the Racing Act or at approved off-course premises.
(c) Between 1 February 2020 to 18 April 2020 (both inclusive), Mr Ng bet by way of wagering on horse races with Mr McLauchlan as set out in the ‘Statement of Activity’ annexed to the statement of claim and the document described in the court book index as ‘Racing Victoria – Recorded Wagers taken by David McLauchlan from Allen Ng[24] (‘the betting records’). These bets are itemised in the materially agreed Chronology.[25]
(d) The bets were made by Mr Ng with Mr McLauchlan at times when the latter was present on a racecourse or at approved off-course premises.
(e) The betting records disclose Mr Ng’s net position at the end of 18 April 2020 was that his losing bets over the period 14 to 18 April 2020 exceeded his winning bets over that period by $152,000.
(f) On 21 September 2020, Mr Ng paid Mr McLauchlan $2,000.
(g) There is no suggestion the bets were not properly recorded with Racing Victoria or that any levy payable on the bets has not been paid.[26]
(h) The bets the subject of this proceeding were made by telephone[27] to which the Telephone Betting Rules applied.
(i) The Licence Rules, Telephone Betting Rules and the Code applied to Mr McLauchlan as a registered bookmaker. Specifically, rules 10.1 and 10.2 of the Licence Rules applied to Mr McLauchlan.
(j) Mr McLauchlan did not obtain a signed Bookmaker Client Account Form from Mr Ng or lodge same with Racing Victoria.[28]
(k) On 26 February 2020, Mr McLauchlan provided a copy of the defendant’s Victorian driver licence to stewards of Racing Victoria at Sandown Racecourse.[29]
[24] CB175-177.
[25] Ex B.
[26] Cf. Defina v Kenny (1946) 72 CLR 164.
[27] See Outline of Defendant’s Closing, dated 22 August 2022 (‘Defendant’s Closing’) [3].
[28] Reply to Further Amended Defence, dated 11 August 2022 (‘Reply’) [3(a)] and [4(a)].
[29] See Chronology p 3 and CB187.
31I accept Mr McLauchlan’s evidence as follows:
(a) Before receiving any credit bets from Mr Ng, Mr McLauchlan obtained Mr Ng’s name, address, banking details, email address and mobile telephone number, which he entered into a computer at a racecourse using a software program provided by a supplier approved by Racing Victoria.[30] This computer was linked to Racing Victoria via an intranet. This action was necessary in order to obtain a code required by Racing Victoria to create a credit betting facility for Mr Ng.
(b) Mr McLauchlan added Mr Ng’s date of birth to this computer record after he obtained a copy of Mr Ng’s driver licence on 26 February 2020.
(c) At all relevant times, Racing Victoria could access these computer records.[31]
Mr McLauchlan’s evidence regarding these matters was unchallenged. It was not directly contradicted by Mr Durrant and Mr Ng was in no position to contradict this evidence.
[30] T165.15–166.3.
[31] T96.19–97.17, T165.8–166.27.
Analysis
Were the bets void and unenforceable as ‘unauthorised gambling’ because of the plaintiff’s breach of the Telephone Betting Rules?
32The plaintiff contends this is a simple matter. Mr Ng lawfully placed bets with Mr McLauchlan in his capacity as a registered bookmaker and, having lost, he now refuses to pay the amount outstanding of $150,000.
33The defendant contends he is not liable to pay Mr McLauchlan the debt claimed, or at all, because the gaming or wagering agreements are void as the gaming or wagering to which they relate is unauthorised gambling in the absence of a signed written authority in breach of the Telephone Betting Rules. The defendant’s submission proceeds:
The plaintiff in contravention of Rules 4.1 and 4.2 of the Bookmaker Telephone Betting Rules 2001 has failed to obtain a signed written authority from the defendant as client in the form prescribed (or at all) and failed to lodge the signed written authority with the Betting Supervisor of the Controlling Body. Such non-compliance invalidates all bets made with the bookmaker and renders such bets void, including those the subject of this proceeding.
34As noted above,[32] Mr McLauchlan admits he did not obtain a signed Bookmaker Client Account Form from Mr Ng or lodge same with Racing Victoria.[33]
[32] Above [30(j)].
[33] Reply (‘Reply’) [3(a)] and [4(a)].
35The resolution of this aspect of the proceedings depends upon an exercise in statutory interpretation conducted along a labyrinthine path extending through the Gambling Act, the Racing Act, the Minister’s approval of methods of communication for bookmakers accepting bets[34] (‘Minister’s approval’) and the Telephone Betting Rules. In my opinion, the License Rules do not greatly assist me in this process.
[34] Victoria, Victorian Government Gazette, No G 8, 19 February 2009, 352–53 (CB204–205).
36The argument in favour of enforceability of the bets in this case was greatly simplified by the repeal in 2014 of s 2.4.2 of the Gambling Act, which rendered not void under the former s 2.4.1 a number of transactions including ‘any bet made with a registered bookmaker while the bookmaker is carrying on their business or vocation in accordance with Part 5A of Chapter 4, being a bet— (i) made in accordance with section 4 of the Racing Act 1958 …’.
37Under s 2.4.1 of the Gambling Act, as it applies in this case, a wagering contract or agreement (whether written or not) is void if the wagering to which it relates is ‘unauthorised gambling’, being wagering that is not authorised by or under the Gambling Act or another Act.[35] I agree with the plaintiff’s submission that the bets in this case were not ‘unauthorised gambling’ as defined because all bets were authorised by ‘another Act’, being s 4 of the Racing Act.
[35]Gambling Act s 1.1.
38Turning to the provisions of s 4 of the Racing Act:
(a) Divisions 5 and 6 of Part 5 of Chapter 4 of the Gambling Act do not apply in this case.
(b) The betting was by way of wagering on horse races in accordance with the section. Because:
(i)There is no suggestion the relevant racecourses were not relevantly licensed.
(ii)The bets were made with a registered bookmaker, Mr McLauchlan.
(iii)At the time the bets were made, Mr McLauchlan was present on the racecourse or at an approved off-course premises.
(iv)The bets were made by Mr Ng using a method of communication approved by the Minister under s 4A of the Racing Act. This requirement needs further examination.
39Under s 4A of the Racing Act, the Minister approved a method of communication to be used by bookmakers to accept bets from persons not present on the racecourse on which the bookmaker is carrying on business. The approved method involves the use of communications by telephone utilising the dedicated PABX system with mobile telephone extensions and associated voice recording equipment installed at the premises of Racing Victoria on certain listed exchange numbers.[36]
[36] Victoria, Victorian Government Gazette, 19 February 2009, No G 8, 352–353 (CB204–205).
40I accept on all the evidence the bets in this case were placed using the method of communication approved by the Minister. Mr McLauchlan gave some uncontradicted evidence strongly suggestive of this[37] and the output from the Racing Victoria computer system relating to the relevant bets was produced and is in the court book.[38] Moreover, while they were not played into evidence, the telephone recordings themselves also form part of the court book via a Dropbox link.[39]
[37] Mr McLauchlan gave uncontradicted evidence to this effect eg T155.8–15, T165.8–166.27, T167.10–14, T168.4–22, T203.16–204.16.
[38] CB175–177.
[39] CB201.
41However, the Minister’s approval of this method of communication is subject to certain conditions, including: ‘(iv) all betting transactions and communications must be conducted in accordance with Racing Victoria’s Bookmaker Telephone Betting Rules 2001’.
42The question for me is, whether Mr McLauchlan’s admitted breaches of rules 4.1 and 4.2 of the Telephone Betting Rules have the consequence that all bets placed by Mr Ng with him are void and unenforceable as constituting ‘unauthorised gambling’ because, in breach of the aforementioned condition, the bets were not made using a method of communication approved by the Minister and, for that reason alone, the bets were not ‘authorised’ under s 4 of the Racing Act. In these circumstances, Mr McLauchlan would have conducted unauthorised gambling under s 2.2.1(1) of the Gambling Act and would have committed a criminal offence in respect of each of over two hundred and seventy bets,[40] each offence being punishable by a maximum penalty of a $165,220 fine and/or 2 years’ imprisonment.
[40] See Summary of Bets (Ex 1). This assumes the alleged offending conduct is not considered to constitute the commission of a continuing offence or offences. See Giretti v The Queen (1986) 24 A Crim R 112.
43This would be an extraordinary and wholly disproportionate outcome for a failure to obtain a signed form and lodge it with the appropriate body. In my view, it is an outcome that could not have been intended by the legislature. No statutory provision or rule expressly provides for such an outcome. Moreover, the Licence Rules and the Telephone Betting Rules, while authorised by the Racing Act, do not have the status same as regulations made under that Act.[41]
[41] See Willingale v Norris [1909] 1 KB 57, followed in Sinclair v Brown Coal Liquefaction (Victoria Pty Ltd) [1992] 1 VR 190, cited by Judge Driver in Hudson v Sigalla at fn 123.
44There is no direct authority on point. The obiter dicta of Judge Driver in Hudson v Sigalla,[42] on which Mr Ng relies, is distinguishable both on the law and on the facts. The case dealt with the interpretation of the repealed provision in 2.4.2 of the Gambling Act, which is quite different from the current provisions. The words ‘any bet made’ and ‘while the bookmaker is carrying on their business or vocation in accordance with Part IV of the Racing Act 1958’ in the former 2.4.2 make a crucial difference between Judge Driver’s reasoning and its applicability to the operation of the current provisions.[43]
[42] [2014] FCCA 1652 [109]–[127].
[43] See particularly ibid [111]–[112], [125]–[126].
45Moreover, in Hudson v Sigalla the bets in issue were not recorded or reported to Racing Victoria. Whereas here, the evidence is all bets were fully recorded against Mr Ng’s name and were reported to Racing Victoria, which also had access to records submitted by Mr McLauchlan containing, inter alia, Mr Ng’s address and, from 26 February 2020, his date of birth.
46Finally, in Hudson v Sigalla Judge Driver did not finally determine the Gaming Regulation Act issues before him, but granted leave to the applicant so those matters could be litigated in the NSW Supreme Court.[44]
[44] See Hudson v Sigalla [2015] FCAFC 140 [43]–[47].
47Mr Ng also relies on some obiter comments in the judgment of Mortimer J in Guy v Crown Melbourne Ltd (No 2) (‘Guy’)[45] where her Honour said, inter alia, that the conduct of gaming is lawful when conducted in an approved venue in accordance with Chapter 3 of the Gambling Act. If compliance is not maintained then the gaming is no longer approved under the Act.[46] If the gaming is not approved under the Act, it is unauthorised, despite the gaming occurring in an approved venue. Mr Ng submits, although Guy relates to gambling on poker machines, this reasoning is applicable to the present case.
[45] (2018) 355 ALR 420; [2018] FCA 36.
[46] Ibid [119]–[121].
48The decision in Guy does not assist me to determine the issues in this case. Mortimer J was there dealing with a consumer protection claim relating to misleading and deceptive conduct and, alternatively, unconscionable conduct, brought against a casino operator and the manufacturer of gaming machines with respect to the operation of a particular type of electronic gaming machine, and whether certain representation were made by the casino operator in making the machine available for gambling and/or the manufacturer in supplying the machines. In the course of her judgment, her Honour conducted a brief survey of the provisions of the Gaming Act relating to the operation of casinos and the regulation of electronic gaming machines. It is clear her Honour was not intending to determine any matters relating to the interpretation of those provisions. In any event, the legislative provisions her Honour was dealing with in Guy are entirely different from those in this case.
49Mr McLauchlan seeks to draw a distinction between the rules relating to opening a betting account and those relating to the conduct of telephone betting transactions. He submits, while the appropriate form was not obtained and lodged when Mr Ng’s betting account was opened, each individual telephone bet was placed by Mr Ng with Mr McLauchlan using the dedicated Racing Victoria system, which meant each and every bet was voice recorded and was recorded by Mr McLauchlan in his betting ledgers, including the full name of the defendant as the client and that it was a telephone bet, all of which, he submits, was in accordance with the Telephone Betting Rules.
50In my opinion, the document described in the court book as ‘Racing Victoria – Recorded Wagers taken by David McLauchlan from Allen Ng’,[47] which Mr McLauchlan had not seen before giving evidence on 3 August 2022,[48] demonstrates this is the case.[49]
[47] CB175–177.
[48] T168.4–22.
[49] See also the evidence of Durrant T149.21–150.22.
51Moreover, I accept that, while there was not full compliance with the License Rules and the Telephone Betting Rules, there was substantial compliance with those rules. Mr McLauchlan had verified the defendant’s identify[50] and shown that verification to a betting supervisor well before engaging in the wagering the subject of this proceeding.
[50] As required by rule 15.2.3 of the Licence Rules.
52Accordingly, Mr McLauchlan submits, all betting transactions and communications (meaning the actual placing of the bets) were conducted in accordance with the Telephone Betting Rules and, therefore, condition (iv) of the Minister’s approval has been complied with in this case. In other words, a failure to open Mr Ng’s betting account in accordance with the Telephone Betting Rules does not mean the betting transactions and communications were not authorised under the Racing Act.
53So far as Mr McLauchlan’s submission regarding s 91A of the Racing Act is concerned, the Telephone Betting Rules are not made pursuant to that section. Section 91A is expressed to be ‘For the purposes of section 91’ and deals with making rules pertaining to the licencing of bookmakers. I do not consider any breach of the Licence Rules by Mr McLauchlan is presently relevant in light of the repeal of the former section 2.4.2 of the Gambling Act. Nonetheless, I accept Mr McLauchlan may face disciplinary action by Racing Victoria or the Stewards for his admitted breaches of the Licence Rules and /or the Telephone Betting Rules.
54The Minister’s approval forms an integral part of a raft of statutory provisions and rules which inform the question whether a person has conducted ‘unauthorised gambling’ and, thereby, committed the actus reus of an offence under s 2.2.1(1) of the Gambling Act.[51] In this sense, the Minister’s approval of the method of communication for remote betting has a penal element. If the method of communication is not an approved one, the wagering is not authorised under s 4 of the Racing Act and, unless it is otherwise authorised, would satisfy the element of being ‘unauthorised gambling’ for an offence under s 2.2.1(1) of the Gambling Act.
[51] It is unnecessary for me to resolve the difficult question whether s 2.2.1 of the Gambling Act creates an offence of strict or absolute liability. See eg DPP v Stanojlovic (2017) 53 VR 90 (Jane Dixon J).
55Consistently with the rule of statutory construction referred to by Gibbs J in Beckwith v The Queen,[52] any ambiguity in the meaning and content of the term ‘unauthorised gambling’ should be resolved in favour of Mr McLauchlan. However, I accept the authorities emphasise that this rule is one of last resort.[53]
[52] (1976) 135 CLR 569, 576 (Gibbs J). See also Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129, 145 (Mason, Dean and Dawson JJ); Waugh v Kippen (1986) 160 CLR 156, 164 (Gibbs CJ, Mason, Wilson and Dawson JJ).
[53] Newcastle City Council v GIO General Ltd (1997) 191 CLR 85, 102–3 (Toohey, Gaudron and Gummow JJ); Aubrey v The Queen (2017) 260 CLR 305, 325–326 [39] (Kiefel CJ, Keane, Nettle and Edelman JJ).
56The words ‘unauthorised gambling’ are to be construed consistently under the Gambling Act as they are defined in s 1.3 for the purposes of the Act. Therefore, the words used in s 2.2.1(1) must have the same meaning and content as the words used in s 2.4.1 of the Act. Accordingly, the rules of construction referred to above must be consistently applied in this case.
57Recently, Kiefel CJ and Keane J in R v A2[54] summarised the Beckwith principle as follows:
A statutory offence provision is to be construed by reference to the ordinary rules of construction. The old rule, that statutes creating offences should be strictly construed, has lost much of its importance. It is nevertheless accepted that offence provisions may have serious consequences. This suggests the need for caution in accepting any “loose” construction of an offence provision. The language of a penal provision should not be unduly stretched or extended. Any real ambiguity as to meaning is to be resolved in favour of an accused. An ambiguity which calls for such resolution is, however, one which persists after the application of the ordinary rules of construction.[55]
In the same case, Edelman J said:
There might sometimes be a fine line between asking: “In light of its legislative purpose, what would Parliament have intended in these circumstances?” and asking: “Does the intended meaning of the words used by Parliament extend to these circumstances?” But the proper question to ask in statutory interpretation is always the latter. Where the relevant meaning of the words of a statute concerns a criminal offence it is particularly important to respect the difference between the two questions, lest the judiciary create, and apply retroactively, a new criminal offence.[56]
[54] (2019) 269 CLR 507.
[55] Ibid 525–526 [52] (citations omitted).
[56] Ibid 560 [165]. See also ibid [163]–[164].
58Mr Ng submits, that in interpreting s 2.2.1(1) of the Gambling Act ‘the rule of strict construction ought to be applied’[57] and that ‘it is plainly obvious that the legislature intended for the words of the provision [scil. ‘unauthorised gambling’] to be interpreted narrowly’,[58] and the provision is not ‘to be construed liberally’.[59] However, Mr Ng further submitted in a ‘wider context’ that ‘by virtue of the definition of “unauthorised gambling”, it can be inferred that the legislature intended for [the section’s] application to have a broad reign’;[60] broad enough to catch the present transactions within its scope.
[57] Written Submissions dated 29 March 2023 [2], [24] and [26].
[58] Ibid [16].
[59] Ibid [17].
[60] Ibid [19] and [26].
59Mr McLauchlan submits, the meaning of ‘unauthorised gambling’ is unambiguous and the intended meaning of those words does not extend to the circumstances of this case. Accordingly, it is unnecessary to have recourse to the rule of ‘last resort’. However, Mr McLauchlan emphasises Kiefel CJ’s and Keane J’s warning that there is a need for caution in accepting any ‘loose’ construction of the relevant provisions so their language is not unduly stretched or extended.
60Mr McLauchlan further submits, the construction of ‘unauthorised gambling’ Mr Ng contends for requires the Court to unduly stretch or extend the language of the relevant provisions thereby impermissibly creating of a new criminal offence.
61Finally, Mr McLauchlan submits if, contrary to his submission the meaning of ‘unauthorised gambling’ is unambiguous, the Court considers there is ambiguity or doubt in the words of the relevant provisions, then they are to be strictly construed and resolved in favour of Mr McLauchlan by refusing to extend the categories of criminal offences.
62In my opinion, whilst the words of s 2.2.1(1) are superficially clear and unambiguous, this begs the question of how widely the term ‘unauthorised gambling’ is to be construed. Is it intended by the legislature that relatively minor infractions of the Telephone Betting Rules has the result that the method of communication is not authorised by the Minister, leading to the consequence the wagering is not authorised under s 4 of the Racing Act and therefore constitutes ‘unauthorised gambling’? I consider this is not an intended outcome.
63Had the Minister intended that any infraction of the Telephone Betting Rules, no matter how minor, would result in the method of communication used by the bookmaker to accept the bet was not a ‘method approved by the Minister’ under s 4(4)(b) of the Racing Act, he or she could have made this clear in the notice published in the Government Gazette.
64In this context, it is instructive to compare the wording of the notice relating to telephone betting with the notice relating to internet betting. The latter notice provides:
Under section 4A of the Racing Act 1958, an internet betting system approved and certified by Racing Victoria (within the meaning of the Racing Act 1958) in accordance with Racing Victoria’s Bookmaker’s Internet Betting Rules 2001 and operated in compliance with the terms and conditions set by those Rules is an approved method of communication which may be used by registered bookmakers or approved substitutes to accept bets from persons not present on the racecourse on which the bookmaker is carrying on business.
This form of notice makes it clear that operational compliance with the ‘terms and conditions’ of Racing Victoria’s Bookmaker’s Internet Betting Rules 2001 is an essential element of the Minister’s approval of this method of communication.
65Accordingly, I conclude that Mr McLauchlan’s admitted failure to obtain a Bookmaker Client Account Form from Mr Ng and lodge it with Racing Victoria in breach of the Telephone Betting Rules does not have the effect that the method of communication used by Mr McLauchlan to make ‘the bets’ was not one approved by the Minister under s 4A of the Racing Act. In my opinion, all bets the subject of these proceedings were authorised under s 4 of the Racing Act, and for that reason, the bets were not made in contravention of the Gambling Act and they did not involve ‘unauthorised gambling’ under the Gambling Act.
66Finally, the question whether Mr McLauchlan has committed a disciplinary offence or offences by failing to obtain a Bookmaker Client Account Form signed by Mr Ng and lodge it with Racing Victoria, or otherwise, is not relevant to my determination of the issues in this case, and I make no finding to that effect.
Were the bets void and unenforceable as ‘unauthorised gambling’ because of Mr McLauchlan’s alleged breaches of the Responsible Gambling Code of Conduct?
67Mr Ng submits the gaming or wagering agreements are void as the gaming or wagering to which they relate is unauthorised gambling by reason of Mr McLauchlan’s contravention of clause 3,[61] alternatively clause 7, alternatively clause 8 of the Code.
[61] I accept Mr McLauchlan’s submission in his Reply at page 2 fn 7 that the provisions of the Code are more properly referred to as ‘clauses’ and not ‘rules’. The Code does not have the force and effect of subordinate legislation. The Code of Banking Practice, referred to in the authorities Mr Ng relies on, refers to clauses of that Code. See also Defendant’s Closing [22] where Mr Ng refers to the parts of the Code as ‘clauses’.
68The Code is enacted pursuant to s.10.6.6(1) of the Gambling Act, which empowers the Minister to give a direction as to:
(a) the standards and requirements that a Responsible Gambling Code of Conduct implemented by a relevant person must meet; and
(b) the content that must be included in a Responsible Gambling Code of Conduct implemented by a relevant person.
The Minister has given such a direction by publishing it in the Victorian Government Gazette in accordance with s 10.6.6(3) of the Act (‘the ministerial direction’).[62]
[62] Victoria, Victorian Government Gazette, No S 430, 17 September 2018, 3–6 (CB195–98).
69In accordance with the ministerial direction, as ‘a relevant person’ the Victorian Bookmakers Association has made the Responsible Gambling Code of Conduct (‘the Code’)[63] which is approved by the Victorian Commission for Gambling Regulation.[64] The Code is stated to record an individual bookmaker’s commitment to maintaining appropriate standards so as to ensure that the conduct of their business will foster responsible gambling. The Code takes the form of a number statements that bookmakers will do various things.
[63] Dated November 2009 and updated January 2018 (CB100–108).
[64] The Commission is established under Part 2 of the Victorian Commission for Gambling and Liquor Regulation Act 2011. Its relevant function, powers and duties are set out in Part 1 of Chapter 10 of the Gambling Act.
70Relevantly, clauses 3, 7 and 8 provide as follows:
Clause 3:‘I will communicate my responsible gambling message (as outlined in the ‘Definitions” section of this Code) by ensuring that the message is displayed in all betting tickets issued by me at a venue. The message will also be displayed in a prominent position on my website (if applicable).
‘The responsible gambling message will be communicated to my telephone and/or internet betting account customers (if applicable) via the inclusion of the message on the relevant account opening application form.
‘Responsible Gambling Message’ is defined to mean: ‘the statement prescribed by section 4.7.9 of the Act.[65] If no statement is prescribed then the statement shall be the phrase “Bet Responsibly” accompanied by words that identify the name of, and provide a current contact number for Gambler’s Help Services.’
Clause 7:‘Consistent with my commitment to responsible gambling I will implement strategies to allow my customers to make a pre-commitment decision when betting with me.
‘In the case of telephone betting, I will offer a service whereby account customers may establish betting limits with me. This service will be made available upon the opening of the account or at any time thereafter.’
Clause 8:‘I will interact with my customers so as to foster responsible gambling. I will do this by:
‘A number of ‘interactions’ are listed including relevantly:
‘Not accepting bets from any customer displaying indicators of distress that may be related to problem gambling.’
[65] I was not advised by either party whether a statement has been prescribed under s 4.7.9 of the Gambling Act.
71Mr Ng contends that gambling undertaken in contravention of the Code constitutes unauthorised gambling within the meaning of s 2.4.1 of the Gambling Act. He relies partly on the fact one of the ‘main objectives’ of the Gambling Act is
(a) to foster responsible gambling in order to— (i) minimise harm caused by problem gambling; and (ii) accommodate those who gamble without harming themselves or others.[66]
[66] Section 1.1(2)(a).
Mr Ng further relies on the purposes of Chapter 2 of the Act, which deals with ‘General prohibitions and authorisations’ and contains ss 2.2.1 and 2.4.1. These include:[67]
(a) to prohibit unauthorised gambling; and
(b) to authorise certain types of gambling; and
(d) to void contracts and agreements relating to unauthorised gaming or wagering.
[67] Section 2.1.1.
72Mr Ng alleges that Mr McLauchlan breached the following clauses contained in the Code:
(a) Clause 3 – by not communicating a responsible gambling message to the him.
(b) Clause 7 – by not communicating to him any entitlement that he could make a pre-commitment decision; that is, place a credit limit on his betting.
(c) Clause 8 – by accepting bets from him on 14, 15 and 18 April 2020 when Mr McLauchlan was allegedly obliged not to accept such bets because Mr Ng was displaying indicators of distress that may be related to problem gambling.
73Mr McLauchlan submits he did not breach the Code by accepting bets from Mr Ng on 14, 15 and 18 April 2020 as Mr Ng was not displaying indicators of distress that may be related to problem gambling.
74I observe, under section 4.5A.14(ea) of the Gambling Act repeated breaches by the bookmaker of the Code may be grounds for disciplinary action, however, any such breaches do not make any bets unauthorised gambling.
The facts bearing upon the issue of unauthorised gambling by reason of failure to comply with the Code
Clause 3
75On the whole of the evidence, I find Mr McLauchlin did not communicate a responsible gambling message to Mr Ng in the manor prescribed by the Code for telephone betting account customers. However, I am well satisfied Mr Ng, from his past dealings with bookmakers, including on-course betting with Mr McLauchlan, was well aware of the content of such a message.
76Mr McLauchlin did not have a website.[68] The bets the subject of this proceeding were all made by telephone. There was no ‘account opening application form’ relating to Mr Ng’s account. However, Mr McLauchlan gave evidence, which I accept, that his betting slips provided by Racing Victoria for on-course betting, including those provided to Mr Ng, did contain a responsible gambling message.[69] In my opinion, Mr Ng, who was a very experienced and active punter, would be expected to have seen this message many times in the past.
[68] T173.25–31.
[69] T174.8–17, T174.25–176.14.
77Accordingly, I find Mr McLauchlan’s failure to comply with clause 3 of the Code could have had no effect on Mr Ng’s decision to place the bets the subject of this proceeding. Mr Ng gave no evidence that this breach of the Code had any effect on his decision to place any or all of the bets.
Clause 7
78On the whole of the evidence, I find Mr McLauchlin did not communicate to Mr Ng that Mr Ng could establish betting limits with him, neither upon the opening of the betting account, nor at any other time. Mr McLauchlan admitted as much in his evidence.[70] Moreover, Mr Ng gave evidence, which I accept, that Mr McLauchlan never raised with him the possibility of making a pre-commitment decision.[71]
[70] T176.15–31.
[71] T210.29–211.23.
79However, I do not accept that, had Mr Ng been told about the possibility of implementing a betting limit, he would have taken advantage of the opportunity. His evidence in this regard was unconvincing. He seemed to pluck the figure of $30,000 out of the air. Given the number and size of his bets, the professional nature of his betting operation and his general demeanour as described by Mr McLauchlan, which I accept, I am not satisfied Mr Ng would have availed himself of the opportunity to impose any limit on his ability to bet. Accordingly, McLauchlan’s failure to communicate the required information to Mr Ng has had no effect on Mr Ng’s decision to place the bets the subject of this proceeding.
80Once again, in these circumstances, such a technical breach of the Code could not result in the betting being ‘unauthorised gambling’ under the Gambling Act. Again, Mr Ng wholly fails to explain how, as a matter of law, a breach of the Code leads to the consequence that the betting in this case is unauthorised gambling.
81This conclusion does not mean there are no consequences for Mr McLauchlan for breaching the Code. A largely self-regulated complaints process is provided for in clause 11 of the Code.[72] If the bookmaker does not satisfy the aggrieved customer through this process, in certain, but not all, circumstances the aggrieved customer can report the bookmaker’s conduct to the Victorian Bookmakers’ Association Limited. The aggrieved customer can also make a complaint to the Victorian Commission for Gambling Regulation. In the last resort, the complaint can be referred by the bookmaker, with the consent of the customer, to the Institute of Arbitrators and Mediators Australia for resolution.
[72] CB105.
82Needless to say, there is no evidence Mr Ng availed himself of this process or made any complaints to relevant bodies. In my opinion, the existence of this complaints process provides another basis for concluding the betting in this case is not unauthorised gambling under the Gambling Act.
Clause 8
83Mr McLauchlan submits no expert evidence was led by Mr Ng that changed gambling patterns may be an indicator of distress that may be related to problem gambling. Instead, Mr Ng relies on the fact that a later version of the Code contained a non-exhaustive list of 17 possible of indicators of distress, including ‘changing gambling patterns’.[73] Mr McLauchlan gave evidence, which I accept, that, as far as he was concerned, changed gambling patterns is not an indicator of distress that may be related to problem gambling.[74] Mr McLauchlan submits, in the absence of expert evidence, the Court should not consider changed gambling patterns to be such an indicator.
[73] Australian Bookmakers’ Association, Responsible Gambling Code of Conduct, 25 September 2020, cl 6.
[74] T186.26-31, T187.24-28.
84It is unnecessary for me to conclusively rule on this submission because, on the whole of the evidence, I find it was not apparent, nor should it reasonably have been apparent, to Mr McLauchlan that on or before 18 April 2020 Mr Ng was displaying indicators of distress that may have been related to problem gambling. The only indicator of distress Mr Ng relies upon is his allegedly changed gambling pattern after 13 April 2020. He fairly conceded Mr McLauchlan knew nothing of his ‘surrounding circumstances’.[75]
[75] See Defendant’s Closing [33].
85Moreover, there is no evidence Mr Ng told Mr McLauchlan he was distressed or a ‘problem gambler’. Nor did he request that Mr McLauchlan provide him with ‘appropriate information as to help available to [him] … about or assistance with a gambling problem’.[76] Nor did Mr Ng seek ‘voluntary exclusion from betting’.[77] On the contrary, Mr Ng gave evidence that at no point prior to 18 April 2020 did he discuss with Mr McLauchlan that he was ‘under stress’ or he was a ‘problem gambler’.[78]
[76] The Code cl 8 CB104.
[77] Ibid.
[78] T215.18–23.
86Indeed, Mr Ng did not appear to have much understanding of what constitutes ‘problem gambling’. He thought a problem gambler was ‘probably losing control’[79] and at the end of the day on 18 April 2020, Mr Ng thought he was a problem gambler because ‘he couldn’t afford to pay [Mr McLauchlan]’.[80] In cross-examination, Mr Ng made the extraordinary statement ‘When you’re winning, of course you’re not distressed, are you?’ This was at the time Mr Ng placed his first bet on 18 April 2020, a bet of $10,000 which returned him $7,500.
[79] T213.6-10, T228.3–13.
[80] T213.12–17.
87I accept Mr Ng regularly bet amounts of $2000 and above, including the bets listed in Mr McLauchlan’s Reply to Further Amended Defence (‘Reply’) at paragraph [10], which is confirmed by the agreed items in the Chronology[81] and the ‘Summary of Bets’ document.[82] That Chronology shows, inter alia, agreed bets of $25,000, $15,000 and two bets of $10,000 on 13 March 2020; an agreed bet of $20,000 on 14 March 2020; and agreed bets of $22,500, $15,000 and three bets of $10,000 on 27 March 2020, all placed at times when it is not claimed Mr Ng was displaying indicators of distress that may have been related to problem gambling.
[81] Ex B.
[82] Ex 1. It appears the bet on 14 April 2020 of $2,000 has been left out of this summary (See CB185, Chronology (Ex B) p 9).
88Since the Code breaches claim requires a consideration of Mr McLauchlin’s state of mind regarding Mr Ng’s level of distress or otherwise at any given time, any comparison of the average daily amounts of bets is artificial and unhelpful. There is no evidence Mr McLauchlan made such calculations in respect of Mr Ng’s gambling pattern or should have done so.
89Moreover, there was only one bet of $2,000 placed on 14 April 2020 and the average of all bets placed on 15 April was $1,458.33. This betting pattern could not reasonably be expected to raise any concerns in Mr McLauchlan’s mind that Mr Ng was at that time displaying any indicators of distress that may be related to problem gambling. It is Mr Ng’s circumstances during the period 14 to 18 April 2020 that is relevant for present purposes, not subsequent events.[83]
[83] Cf Mr Ng’s evidence at T205.25–30 and T225.4–26.
90At 5.18 pm on 15 April 2020, after the end of the day’s racing, Mr Ng text messaged Mr McLauchlan as follows: ‘Balance pls. (scil. please) I’ll bet this Sat. Can we settle next Monday with cash after that.’[84] Mr McLauchlan submits this text message ‘is evidence that the defendant was not displaying indicators of distress to the plaintiff on 15 April 2020’.[85] I agree.
[84] CB164.
[85] Original emphasis.
91I also accept Mr McLauchlan’s submission that I can use my rejection of Mr Ng’s evidence that he was displaying indicators of distress which may be related to problem gambling on 14 and 15 April 2020, to cast doubt on the genuineness of his assertion that he was displaying such indictors of distress on 18 April 2020.
92Turning to 18 April 2020, while it is true the average of all bets placed by Mr Ng on that day is $9,468.75, Mr McLauchlan could not have known this figure until the end of the day’s racing and Mr Ng may well have placed one or more winning bets towards the end of that racing day which would have completely changed the overall betting pattern and the net result. The Chronology discloses this behaviour had regularly occurred in the past, for example, on 8, 21, 22 and 26 February 2020, 4, 7, 11 and 27 March 2020 and 11 April 2020. Apparently, this practice of increasing the size of bets towards the end of a day in order to recoup earlier losses is not uncommon among ‘professional punters’ and in horse racing parlance is called ‘blasting out’.[86]
[86] T106.19–107.9. See also T157.17–30; T182.28–183.3, T187.6–12..
93Moreover, against the amount of the average bet on 18 April 2020 one needs to have regard to the fact Mr Ng lost $60,000 on 13 March 2020 and a further $25,000 the next day, at a time when it is not alleged he was displaying the indica of a problem gambler. Indeed, it is an agreed fact that Mr Ng paid $85,000 in cash to Mr McLauchlan on 20 March 2020 at a time when Mr Ng was admittedly not ‘in distress’.[87] At that time, Mr McLauchlin observed Mr Ng to be driving a new Porsche motor vehicle, estimated to be worth around $160,000 to $180,000,[88] and Mr Ng appeared to Mr McLauchlan to be ‘very flippant’ regarding his losses.[89]
[87] T54.31–55.23.
[88] T111.18–21.
[89] T111.10–29.
94Importantly, I accept Mr McLauchlan’s evidence that, to his mind, there was another logical explanation for the pattern of Mr Ng’s betting strategy, both generally and particularly on 18 April 2020, which was not an indicator of distress caused by problem gambling. Mr McLauchlan explained this strategy in detail during his evidence.[90] In this context, it is significant that 18 April 2020 was a Saturday and the races Mr Ng bet on (except one) were held at Randwick, Sydney’s number one racecourse, and Caulfield, Melbourne’s equal number one racecourse.[91] According to Mr McLauchlan’s evidence, which I accept, had Mr Ng’s strategy worked, he would have been up $238,000 on the day’s betting.[92]
[90] T152.6–10, T187.1–23, T193.15–195.1, T19715–202.19.
[91] T194.18–25.
[92] $418,000 – $135,000. See T202.15–19.
95This evidence is particularly when one’s enquiry is directed, as it must be, to Mr McLauchlan’s subjective state of mind regarding whether Mr Ng’s betting pattern on 14, 15 and 18 April 2020 was an indicator of distress that may be related to problem gambling.
96Mr McLauchlan gave evidence, which I accept, that prior to 18 April 2020 he considered Mr Ng to be ‘quite a smart and savvy punter’.[93] Indeed, he described Mr Ng as a ‘genius’.[94] Mr McLauchlan considered Mr Ng was professional in his approach to betting by the way he bet strategically, his attention to his daily turnover and percentage on turnover,[95] and the manner in which he had set-up his home workstation with five computer screen and two televisions.[96]
[93] T100.22–27, T182.28–30
[94] T106.6, T134.1–4, T182.31–183.3.
[95] See eg the text message exchanges at CB125, CB131, CB144, T181.28–182.2.
[96] CB121–122, T134.1–23.
97Despite Mr Ng’s invitation to do so, inferences cannot be drawn in the absence of evidence.[97] The principle stated by the High Court of Australia in Smith v The Queen,[98] which Mr Ng relies upon, is concerned with the admissibility of evidence and whether or not it satisfies the relevance threshold in s 55 of the Evidence Act 2008. In the present context, that principle has no application in this case.
[97] See Defence Closing [34].
[98] (2001) 206 CLR 650, 654–656 [9]–[12] (Gleeson CJ, Gaudron, Gummow and Hayne JJ).
98Rather, what I think Mr Ng is asking me to do is to take judicial notice[99] of the fact that a person who ‘has an obsession with gambling’ will at any given time necessarily be displaying indicators of distress that may be related to problem gambling which would be apparent to any objective observer and should have been subjectively apparent to Mr McLauchlan at the relevant time. Even if I found as a fact that on or before 18 April 2020 Mr Ng had ‘an obsession with gambling’, which in the absence of relevant evidence, including possibly expert evidence, I am not prepared to do, this is not a matter ‘that is within the knowledge of “every well-informed person in Australia”.’[100] Accordingly, I will not take judicial notice of this matter and, in the absence of proper evidence, I will not draw the inference Mr Ng invites me to draw.
[99] See Simpson v The Queen (1998) 194 CLR 228 (‘Simpson v Green’); Woods v Multi-Sport Holdings Pty Ltd (2002) 208CLR 460, 478–481 (McHugh J).
[100] Simpson v Green 234 [14] (Gaudron and McHugh JJ).
99Accordingly, I find during the period 15 to 18 April 2020 (both inclusive) Mr Ng was not displaying any indicators that may be related to problem gambling and there was no basis for Mr McLauchlan to not accept bets from him. There has been no breach of clause 8 of the Code as it applied at the relevant time.
100In summary, I find as follows:
Mr McLauchlan committed a technical and minor breach of clause 3 of the Code but his failure to comply with this rule had no effect on Mr Ng’s decision to place the bets the subject of this proceeding.
Mr McLauchlan also committed a technical and minor breach of clause 7 of the Code but his failure to communicate the required information to Mr Ng had no effect on Mr Ng’s decision to place the bets the subject of this proceeding.
Mr McLauchlan did not breach clause 8 of the Code.
101In my opinion, such technical and minor breaches of the Code could not result in the betting the subject of this proceeding being ‘unauthorised gambling’ under the Gambling Act. Mr Ng wholly fails to explain how, as a matter of law, a breach of the Code leads to the consequence that the betting in this case is unauthorised gambling. Neither the Act, nor the Racing Act, nor the Code itself, contain any provision to this effect and the criminal sanction contained in s 2.2.2(1) of the Gambling Act, for conducting unauthorised gambling, militates against accepting Mr Ng’s submission for the reasons discussed above.[101]
[101] Above [55]–[65].
102Mr Ng’s submission that: ‘The contraventions of Rule 7, further or alternatively Rule 3, further or alternatively Rule 8, render the agreements for bets or wages to be related to “unauthorised gambling” within the meaning of s 2.4.1 of the GRA and are therefore void’, is no more than an ipse dixit. No legally reasoned basis for this conclusion was advanced orally by Mr Ng during the proceedings nor in the written defence closing submissions. I reject the argument.
Did the provisions of the Code constitute contractual warranties which have been breached by Mr McLauchlan?
103In light of my conclusions regarding the alleged breaches of the Code, I can deal briefly with this question. I will assume, without deciding, that the contractual warranties defence is sufficiently pleaded.
104Mr Ng submits the provisions of the Code:
(a) constituted contractual warranties by the plaintiff (as bookmaker) and the defendant (as a customer);
(b) is analogous to the Banking Code of Conduct (sic.) which the courts have consistently found to have contractual force;[102]
(c) has been breached, and accordingly, the plaintiff’s claim has been ‘defeated’.
[102] He relies upon National Australia Bank v Rose [2016] VSCA 169 (‘Rose’); Doggett v Commonwealth Bank of Australia [2015] VSCA 351 (‘Doggett’); National Australia Bank v Rice [2015] VSC 10 (‘Rice’); Commonwealth Bank of Australia v Doggett [2014] VSC 423; Sam Management Services (Aust) Pty Ltd v Bank of Western Australia [2009] NSWCA 320; Brighton v ANZ Banking Group Ltd [2011] NSWCA 152.
105Mr Ng relies, inter alia, upon National Australia Bank v Rose (‘Rose’),[103] Doggett v Commonwealth Bank of Australia (‘Doggett’)[104] and other like cases. However, it was ultimately accepted in Rose and Doggett, for the purposes of those appeals and the proceedings at first instance, that the Banking Code of Practice (‘Banking Code’) was contractually binding as between the respective banks and customers and that its terms were to be treated as ‘contractual terms of each of the [g]uarantees’. In each case the guarantee’s expressly provided that ‘relevant provisions of the [Banking Code] apply to this guarantee’. Moreover, in Rose the ‘key questions’ on the appeal were whether the trial judge had made a factual error and whether the trial judge was correct to conclude the bank’s breach of the Banking Code caused the respondent to enter into the guarantees.
[103] [2016] VSCA 169 [40] (Warren CJ and McLeish JA).
[104] [2015] VSCA 351 [104] (McLeish).
106There are three main difficulties with Mr Ng’s defence raised under this question. First, there is no evidence the Code was expressly incorporated into the betting transactions by Mr McLauchlan, or otherwise, and no statutory or other provision so provides. However, the Banking Code was held to have been expressly incorporated into the guarantees.
107Secondly, the Code is expressed in terms of general intentions regarding the conduct of Mr McLauchlan’s bookmaking business and not as specific promises to Mr Ng as to the conduct of their contractual relations.
108Thirdly, and fatally for Mr Ng on this defence, given my earlier findings, Mr McLauchlan’s breaches of the Code had no causal effect on Mr Ng’s decisions to place individual bets and therefore caused him no loss.[105]
[105] See eg Rice [282]–[295] (Elliot J).
109Finally, for completeness, Rich J’s statement in Defina v Kenny,[106] quoted by Mr Ng in his Closing Submissions,[107] is not relevant to the present question. It would be relevant if I had found the bets were void under the Gambling Act because the waging in this case is unauthorised gambling.
[106] (1946) 72 CLR 164, 171.
[107] At [42].
Orders
110The plaintiff sought an order for the payment of debt of $150,000.00 by the defendant with interest pursuant to statute and costs.
111It follows from my reasons that the plaintiff is entitled to such orders.
Conclusion
112The plaintiff has established his claim and I will give the plaintiff judgment on the claim.
113I direct the parties to consider the orders that should be made as a result of these reasons, including as to interest and costs. If the proposed orders are not agreed, submissions as to the proposed orders should also be provided by each party. If a hearing is required on these matters, it will then be listed.
---
Certificate
I certify that these 28 pages are a true copy of the reasons for judgment of His Honour Judge Trapnell, delivered on 31 March 2023.
Dated:
Madeleine Stevens
Associate to His Honour Judge Trapnell
31/ 03 / 2023
114
22
0