State Lotteries Office (Now NSW Lotteries) v Burgin

[1993] HCATrans 211

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S75 of 1993

B e t w e e n -

STATE LOTTERIES OFFICE

(Now known as NSW Lotteries)

Applicant

and

DAVID WILLIAM BURGIN

Respondent

Application for special leave

to appeal

MASON CJ
GAUDRON J

McHUGH J

Lotteries 1 9/8/93

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 9 AUGUST 1993, AT 9.34 AM

Copyright in the High Court of Australia

MR K. MASON, OC, Solicitor-General for New South Wales: In

this matter, if the Court pleases, I appear with my

learned friends, MR A.W. STREET and

MR M. FITZSIMONS, for the applicant. (instructed

by H.K. Roberts, Crown Solicitor for the State of

New South Wales)

MR A.W.R. FENNELL:  May it please Your Honours, I appear for

the respondent to the application. (instructed by

Cutler Richardson & Burgin)

MASON CJ: Yes, Mr Solicitor.

MR MASON:  I have a short outline of our submissions and

four copies of the ticket - specimen copies only.

MASON CJ:  Does the outline tells us why special leave

should be granted in a case which appears purely to

be one of construction?

MR MASON:  Yes, Your Honour. I hope it is persuasive in

telling you that. It is a matter in which, we

submit, there is public importance for a number of

reasons. A very large number of claims have been

lodged since the decision was given by the Court of

Appeal. To date, $15 million worth of claims have

been lodged with respect to the same game and

another five in other identical games. Some of

these have already been the subject of proceedings

that have been commenced.

Since 45 per cent of the tickets would, on the

Court of Appeal's majority construction, be winning

tickets, the potential liability, if everybody

could find their ticket, would be in the billions.

There are identical games in other States - - -

MASON CJ:  Would be - you mentioned a figure.

MR MASON: Billions. There are identical games in other

States and Territories. We would submit, as a

matter relevant only, of course, to the special
leave aspect, the sense of injustice felt by the
vast majority of people who, taking what we would

loosely call "the Justice Meagher construction",

would have discarded what turned out, according to

the majority, to be winning tickets.

There is the generality of the principles

relating to the construction of these regulations

which are standard to New South Wales and

Queensland and would, of course, govern all games -

at least, all past games. I am not saying they are

beyond repeal.

GAUDRON J:	I am sorry, beyond repeal?	I did not -
Lotteries	2	9/8/93

MASON CJ: Not beyond repeal.

MR MASON:  I am not saying they are not beyond repeal but

their potential impact upon existing games is still

vast.

McHUGH J: But were these claims put in immediately or when

were they put in?

MR MASON: Since the judgment and, principally, since the

judgment on appeal. The evidence is that prior to

the Burgin claim being lodged there were only two

persons who asserted that "matching three" meant

three pairs.

McHUGH J:  Why can you not legislate in accordance with what

you say was the expectation and understanding of

people in the community?

MR MASON: That is a possible remedy. Legislation in New

South Wales is not for the asking, at the suit of

the government. That is one response I would make.

McHUGH J: Well, it should never be for the asking of the

government.

MR MASON:  I appreciate that. Your Honour, the context in

which I put it is that there is no guarantee that

legislation would be passed, given the present

state of the New South Wales Parliament, even

though supported by the government, on fiscally

responsible grounds.

McHUGH J: But, surely, the amount of money involved in the

case is not a ground for special leave.

MR MASON:  Well, the amount of money can be and if one is

dealing with a standard contract, which becomes

standard because there are a multiplicity of

claims, then it may be a factor.	I am not saying
it is the determinative factor.

MASON CJ:  I would have thought it is a long time since this

Court has acknowledged that an amount of money is

sufficient to ground a special leave application in

a contract case in the absence of the question of

construction giving rise to some matter of general

principle.

MR MASON:  That may be the situation where there is a single

claim and it may still be the case where there are

an aggregate of claims giving rise to a lot of

money but, in my submission, it is a factor.	I do
not put it any higher than that.	Where the impact

is to cause consolidated revenue to bear the

burden, it is an impact which affects the public

generally and not a single member of the public.

Lotteries 9/8/93

This, of course, all depends upon the Court being

satisfied there is an arguable case for error.	But
making that assumption, then it is, in my
submission, a factor that the Court should have
regard to in the exercise of its discretion.

There is a perception, in my submission, of

unfairness at the suit of those people who would

have discarded tickets at what we submit was a

surprising result of the majority of the Court of

Appeal. There would be, of course, a perceived

unfairness if there were legislation which removed the rights which legislation, on the assumption we

are asking the Court to make, would be unnecessary
because it would be to shore up an error of the

Court of Appeal.

MASON CJ: Just so that it does not go unnoted,

Mr Solicitor, I would not have thought that the

result was surprising. It may have been surprising

to people who had a particular view of this, having

regard to past history, but I must say for my part
the interpretation given to the words by the

majority in the Court of Appeal does not strike me

as surprising.

MR MASON:  Yes. The Court of Appeal divided, two of them

saying they were firmly of the view that the

ambiguity was to be resolved one way, and the

other, the other, and, of course, that is not

unknown. But we would submit that it is possible

to identify two errors of principle in the

reasoning process of the President which led to the

result and which can, therefore, justify the

description "surprising".

The ticket, which Your Honours have in front

of you, would represent, in our submission, a
single contract formed at the time of purchase of

the ticket and before anybody started to scratch

off the latex.	The middle game, referred to as
"Game Nol" speaks of matching three amounts and
winning.	Now, in that context, "match 3 amounts",

where it is "amount", the figure is revealed by

scratching off the box, must mean three of a kind.

Now, in our submission, the President erred when he failed to have any proper regard to the principle

of harmonious construction when he treated, in

effect, each of the three games and their attendant

instructions, as separate contracts.

Now, we submit that that is an error which

Mr Justice Meagher at pages 37 and 38 detected and

led him, clearly, to resolve what the President, at

least, conceded to be an ambiguity in the way he

did.

Lotteries 4 9/8/93

Secondly, we submit there are two errors in the application of the principle contra

proferentem. The President dealt with this at

page 20 of the application book and he referred to

a rule of general construction; not as such the

contra proferentem rule but a principle that says

that a party that has control over the terms and

adding:

conditions of a fixed contract, in effect, bears case,
the burden of ambiguity if it is to be applied

against it. At the very bottom of page 20,

at least where the contract is one in the form

of a public lottery -

His Honour referred to these principles in the

course of stating five sets of contractual relevant
principles of contract law and what His Honour did

not do and where he fell into error, in our

submission, was not treating contra proferentem as

a rule of last resort. He treated it as a matter

to be put into the mix and, as it were, stirred

around, that where there was an ambiguity, one had

regard to this.

We submit that if the contract yields to an alternative construction, particularly if we are

right on the harmonious approach, then it was wrong

and a matter of some importance to find that one

can treat contra proferentem as a general, as it

were, upfront canon of construction.

The second matter which His Honour did not

advert to, and this was not raised but neither was

there any, it appears, general discussion in

submissions about the principles of interpretation,

is the principle that contra proferentem does not

apply against the Crown. Can I give the Court a

recent English case which discusses some earlier

authorities on that, and the extracts from Halsbury

which are referred to there? There is a suggestion in the case, as there is	in Halsbury, that principle of construction of
grants ought not to apply to grants for valuable consideration, but the authority which I gave to
Your Honours involved a Crown grant for
consideration and a simple question of construction of that Crown grant.

Where the impact of an adverse construction is

not to affect the private rights of a party but,

particularly, as in a case such as this, where

there will be money taken from consolidated revenue

greatly in excess of what is achieved from

collecting the lottery contributions, then

Lotteries 9/8/93

His Honour was in error in not adverting to this

canon of construction, particular since he - - -

McHUGH J: But this is far removed from cases of grants, is

it not? This is a commercial operation.

MR MASON:  The English case and the discussion in Halsbury

states it as a principle of construction.

Certainly there is an issue that is raised as to

whether that should apply beyond grants but the

English authorities referred to in Halsbury and the

judgment of Justice Slade to which we have referred

you put it as a matter of more general application.

Your Honours, the errors in relation to the

regulation which appears at page 26 involve

regulation 12(l)(d) and 12(l)(e). In the ticket,

there is a provision in the bottom right-hand

corner, "Void if removed - NSW State Lotteries",
and the evidence was that if one scratched that off

one found a number which, by reference to a set of

instructions that were laid down at the time the

tickets were printed, indicated that this ticket

was not to be intended to be treated as a winning

ticket. We submit that that brought it within

12(l)(d) and (e) and that the President

misconstrued the regulation; his reasoning being at

32 and 33 of the application book.

As to paragraph (d), His Honour took what can

only be described as a literalistic formalistic

approach. He said that, in effect - lines 10 to

13 - that the amount was consistent with the number

simply because, in one case, there was a number and

in the other case there was an amount and there was

therefore no inconsistency, thereby robbing the

verification validation check of, indeed, any

purpose, in our submission.

As to paragraph (e) of the regulation, whether

the ticket failed:

any confidential or other security test

conducted by or on behalf of the Director -

the evidence was that, as I indicated previously,

there were, in fact, two tests that indicated that

this was not to be treated as a winning ticket.

His Honour construed paragraph (e) as being

confined, in effect, to fraudulent claims. That
was to put words into the regulation which they do

not bear and the opening words of the regulation,

"A ticket ..... is void and no prize is payable",

should be read, in our submission, distributively

and there is nothing in paragraph (e) that says

that it is confined to conditions relating to fraud

Lotteries 6 9/8/93

or conditions which destroy the entire ticket of

its validity.

Now, these are questions of construction

which, in our submission, are of significance to

this regulation, its impact upon a vast number of

tickets to date and questions where His Honour, in

our submission, was in error.

For those reasons, we submit that special

leave should be granted. Given the importance of the matter, obviously, the applicant would submit to a condition about paying the costs of the

appeal.

MASON CJ: Yes, thank you, Mr Solicitor. The Court need not

trouble you, Mr Fennell.

MR FENNELL:	Thank you, Your Honour.
MASON CJ:	In the view of the Court, the proposed appeal

raises no question of general principle and, on

that account, the application for special leave to

appeal should be refused.

MR MASON: If Your Honours please.

MASON CJ:	Mr Fennell, are you applying for costs?
MR FENNELL:	I am, yes, Your Honour.
MASON CJ:	The application is refused with costs.

AT 9.51 AM THE MATTER WAS ADJOURNED SINE DIE

Lotteries 9/8/93