Thanh & Anor v Nguyen Minh Hong

[1995] HCATrans 70

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A1 of 1995

B e t w e e n -

PHAM VAN THANH and LE THU NGUYET

Applicants

and

NGUYEN MINH HONG, KIEU TUAN KIET, VU DUC LAM, NGUYEN HUU BA and DINH THI CHUNG

Respondents

Application for special leave to appeal

BRENNAN J
DEANE J
DAWSON J

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON THURSDAY, 30 MARCH 1995, AT 11.14 AM

Copyright in the High Court of Australia

MR DI FAZIO:   If the Court pleases, I appear for the applicants.  (instructed by White Berman & Co)

MR B. FOX:   I appear for the respondents, if your Honours please.  (instructed by John McGinn)

BRENNAN J:   Mr Di Fazio.

MR DI FAZIO:   If the Court pleases, the point for the Court in this case is whether this money-lending scheme, known as Hui, albeit that it was characterised by the Full Court of the South Australian Supreme Court as a scheme which is designed to provide genuine loans whereby borrowers pay the equivalent of interest or a cost for the borrowing and in which the bidding process is designed to determine the cost of the loan or the equivalent of interest and the order in which members of the scheme borrow is nevertheless capable of being caught by the definition of lottery in section 4 of the South Australian Lottery and Gaming Act.

The scheme characterised in the way that I have just outlined was done by his Honour Justice Duggan at page 109 from line 30 onwards where his Honour said:

In any event it is difficult to accept that the purpose of the Act was to make such schemes unlawful.  Hui is designed to provide genuine loans to borrowers who pay the equivalent of interest (with the exception of the convener -

who receives moneys interest free.

The procedure at each meeting simply determines the consideration for the loan and the order in which the members are to borrow.

If the Court pleases, there is no challenge to that characterisation which is amply supported by the finding of the trial judge and by the evidence.

BRENNAN J:   How do you distinguish the case from Wallingford?

MR DI FAZIO:   On the basis, your Honours, that in Wallingford the legislation in question is described simply as the Lotteries Act.  The decision does not indicate the wording of the Lotteries Act applying in that situation, but that case - and indeed the subsequent case of Mutual Loan Agency v Attorney-General for New South Wales - was dealing with English lottery Acts which do not contain any statutory definition of “lottery” but rely, rather, on the common law definition of “lottery”.

Here, there is a definition of “lottery” in section 4 of the South Australian Act and the applicants’ submission, your Honour, is that the aleatory nature of any scheme is not to be determined by its intrinsic operation but it is to be determined simply by whether or not any particular scheme comes within the four corners of the definition.  It is the applicants’ case that subject to one thing, namely whether there was in this particular case an element of chance, subject to that that the Hui scheme does come within that definition.

BRENNAN J:   To come within the definition there has to be a disposal of money which depends upon an element of chance.  In this case, if a loan is taken at a particular meeting by one of the participants in the scheme, in due course that money must be repaid and there must be a payment by that member of whatever he is appropriately liable to pay under the terms of the scheme.  Everybody gets their money back in the end.

MR DI FAZIO:   That is so.

BRENNAN J:   And everybody pays whatever is the appropriate amount of fee for the loans that they receive.

MR DI FAZIO:   That is so, that cost depending on the amount that the person has bidded at the time that he or she receives the money.

BRENNAN J:   For my part, I find it difficult to describe that as a scheme for the disposal of money depending upon an element of chance.

MR DI FAZIO:   The existence or otherwise of an element of chance is an issue that was ventilated in all the proceedings at first instance and before the Full Court.  It is my submission, your Honours, that there must be, in this case, an element of chance because of the ever present possibility of two or more equal highest bids occurring at any meeting at which bidding occurs.  The applicants accept that the chance of winning the pot by putting in a bid which is the highest bid is, of course, a matter of chance, but it is not a matter of chance within the meaning of that word in section 4 of the Lottery and Gaming Act.  It is, one might say, a natural chance that is inherent in any human activity.

BRENNAN J:   But the only chance here is where you have got two bidders for the loan of that month or on that occasion which happen to turn out to be a bid of the same amount.

MR DI FAZIO:   That is right.  That is where, in my submission, the element of chance exists, even if the occurrence of two or more equal highest bids does not in fact occur at any bidding meeting.  Your Honours will know that it is conceded in this case that in the course of the operation of each one of the schemes which is the subject of this litigation, the occurrence of two or more equal highest bids never in fact occurred.  I am mindful of that and I accept that.  Nevertheless I say that the existence of the possibility of two or more equal highest bids is a matter of pure chance and, in that situation, the resolution of the deadlock, if you like, according to the way in which the scheme specifically provides for the resolution of that deadlock is also a matter of pure chance. 

That, in essence, if your Honours please, is the argument for the applicants in this case.  It is submitted that the principal point here is whether or not the decision in Wallingford’s Case is applicable to a situation where, as here, there is a specific statutory definition of “lottery” and not merely a reliance upon the common law definition of “lottery” in this State.  In essence, if your Honours please, that is the applicants’ case.

BRENNAN J:   Thank you, Mr Di Fazio.  We need not trouble you, Mr Fox.

An appeal in this case would not enjoy sufficient prospects of success to justify the grant of special leave.  Accordingly special leave is refused.

MR FOX:   I seek an order for costs.

BRENNAN J:   I presume you have nothing to say to that, Mr Di Fazio?

MR DI FAZIO:   If the Court please.

BRENNAN J:   Special leave is refused with costs.

AT 11.24 AM THE MATTER WAS CONCLUDED