Waddell, Greg v Intralot Australia Pty Ltd
[2010] VCC 9
•9 February 2010
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-09-02126
Plaintiff
GREG WADDELL
v
| INTRALOT AUSTRALIA PTY LTD | Defendant |
| (ACN 114 435 531) |
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| JUDGE: | HIS HONOUR JUDGE GINNANE |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 16 and 19 October 2009 |
| DATE OF JUDGMENT: | 9 February 2010 |
| CASE MAY BE CITED AS: | Waddell, Greg v Intralot Australia Pty Ltd |
| MEDIUM NEUTRAL CITATION: | [2010] VCC 0009 |
REASONS FOR JUDGMENT
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Catchwords: CONTRACT – Instant lottery – lottery licence – interpretation of playing rules – interpretation contra proferentum – playing rules providing conclusive prize determination data– whether rules complied with licence – whether rules authorised particular lottery– whether lottery rules incorporated into contract– Gambling Regulation Act 2003.
EVIDENCE – Certificate under section 55B of the Evidence Act 1958 – whether proves information created by third party and then inserted in computer.
FAIR TRADING – term in lottery rules providing for binding effect of prize determination – whether unfair term- inappropriate to decide argument – Fair Trading Act 1999 - ss 32V, 32W, 32X, 32Y .
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D G Robertson | Katherine Moorhouse-Perks |
| For the Defendant | Mr D M B Derham QC and | Jennifer Fox Legal Counsel |
| Mr D Clough | Intralot Australia Pty Ltd | |
| HIS HONOUR: |
Introduction
1 The plaintiff, Mr Greg Waddell, claim is that he holds a lottery ticket that has won $200,000 “top prize” in a lottery conducted by the defendant.
2 The defendant, Intralot Australia Pty Ltd (“Intralot”), is a company conducting public instant lotteries under a Category 2 Public Licence granted under the Gambling Regulation Act 2003 (“the Act”).
3 The defendant’s case is that there was only ever one ticket in the relevant game, which, when validated, would be entitled to the “top prize”. It was not the plaintiff’s ticket.
4 The proceeding raises the issue of the meaning of the Play Instructions printed on the ticket and whether a ticket validation process using prize determination data for the game contained on the defendant’s computer determines whether a ticket has won a prize regardless of the effect of the Play Instructions.
5 The sale of Instant Lottery tickets, scratch tickets, attracts large sums of the community’s money – 600,000 ticket each costing $5 were to be sold in the “Lucky Tix, Poker Night” game, which is at the centre of this proceeding.
6 It is surprising that the Play Instructions for a lottery in this regulated area, attracting large sums of the public’s money, should be expressed in a manner that has permitted the difference of opinion presented in this case.
7 The Rules of the Lottery, to which I refer in greater detail below, state that:
“the objective of an Instant Ticket is to scratch and reveal a combination of symbols that corresponds to a prize that is detailed in the specific Game instructions.”[1]
[1] Court Book (“CB”) 423, Rule 3
8 The instant lottery ticket was purchased on 2 May 2009 in Mill Park and was then given to the plaintiff. The defendant accepts that he is entitled to assert the legal rights of the purchaser of the ticket.
9 The plaintiff’s case is that on 5 May 2009, he scratched all four games on the lottery ticket, and applying the “Rules of the Game” to the game in the square in the top left-hand corner of the lottery ticket, was entitled by the terms of the lottery ticket to the “top prize” in the lottery; that is, the sum of $200,000.
10 It is appropriate now to set out in these Reasons for Judgment a copy of both the front and back of the plaintiff’s lottery ticket.
Regulation of Lotteries in Victoria
11 It is necessary to summarize the regime of public regulation of lotteries in Victoria relevant to this proceeding. The Act permits the granting of public lottery licences: s.5.3.2(1). A lottery licensee must make rules for, or with respect to, the conduct of each public lottery authorised by the public lottery licence granted to it: s.5.2.2(1). As soon as practicable after making lottery rules, a public lottery licensee must give a copy of them to the Victorian Commission for Gambling Regulation (“VCGR”): s.5.2.2(4).
12 The VCGR is established by the Act as a body corporate with objectives and functions relating to the control of gambling in Victoria: see ss.10.1, 10.1.3 and 10.1.4.
13 The lottery rules come into force on the day specified in them, which must be at least four weeks after the date on which they are made, or an earlier date approved by the VCGR, not being a day before the rules were made, or a date before the rules were notified in the Government Gazette and in a newspaper circulating generally in Victoria: s.5.2.3. The rules must be available for inspection by any person free of charge on request, and the licensee must at each place or point at which entries are accepted display a notice stating that the lottery rules are available for inspection: s.5.2.4.
14 The rules can be disallowed by the VCGR: s. 5.2.5(1) or by the Minister, if the Minister considers that they are not in the public interest or would result in the public lottery being of a different character from the public lottery authorised to be conducted by the licence: s.5.2.5 (3).
Intralot’s Lottery Licence
15 The defendant’s Public Lottery Licence is dated 24 October 2007. Clause 11 is entitled “Consumer Protection” and Clause 11.1, which is entitled “Mandatory content of Lottery Rules”, states:
“The Licensee must at least include and address each of the following
items in the Lottery Rules of each Authorised Lottery:
(1) a description of the general scheme or game for the Authorised
Lottery as set out in Annexure A;(2) how a Player participates in the Authorised Lottery; (3) how a Player may determine whether he or she has a winning
entry;(4) the method for claiming any prize; (5) the dispute resolution procedure and contact details of the Licensee to resolve any dispute in relation to a claim for a prize; and
(6) the fact that a Player may make a complaint to the Licensee and the Commission.”[2][2] CB 91
16 Annexure A to the Licence is headed “Authorised Lotteries” and contains a section entitled “Instant Authorised Lotteries”.[3] It provides a general description of some of the features of Authorised Lotteries, including:
[3] CB 108 I have omitted the text appearing under each of these paragraphs and subparagraphs in the Annexure.
“1 Name of the instant lottery: Instant Lottery Games. 2 Summary of key aspects of the lottery, including;
(i) the theme and images in the art work on the tickets/entries; (ii) the number of items/places on the ticket to be scratched or revealed and number of concealed items/places on the ticket/ entry; (iii) the prize structure; and (iv) the number of prizes that can be won on each ticket/entry. [4] CB 110
(v) the main materials from which the ticket/entry will be manufactured; and (vi) the method or mechanism for scratching or revealing concealed items/places on the ticket/entry.”[4]
17 The terms of Annexure A suggest that various features of instant lotteries are to be determined during the development stages of the game.
18 Clause 3 of the Licence is headed “Authorised Lotteries”. Clause 3.1 is headed “Conduct of Authorised Lotteries”, and states:
“(1) The Licensee is authorised to Conduct only the Authorised
Lotteries.
(2) The Licensee must Conduct each of the Authorised Lotteries on and from the Licence Commencement Date (or as agreed with the Minister and specified in this Licence) and throughout the Term.
(3) The Licensee must Conduct each of the Authorised Lotteries during
the Term in accordance with:
(a) the conditions of this Licence; (b) the specific conditions for each Authorised Lottery set out in Annexure A; and (c) the Lottery Rules applicable to each Authorised Lottery. (4) The conditions of this Licence in respect of the operation of each
Authorised Lottery include:
(a) the details specified in Annexure A in respect of that Authorised Lottery (Details); and (b) the Distribution Approaches, Distribution Restrictions and Maximum permitted frequency for the Determination of each Authorised Lottery as detailed in Annexure A in respect of that Authorised Lottery. (5) The Details in respect of an Authorised Lottery, are to be treated as Lottery Rules in respect of that Authorised Lottery, and any changes are subject to the process set out in section 5.2.5 of the Act, and must not come into effect until the same has been approved by the Commission.”[5]
[5] CB 83
19 The Rules relied on by the defendant are the Instant Lottery Game Rules (Lucky Tix).[6] The VCGR approved these Rules with effect from 1 July 2008 by a decision of 17 June 2008, as a result of the following process.
[6] CB 174,419
20 On 11 June 2008, the defendant wrote to the VCGR requesting that it amend the following:
“1 KENO 10/20/70 RULES (LUCKY KENO 70); 2 INSTANT LOTTERY GAME RULES (LUCKY TIX); 3 CROSS & MATCH RULES (LUCKY LINES); and 4 TV BINGO RULES (LUCKY BINGO STAR)”[7] [7] CB 346
21 Although the letter does not say so, the response to it, to which I next refer, indicates that the defendant included the Rules with its letter of 11 June 2008.
22 On 18 June 2008, the VCGR wrote in reply to the defendant, stating:
“RULES RELATING TO PULIC LOTTERIES IN VICTORIA
I refer to your correspondence dated 11 June 2008 regarding amendments to the rules relating to Public Lotteries in Victoria, made by Intralot Australia Pty Ltd in accordance with section 5.2.2 of the Gambling Regulation Act 2003 (the Act).
I wish to advise that the Victorian Commission for Gambling Regulation at
its meeting on 17 June 2008,
for the purposes of section 5.2.5(6) of the Gambling Regulation Act 2003, consented to these amendments and to the making of the Public Lottery Rules relating to Cross & Match, Keno 10/20/70, TV Bingo and Instant Lottery, and
for the purposes of section 5.2.3(1) of the Gambling Regulation Act 2003, approved the making of the rules for Cross & Match, Keno 10/20/70 and TV Bingo with an effective date of 18 June 2008 and for Instant Lottery with an effective date of 1 July 2008.
A copy of each set of Rules as consented to by the Commission is attached.
Cross & Approval Number: 7494 Keno 10/20/70 Approval Number 7495 Match
TV Bingo Approval Number 7496 Instant Lottery Approval Number 7497 In accordance with section 5.2.4 of the Act the lottery licensee must publish a notice of the making of lottery rules in the Government Gazette and in a newspaper circulating generally in Victoria. Could you please advise when this notice is published and provide the Commission with a copy of the notice.”[8]
[8] CB 418
23 The Rules attached included the “Lucky Tix” Rules.
24 The Lottery Rules required that the defendant provide a summary of the Lottery Game prior to its commencement. The summary had to include information about the game, such as its name, prize levels, total number of winners, the average chance of winning a prize and an image of the instant ticket: see Rules 4 and 5.2. Rule 4 requires that a summary of the game, including its name, will be provided to the VCGR prior to its commencement. It provides that each instant lottery ticket will feature a range of information, including the game name.[9]
[9] CB 352
25 On 25 June 2008, Intralot wrote to the VCGR providing it with the particulars of the instant tickets “in accordance with Rule or section 5.2 of Intralot Instant Lottery Game Rules” and enclosed specifications for eight instant tickets for their consideration.[10] The specification for Game IN 502 was:
[10] CB 517
26 The specifications indicate that Game number IN 502 was to be released in July 2008 when 600,000 instant lottery tickets would go on sale for $5 each, and presumably continue on sale until the last ticket was sold and $3,000,000 from ticket sales received. There were one “top” prize of $200,000 and 180,055 prize winners winning prizes totalling $1,766,400. At some point, the one “top prize” ticket would be sold. As Condition of Sale 9 recognizes, it might be the first ticket sold, or the last, or one sold at any point along the way. Regardless, the lottery would continue with tickets being sold stating “Win up to $200,000”.
27 On 27 June 2008, the VCGR acknowledged Intralot’s advice of 25 June 2008 of the proposed introduction of instant lottery games, including game number IN 502; Game Name Poker Night $5, estimated commencement 1 July 2008.[11]
[11] CB 534
28 The defendant published notice of the making of the Public Lottery Rules for the Instant Lottery Game (Lucky Tix) effective on and from 1 July 2008 in the Government Gazette and the Herald Sun newspaper.[12]
[12] CB 504-505
29 The defendant submits that the plaintiff’s lottery ticket is a form of instant lottery game described as “IN502” in the specifications provided to the VCGR. The specification of the instant tickets designated as “IN502” contains artwork on the face of the ticket, which includes the words “Lucky Tix” and “Poker Night”.
30 Mr A Cooper, the Applications Team Leader of the defendant, gave evidence and made a certificate under s.55B of the Evidence Act 1958, the effect of which was challenged by the plaintiff. In the certificate, Mr Cooper stated:
“1
I am the Applications Team Leader of Intralot Australia Pty Ltd (Intralot). In that capacity I supervise and oversee the operation of a computer system known as LOTOS and database known as Instant Game Management System (IGMS) (together the Computer) which stores information including winning ticket information and a record of every validation occurrence of instant lottery tickets issued by Intralot in Victoria and Tasmania ( the Activities).
2
LOTOS is the application which manages the operation of all Intralot’s public lotteries and IGMS is a database which contains information on instant tickets and consumables (such as rolls of thermal paper, game coupons and marketing materials that can be ordered through an Intralot terminal).
3
Attached to this certificate are two documents which were produced by the Computer. (“Attachment A” and “Attachment B”). These documents are audit trails of the validation occurrences of losing ticket number 031 in book number 0013050 of instant game number 502 ( the Ticket). That is the ticket a copy of which is reproduced in the Writ in this proceeding. By way of comparison, the attached document marked “Attachment C” is an audit trail of a winning Poker Night ticket. Attachments A, B and C are collectively referred to as the Documents.
4
The Documents were produced by the Computer during a period over which the Computer was used regularly to store or process information for the Activities (the Period).
5
Over the Period there was regularly supplied to the Computer in the ordinary course of the Activities information of the kind contained in the Documents.
6 During the Period the Computer was operating properly. 7
The information set out in the Documents is derived from information supplied to the computer in the ordinary course of the activities.
. . . 9
Each instant ticket issued by lntralot contains an encrypted validation reference number known as a ‘VRN’ which is located under a latex (scratch) panel on the ticket. When an instant ticket is validated by being scanned at an Intralot terminal, the ticket VRN is transmitted to the central computer system and a software module, known colloquially as a ‘black box application’, but which is a validation algorithm module (Algorithm Module) is used to transform the ticket VRN to a ‘DVRN’, being a Derived Validation Reference Number.
10
For security reasons, the identification of which tickets are winning tickets is not able to be determined by any member of Intralot’s staff. The Algorithm Module is designed to ensure that the ticket VRN under the latex panel of an instant ticket is converted by the Algorithm Module to a DVRN which is checked against the files in IGMS that record the DVRN of winning tickets. The ticket VRN and central system DVRN cannot be matched without the use of the Algorithm Module so that it is not possible to extract winning ticket information prior to validation by scanning the ticket. It is only possible to determine whether an instant ticket is a winning ticket once it is validated in this way. All tickets other than winning tickets will be read as non-winning tickets.
11
Winning ticket information and the central system DVRN are provided to Intralot by its supplier of instant lottery tickets, Scientific Games Products (Australia) Pty Ltd (Scientific Games), as computer files which are uploaded by lntralot to IGMS.
. . . 17 Accordingly, Attachment A indicates that the Ticket:
(a)
was first scanned (validated) a 12.39 pm on 6 May 2009 at retailer number 331008, …and
(b) has a prize determination of “tier_lvl” =0 (no prize) 18 Attachment B indicates that the Ticket: [13] CB 16-25
(a)
was later scanned (validated) at 4.32pm on 6 May 2009 at retailer number 677999 being Intralot’s head office located at 299 Williamstown Road, Port Melbourne, Victoria 3207; and
b) has a prize determination of “tier_ lvl =)” (no prize).”[13]
31 Mr A Baoustanos, a director of the defendant, also gave oral evidence. He stated that the lottery had approval, as had the lottery game “Lucky Tix”, and that Rules had been made in respect of those games and applied to every instant lottery game. The name “Lucky Tix” applied to every instant ticket. Scientific Games wrote the playing Rules and provided the winning tickets. Validation of tickets was a necessary security feature to ensure that a ticket was accurately identified as a winning ticket.
32 The plaintiff did not give evidence or call witnesses.
Interpretation of the Play Instructions
33 The first issue in the proceeding is the meaning of the Play Instructions. The parties were both of the view that no assistance was to be gained by the application of the rules of any form of the card game Poker.
34 The debate between the parties centred on Play Instructions 2 and 3, specifically the meaning of the Instruction to “combine cards from ‘Your Cards’ and the ‘Community Cards’’’ in the case of Instruction 2, and the meaning of the Instruction to “combine ‘Their Cards’ and the ‘Community Cards’” in the case of Instruction 3. [14]
[14] I have not repeated the use of capital letters found in the Play Instructions, save when directly quoting from them.
35 The presence in the Instructions of a holder of “Their Cards” creates an artificial second player. To win a prize under Play Instruction 4 it is necessary for “YOUR best 5 card poker hand [to] beat(s) THEIR best 5 card hand poker within a TABLE”. If both poker hands are of equal value then the holder of the “YOUR poker hand” would not win the prize shown for that “TABLE”.
36 The plaintiff contended that the Play Instructions required the combination of both the two “Your Cards”, or the two “Their Cards” as the case may be, and the best three of the “Community Cards”. The reference to “cards” was a reference to both the “Your” cards or “Their” cards. By the application of this method, the plaintiff achieved a hand of “Two Pair” having two 7s and two 3s, while the best hand that the holder of “Their Cards” could achieve was a “Pair”, being two 3s. A “Two Pair” beats a “Pair” and on this approach the plaintiff is entitled to the prize shown for that Table, i.e the “top prize” of $200,000.
37 The plaintiff argued that the reference to “cards” was a reference to entities, i.e. to the cards comprising “Your Cards” or “Their Cards”.
38 The defendant, on the other hand, contended that the Play Instructions required the selection of the best five cards from the seven cards created by the combination of:
(a) “Your Cards” or “Their Cards”, as the case may be; and (b) The Community Cards. 39 The defendant submitted that the plain meaning of the Play Instructions was that the players were to combine cards from “Your Cards” or “Their Cards” without qualification. The defendant emphasised that the words of the Play Instruction required the player to “combine cards from [YOUR/THEIR] CARDS” without qualification”. The defendant argued that the plaintiff’s interpretation would require the insertion of the words “the”, or “all”, or “both” between the words “combine” and “cards”. A reasonable person would read the phrase “combine cards” without qualification in the context of the whole sentence, as plainly referring to two sources of cards.
40 On the defendant’s interpretation of the Play Instructions, the plaintiff’s best hand remained a “Two Pair”, but the defendant’s best hand, using cards selected from the pool created by the combination of the two “Their Cards” and the five “Community Cards” was a “Straight”, being five consecutive cards, i.e. 2, 3, 4, 5, 6. Under the Play Instructions a “Straight” beats a “Two Pair”.
Principles applicable to the Interpretation of the Contract
41 Both parties submitted that their interpretation of the Play Instructions was consistent with principles governing the interpretation of contracts. The plaintiff invoked the need to protect the reasonable expectation of honest men.[15] He relied on the following principles stated in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd[16]:
“ It is not the subjective beliefs or understandings of the parties about their rights and liabilities and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the party to believe … The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”[17]
[15] Powercor Australia Ltd v Pacific Power [1999] VSC 110 [290], [295], [301]
[16] (2004) 219 CLR 165 [40]
[17] The plaintiff also referred to Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
42 The plaintiff relied on the contra proferentum rule of the interpretation of contracts and referred to Schenker & Co (Aust) Pty Ltd v Maplas Equipment and Services Pty Ltd,[18] where McGarvie J, in the Full Court of the Supreme Court of Victoria, stated:
“Clause 3 was contained in documents proffered to Maplas by Schenker and if its words are ambiguous and reasonably susceptible of more than one meaning, the construction should be adopted which is more favourable to Malpas: Maye v Colonial Mutual Life Association …. When the clause is construed as a clause in a commercial contract, for the reasons already given, I do not regard it as reasonably susceptible of more than one meaning …
In recent decades there have been many cases where clauses in commercial contracts have been given strained constructions in order to give them an operation which a court regarded as fair or socially desirable. Clauses such as exclusion, limitation and indemnity clauses have often been the subject of such constructions.
Strained constructions of that type are not open under Australian law in the construction of commercial contracts between business people. The law now to be applied in Australia was stated in the judgment of five judges of the High Court in Darlington Futures Ltd v Delco Australia Pty Ltd …After referring to a number of decided cases the court said:
‘These decisions clearly establish that the interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and where appropriate, construing the contract contra proferentum in case of ambiguity.’”
[18] [1990] VR 834, 845
43 The defendant argued that the contra proferentum principle was one of last resort and that the Court ought first apply rational principles of construction, and prefer a meaning that would avoid capricious, unreasonable, inconvenient or unjust consequences.[19] Cases in which the principle had been applied involved a profferor of a contract, who was asserting rights and “who [was] assumed to have been in the best position to set out clearly what those rights were to be”. The defendant argued that the Play Instructions were not terms allocating rights and obligations between the parties. Rather, the bargain between the defendant and a player was that when a player purchased a ticket, which had a pre-designated prize, the player was entitled to receive that prize. The Play Instructions, in combination with the latex cover that might be scratched to reveal pictures on the face of the ticket, were argued to be “merely a means by which a player may reveal the truth of the ticket in an exciting way, much like unwrapping a Christmas present”.
[19] Citing Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99,109
44 I do not accept all of this submission. It gives less significance to the Play Instructions than is warranted. As I conclude below the Play Instructions are part of the contract and this case has concentrated on the proper meaning of those Play Instructions. It was within the defendant’s capacity to frame the Play Instructions, subject to notifying the VCGR of them. A player who purchases an instant lottery ticket has no capacity to enter into negotiations about the terms of the contract, but would be entitled to expect, that the Play Instructions were clear and would be applied by the defendant.
45 I propose to interpret the Play Instructions by giving them their natural and ordinary meaning. The interpretation I propose to give the Play Instructions, in my opinion, is consistent with the reading of the Play Instructions that a reasonable person would adopt. I bear in mind that the Play Instructions are intended to be understood by a wide cross- section of the community. By applying the above approach I conclude below that the Play Instructions are not susceptible of more than one meaning. I do not consider that it is necessary, or appropriate, to apply the contra proferentum principle.
Meaning of the Play Instructions
46 The verb “combine” which is found in Play Instructions 2 and 3, means “to bring or join into a close union or whole; unite; associate; coalesce” [20] or to us a second dictionary definition: to “ unite, join together, associate ( persons) in a joint action, feeling etc”.[21]
[20] The Macquarie Dictionary (1st edition)
[21] The New Shorter Oxford English Dictionary (1993 edition)
47 I do not accept the plaintiff’s submission that the reference to cards in Instructions 2 and 3 means all, or both cards. The Play Instructions do not say that. The normal way of expressing that meaning would be to use the adjective “the” or a similar expression, to indicate that both cards were to be combined.
48 It is true that the defendant’s interpretation requires that the word “cards” in Play Instructions 2 and 3 be read as meaning “any cards”, so that one might end up with none of the cards from “Your Cards” or “Their Cards” being combined into “THEIR best 5 card poker hand”. The defendant’s interpretation permits the holder of “Your Cards” to rely on all the Community Cards. If those cards provide the best hand then the holder of “Their Cards” will always win the game because the effect of Play Instruction 4 is that the “YOUR” best 5 card poker hand must beat “THEIR” best 5 card poker hand. The defendant’s interpretation reads Play Instructions 2 and 3 as meaning “combine cards from the two sources, i.e. “Your” or “Their” cards and the “Community Cards” and having done that, create your best 5 card poker hand.
49 There is a third possible interpretation- one that would require the combination of some cards from either “Your Cards” or “Their Cards” on the one hand and cards from the “Community Cards” on the other hand. However in this case the application of the third interpretation produces the same result as the defendant’s interpretation, because the holder of “Your Cards” would still hold a straight or five consecutive cards. The difficulty with this third interpretation is that it requires reading the relevant words of the Play Instructions as requiring the combination of cards from both “Your” or “Their” Cards and from the Community Cards. I do not consider that the Play Instructions bear that meaning.
50 The issue is whether the Play Instructions require that the best 5 card poker hand be created by a combination of cards from two sources – from either “Your” or “Their” Cards on the one hand and from the “Community Cards” on the other or whether the cards are to be selected from the combination of the player’s 7 cards.
51 I consider that the defendant’s interpretation is correct. The Play Instructions do not require that the player’s combined hand contain cards from “Your Cards” and from the “Community Cards.” Still less can they be read as requiring that ‘all” or “both” of the “Your” or “Their” cards feature in the combined hand. Rather, the Play Instructions in my opinion mean that the Player is to select a combination of cards from the seven cards available i.e. from the two cards allocated to the player – i.e. the “Your” cards or “Their” Cards and the Community Cards.
52 My reasons for reaching the conclusion are first, the absence of words to indicate that the player’s combined hand must include cards from two sources i.e. both from “Your” or “Their” cards and from the “Community” Cards. Second, the absence of words indicating that either, or both of the “Your” or “Their” cards must be included in the player’s combined hand.
53 The plaintiff therefore cannot succeed in this proceeding.
The Defendant’s Additional Arguments
54 The defendant relied on a number of additional defences to prevent the plaintiff recovering the $200,000 prize, even if I had accepted his interpretation of the Play Instructions. In view of the conclusion I have reached, it is strictly unnecessary for me to decide these issues, but as they were fully argued, and lest I have erred in my interpretation of the Play Instructions, I will state my conclusions concerning them to the extent that is possible or appropriate.
55 In essence, these arguments were based on the proposition that the defendant’s prize determination data recorded on its computer files state that the plaintiff’s ticket did not win a prize and that the plaintiff is bound by that determination as a result of Rule 6.8. This contention in turn is based on a number of sub-propositions, most of which were challenged by the plaintiff, who also argued that if the Rules had such an effect they, or in particular Rule 6.8, were void because they breached provisions of the Fair Trading Act 1999. The effect of Rule 6.8
56 I will set out the terms of the Rules which may bear on the determination of a ticket holder’s eligibility to win a prize and then consider the arguments made about the effect of the Rules.
“2.1 The Rules of Instant Lottery will come into effect on 1 July 2008 and shall be used for all Instant Lottery Games. Further, Intralot Australia may amend these Rules in accordance with the Act. If the change invalidates an Instant Ticket that has already been issued, the holder may seek a full refund of the Total Cost of the Instant Ticket, but Intralot Australia shall not be liable for any other loss or damage suffered by the player as a result of such changes.[22]
[22] CB 423
. . .
6.7 The player’s eligibility to win a prize is subject to validation requirements of the Instant Ticket as set out in these Rules.
6.8 Where any dispute arises, the player shall be bound by the prize determination data recorded on Intralot Australia’s computer system files. No subsequent or manual alteration to an Instant Ticket shall be made or, if made, have any validity for any purpose.[23] . . . [23] CB 426
10.1 Before a prize is paid on any Instant Ticket, it must be validated according to Intralot Australia’s validation procedures. Intralot Australia’s decision as to whether or not the Instant Ticket is valid shall be final and binding. Without prejudice to the generality of the foregoing, Intralot Australia shall be entitled to declare an Instant Ticket or game invalid, and accordingly shall not be obliged to pay any prize, if:
…
(ii) The Instant Ticket does not appear on any list or computer
record held by Intralot Australia in respect of that Game.”[24]
[24] CB 430
Were the Rules in force?
57 The plaintiff argued that the Rules, or at least Rule 6.8, did not come into force. This submission requires consideration of the manner in which the Rules were made, which I have described above what force the Act gives them.
58 Section 5.2.2 of the Act states that:
“(1) A public lottery licensee must make rules, not inconsistent with this Act, the regulations or the licence conditions, for or with respect to the conduct of each public lottery authorised by the public lottery licence.”
59 The defendant served a Notice to Admit seeking an admission that the Lucky Tix Rules were at all material times approved by the VCGR pursuant to s.5.2.5(6) of the Act. As I understood it, the plaintiff made those admissions during the proceeding, but I will consider the effect of the evidence in any event.
60 One of the sets of Rules consented to on 27 June 2008 was for “Instant Lottery” which had the Approval Number 7497.[25] The only Instant Lottery Rules for which consent had been sought were “Instant Lottery Game Rules (Lucky Tix)”.[26]
[25] CB 418
[26] See the defendant’s letter of 11 June 2008 to the VCGR
61 The plaintiff challenged whether the Rules had been validly approved because s.5.2.5 (6) of the Act left open the possibility of their disallowance. That provision, which is part of a section dealing with the disallowance of lottery rules, states:
“If, before lottery rules are made, the Commission consents in writing to the making of the rules in the form in which they are made, the Commission must not disallow the rules or any part of them within the period of 6 months after they are made, unless the Minister requests disallowance under subsection (3).”
62 There was no evidence before the Court of a request by the Minister for disallowance of the Rules. In the absence of such evidence, and in view of the VCGR’s approval of the Rules on 17 June 2008, I consider that I should proceed on the basis that the Rules were in force on 2 May 2009.
The Effect of the Rules
63 The plaintiff advanced the following arguments to support the submission that the defendant could not rely on the Rules, because they did not comply with the Lottery Licence:
•
they did not state the name of the lottery game, as was required by clause 11.4 of the Licence, when read with Annexure A;[27]
•
second, the Rules did not provide, or demonstrate a sufficient connection with the “Lucky Tix Poker Night” Lottery Game so as to enable the conclusion that the Rules approved that Game. There was no association between the Game as described in the specification, which is set out above and the Rules;
•
third, the requirements of Annexure A were not met by the Rules because they did not contain the name of the game and the Rules did not provide a means of determining whether a ticket holder had a winning entry;
•
fourth, Rule 3 does not provide a description of the general scheme of the game for the authorised lottery as was required by Annexure A of the Licence.
[27] CB 91
64 A number of the requirements to which the plaintiff points find their source in the mandatory content of the Licence, required by Clause 11.
65 The plaintiff argued that the Rules, which bore the title “Instant Lottery Game Rules (Lucky Tix)”, applied to a number of “Lucky Tix” games. The name “Lucky Tix” was a generic name.
66 The ticket is a form of instant lottery game described as “IN502” in the specifications provided by Intralot to the VCGR. The specification of the instant tickets designated as “IN502” includes artwork on the face of the ticket which includes “Lucky Tix” and “Poker Night”.[28]
[28] CB 532-534
67 There was evidence, including from Mr Baoustanos, that there were no other rules applicable to the defendant’s Instant Lottery Games and that the Rules covered all the instant games.
68 The defendant submitted that the plaintiff’s lottery ticket was a ticket in a “game” within the definition of that term in the Rules:
“any instant lottery Instant Ticket run or promoted by Intralot Australia.”[29]
[29] CB 421 Rule 1
69 The defendant further submitted that the plaintiff’s lottery ticket was issued in a Lucky Tix game as evidenced by the caption for the ticket, which contained the phrase “$5 Lucky Tix”.
70 The defendant argued that the Rules contained the mandatory content required by Clause 11.1 of the Licence. There was a description of the general scheme or game in Rule 3; there was a description of how the Player participated in the Lottery in Rules 2.3, 6 and 10; the Rules provided how a player might determine whether he or she had a winning entry in Rule 6.8; provided for the method for claiming a prize in Rules 7 and 10; provided dispute resolution procedures in Rule 9 and provided a method for a Player to make a complaint to the Licensee and the VCGR in Rule 14.
71 In my opinion, the Rules do authorise the game in which the ticket was issued. The game is described on the ticket as “$5 Lucky Tix”, as well as being called “Poker Night”. A fair reading of these expressions aggregates those titles so that the game is described as a “Lucky Tix Poker Night” game. Viewed in that manner, the game is a Lucky Tix game. The terms of Rule 2.1 also support that conclusion.
72 Rule 3 does provide a general description of the game in the terms I have referred to above, but will repeat:
“The objective of an Instant Ticket is to scratch and reveal a combination of symbols that correspond to a prize that is detailed in the specific Game Instructions.”[30]
[30] CB 423
73 A number of the Rules, including Rules 7 and 9, do provide a means whereby a ticket holder can determine whether their ticket is a winning ticket.
Did the Rules form part of the Contract?
74 The plaintiff’s next argument was that the Rules did not form part of the contract for the sale of the lottery ticket.
75 The defendant submitted that the Rules expressly bound the plaintiff because of s.5.2.2 (5) of the Act, which states:
“Lottery rules for a public lottery, as in force when an entry to the public lottery is accepted, form part of the contract between the licensee and the player.”
76 Section 5.2.2 (5) of the Act removes the need to consider whether the purchase of a ticket gives rise to a contract between the ticket holder and the defendant.
77 The defendant submitted that the incorporation of the Rules into the terms of the ticket was reinforced by the conditions of sale, which appeared on the reverse of the ticket. They are set out above, but I will repeat the terms of Condition 1:
“1 Intralot Australia Pty Ltd (ACN 114 435 531) has issued this Instant Ticket subject to Intralot’s Instant Lottery Game Rules which are available at any Authorised Point of Sale or Intralot Australia’s registered office.”
78 This Condition reflects the requirements of Rules 2.2 and 2.3, which state:
“2.2 The Rules will be available for viewing at:
- Intralot Australia’s registered office;
- Authorised Points of Sale; and
- the Intralot Australia website.
2.3 Purchase of an Instant Ticket will bind contractually Intralot Australia and the player in accordance with these Rules. Further, the player acknowledges and agrees to be bound by these Rules and shall accept any final decisions made by Intralot Australia in resolving any claims pursuant to these Rules.”[31]
[31] CB 423
79 There was evidence, which I accept, that the game Rules were available at the point of sale as required by s.5.2.2(5) of the Act. Photographs were tendered to establish that availability.[32]
[32] CB 549-551
80 I accept that they the Rules did form part of the contract, by reason of the express terms of the ticket and as a result of s. 5.2.2(5) of the Act.
81 Second the defendant submitted that the Rules were incorporated into the contract. The purchaser of the ticket had the opportunity to ascertain the conditions of the ticket at the point of sale.
82 The relevant principles were considered in MacRobertson Miller Airline Services v Commissioner of State Taxation (WA) (the Ticket Case)[33] where Stephen J stated:
“The cases … are replete with references to passengers who elect not to read ticket conditions, no doubt the common behaviour of most passengers; they, it is said, do not thereby escape being bound by these conditions. This rule of law, which is directed to identifying the agreed terms of the particular contract, does not detract from but, rather, supports the proposition that acceptance, and the resultant formation of the contract, does not occur upon tender of the ticket. It occurs after that event, either when the passenger has by actual conduct intimated his acceptance of the offer, for instance by immediately boarding the vehicle in question, or, absent any such conduct, when a reasonable time has passed during which the passenger has had an opportunity of reading the conditions appearing on the ticket and has not then rejected the offer an demanded the return of his fare. In other words, acceptance will normally be by conduct and this conduct will consist either of an overt act consistent only with acceptance or, in its absence, of the passenger’s failure to reject the offer after he had an opportunity of learning of the conditions upon which the carriage is offered. ”[34]
[33] (1975) 133 CLR 125, at 137-9; 142-144
[34] (1975) 133 CLR 125 at 139
83 Applying these principles, the defendant’s argument was that the purchaser of the ticket had an opportunity to read the Rules referred to on the ticket and did not reject the ticket offered to him, or demand the return of the cost of the ticket.
84 The plaintiff submitted in response that the conditions of sale did not incorporate the Rules, because there was disconformity between the names of the game and the name contained in the Rules. No authority was cited to support the proposition that this would prevent the incorporation of the Rules in the circumstances described above. I have accepted that the Rules applied to the Lottery in which the plaintiff held a ticket.
85 Second, the plaintiff submitted that the Rules were repugnant to the ticket. By this I understood the plaintiff to mean that the operation of Rule 6.8 could not be permitted to prevent a different outcome than would follow from the proper application of the Play Instructions on the ticket.
86 For reasons that I give below I do not consider that the Rules have that result.
87 I consider that the legal principles described in the Ticket Case referred to above, incorporated those Rules into the contract between the plaintiff and the defendant.
88 The plaintiff argued that even if the Rules were incorporated into the contract between the ticket purchaser and the defendant, that did not have the result for which the defendant contended. It remained necessary to examine and consider all of the contractual documents, including the Play Instructions
89 The plaintiff, in this part of his argument, repeated the submission that the Rules did not comply with provisions of Lottery Licence, particularly clauses 11.1(1) and (3). The defendant disputed that contention and submitted that the Rules complied with clause 11 of the Licence, which prescribed mandatory content for Lottery Rules. I have dealt previously with these submissions of the plaintiff.
Effect of the Prize Determination Data
90 The next issue was the effect of the prize determination data. A key plank in the defendant’s case concerns the effect of Rule 6.8 is, namely that the prize determination data is determinative of whether the ticket holder is entitled to a prize, and, if so, which prize.
91 This submission by the defendant is built on the previous submission that the Rules are valid and applied to the ticket
Meaning of Rule 6.8
92 I consider that Rule 6.8 does not bind a player to prize determination data, which contains an outcome inconsistent with the application of the Play Instructions for the following reasons.
93 First is the context in which Rule 6.8 appears. It is one part of RuIe 6 which is entitled “Responsibility for Tickets”. A number of parts of that Rule are directed at placing on the player the responsibility for maintaining the ticket in the form it bore when sold. Rule 6.8 commences with the words “where any dispute arises”. I consider that the disputes envisaged by that phrase are disputes arising because of the manner in which the ticket has been maintained and not disputes caused by a clash between the outcome achieved by the application of the Play Instructions and the results recorded on the prize determination data.
94 Second, I consider that Rule 6.8 refers to prize determination data that reflects the correct interpretation of the Play Instructions. In this regard two relevant terms of the contract have to be kept in mind and given a harmonious interpretation. The first is that the parties to the contract are bound by the Play Instructions. The second is the terms of Rule 6.8. The interpretation of Rule 6.8 that I have adopted enables the two terms to be read together.
95 Where a conflict occurs between two terms of a contract effect is given to that part of the agreement:
“… which is calculated to carry into effect the real intention of the parties as gathered from the instrument as a whole, and that part which would defeat it must be rejected.”[35]
[35] GEC Marconi Systems Pty Ltd v BHP Information Technology Information Pty Ltd (2003) 128 FCR 1 at [306] quoting from Chitty on Contracts, para 12 -076; Leonie’s Travel Pty Ltd v International Air Transport Association [2009] FCA 280 at [55]-[57].
96 Generally, express terms, in this case the Play Instructions, prevail over any conflicting imported terms, which in this case can be regarded as the Rules.[36]
[36] Ford Motor Company of Australia Ltd v Arrow Crest Group Pty Ltd [2002] FCA 1156 [8]
97 It is possible for parties to a contract to bind themselves to a determination, for instance, of a valuer or other expert, or pursuant to a mortgagee or lender’s certificate and to be so bound even if the determination be erroneous.[37] But I do not consider the Rules have that effect in this case for the reasons that I have given.
Evidence of the prize determination data
[37] e.g. the cases referred to in O’Brien v O’Brien & Nicholls Pty Ltd [2001] VSC 411 [27]
98 The defendant argued that its computer system was approved by the VCGR pursuant to s.5.2.1A(1) of the Act and that the prize determination data recorded on the computer system files showed that the plaintiff’s lottery ticket did not win a prize.
99 As stated above, the defendant relied on a certificate of Mr A Cooper of 31 July 2009 made pursuant to s.55B of the Evidence Act 1958 to prove the prize determination data. The plaintiff disputed the effect of that certificate. I have set out previously the relevant terms of the certificate. The defendant contended that the certificate proved the fact that the information was produced to the computer. It was no defect that the information was obtained from another source, i.e. Scientific Games. Computers usually stored information that had been supplied to them. Paragraphs 17 and 18 of the Certificate state that the prize determination data showed that when the ticket was scanned the result was zero.
100 Section 55B of the Evidence Act states:
“(1)
In any legal proceeding where direct oral evidence of a fact would be admissible, any statement contained in a document produced by a computer and tending to establish that fact shall be admissible as evidence of that fact, if it is shown that the conditions mentioned in sub-s (2) are satisfied in relation to the statement and computer in question.
(2) The said conditions are –
(a)
that the document containing the statement was produced by the computer during a period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period, whether for profit or not, by any person;
(b)
that over that period there was regularly supplied to the computer in the ordinary course of those activities information of the kind contained in the statement or of the kind from which the information so contained is derived;
(c)
that throughout the material part of that period the computer was operating properly or, if not, that any respect in which it was not operating properly or was out of operation during that part of that period was not such as to affect the production of the document or the accuracy of its contents; and
(d)
that the information contained in the statement reproduces or is derived from information supplied to the computer in the ordinary course of those activities.”
101 The defendant relied on the statement of Smith J in Murphy v Lu[38] concerning Division 3A of the Evidence Act, in which s.55B is located, that:
“Thus, the definition of ‘document’ is plainly able to cover computerised
records stored within a computer system.”
and
“…s.55B plainly applies to computer-produced documents of all kinds
and not just those which constitute financial records.”[38] [1998] 3 VR 791, at 798-799, 802; cf DPP v Chao [2009] VSC 562
102 The plaintiff submitted that the prize determination data was mistaken and that the mistake was made by Scientific Games, who designed the Rules and, that as a result the determination data was not valid. The mistake involved the misinterpretation of the Playing Instructions. I have not accepted the plaintiff’s interpretation of the Play Instructions. However the plaintiff’s raised other arguments. He submitted that there was no satisfactory evidence regarding the prize determination data that came from Scientific Games and that the certificate under the Evidence Act had not proved that the prize determination data complied with, or came within the concept of prize determination data, within Rule 6.8. Mr Cooper could not give evidence about prize determination data that in fact had been developed and provided by another business, Scientific Games.
103 The defendant replied that the certificate set out the information that Intralot had put into the computer. It contains computerised records stored within a computer system. Section 55B clearly authorises the admissibility of statements produced by a computer, where, inter alia, the information contained in the statement reproduces, or is derived from, information supplied to the computer in the ordinary course of those activities, that is the activities for which the computer was used regularly to store or process information. The defendant’s computer was used regularly to store or process information supplied to the defendant by Scientific Games.
104 On the basis of Mr Cooper’s certificate, I am satisfied that the conditions in s.55B are established. I consider that s.55B(2)(a) is satisfied by paragraphs 1 and 4; subs.(2)(b) is satisfied by paragraph 5, subs.(2)(c) is satisfied by paragraph 6 and subs.(2)(d) is satisfied by paragraphs 5 and 7.
105 In my opinion, the certificate from Mr Cooper does prove the prize determination data. It states what the prize determination data contained in the computer demonstrates. It refers to the fact that material was provided to the computer.
Fair Trading Act
106 Finally, the plaintiff relied on provisions in Part 2B of the Fair Trading Act to argue that if the Rules made the results contained in the prize determination data binding on him, when they conflicted with the outcome produced from the proper application of the Play Instructions, they were void. The provisions of the Fair Trading Act relied on by the plaintiff were:
“32V This Part does not apply to contractual terms that are required or expressly permitted by law, but only to the extent required or permitted.
32W A term in a consumer contract is to be regarded as unfair, if contrary to the requirements of good faith and in all the circumstances, it causes a significant imbalance in the parties’ rights and obligations arising under the contract to the detriment of the consumer.
32X Without limiting section 32W, in determining whether a term of a consumer contract is unfair, a court or the Tribunal may take into account, among other matters, whether the term was individually negotiated, whether the term is a prescribed unfair term and whether the term has the effect or object of –
(a) permitting the supplier but not the consumer to avoid or limit performance of the contract; (b) permitting the supplier but not the consumer to terminate the contract; (c) penalising the consumer but not the supplier for a breach or termination of the contract; (d) permitting the supplier but not the consumer to vary the terms of the contract; (e) permitting the supplier but not the consumer to renew or not renew the contract; (f) permitting the supplier to determine the price without the right of the consumer to terminate the contract; (g) permitting the supplier unilaterally to vary the characteristics of the goods and services to be supplied under the contract; (h) permitting the supplier unilaterally to determine whether the contract had been breached or to interpret its meaning; (i) limiting the supplier’s vicarious liability for its agents;
(j)
permitting the supplier to assign the contract to the consumer’s detriment without the consumer’s consent;
(k) limiting the consumer’s rights to sue the supplier; (l)
limiting the evidence the consumer can lead in proceedings on the contract;
(m)
imposing the evidential burden on the consumer in proceedings on the contract.
32Y (1) An unfair term in a consumer contract is void.”
107 Sections 32V and 32W were amended by the Fair Trading and other Acts Amendment Act 2009 which commenced on 11 June 2009, one effect of which was to omit from s.32W the words “contrary to the requirements of good faith and”. However, the parties agreed that I should apply the legislation in its form prior to the amendment.
108 The plaintiff relied on the consideration of s.32X, by Cavanough J. in Jetstar Airways Pty Ltd v Free.[39]
[39] [2008] VSC 539 [114]-[115]
109 The first question is whether it is appropriate that I say anything about this argument. The Fair Trading Act argument was relied on by the plaintiff to counter the defendant’s argument about the meaning of Rule 6.8. I have decided that the plaintiff’s case fails on the interpretation of the Play Instructions and that I would not have accepted the defendant’s interpretation of Rule 6.8, if I had been called on to decide that issue. Part 2B of the Fair Trading Act is an important and far reaching enactment about which there are few authorities. Expressing views about its operation in circumstances, where, because of the approach I have taken, I am not required to, is of limited utility. Therefore I have decided not to express views about the Fair Trading Act arguments.
Conclusion
110 For the reasons stated above, the plaintiff has not established his entitlement to the lottery “top prize”. The proceeding is dismissed.
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