Benson v Rational Entertainment Enterprises Ltd

The source of the US$285,000

1. Mr Benson operated a website which advertised that for a small commission he could promptly provide payment (by direct deposit into a bank account or cheque) of funds in players' "Full Tilt Poker" or "FTP" accounts. He appears to have done so on many thousands of occasions. From time to time, he also played poker online, mostly for "play" money, but on a handful of times, for "real" money. His account was styled "OzGary".
2. There is some obscurity as to the parties which contracted with Mr Benson prior to the "freeze" and which operated the "Fulltiltpoker" website. One party appears to have been Filco Limited, which is described in the evidence as "an Alderney Limited Company".
3. The source of the US$285,000 was a company incorporated in the Isle of Man known as iBus Media Ltd. It was accepted that iBus Media operated two accounts with Full Tilt Poker, an "affiliate account" and a "player account", the latter being associated with the name "pokernews1". It was also accepted that the affiliate account had been credited with advertising or referral revenue, presumably connected with promoting Full Tilt Poker on other websites.
4. On the evening of 22 June 2011, Mr Benson received an automated message to the effect that a request had been received to transfer $285,000 from iBus Media's player account into his OzGary account and that processing of this transfer request might take 24-48 hours. Later that evening, he received an email from Mr Tony Bromham of iBus Media relevantly stating: "Tony G has instructed me to send $285,000 to you ('OzGary') from our company FTP player account 'pokernews1'. These funds need to be wired to our bank account as follows. I don't know what terms were agreed between you and Tony but please send the net funds to: ..." Bank details of an account in the Isle of Man were provided. The reference to "Tony G" was to Mr Antanas Guoga, a resident of the United Kingdom and seemingly a principal of iBus Media.
5. When the appeal was heard, it was common ground that an agreement was entered into between iBus Media on the one hand and Intercash Pty Ltd, the company controlled by Mr Benson, on the other hand (T32.28-50). It was agreed that the account balance would be transferred to Mr Benson's "OzGary" account, that Mr Benson would seek to withdraw money from the operators of the FTP site (which would take some time), and that in the meantime Intercash would transfer the proceeds, less a commission, into iBus Media's Isle of Man bank account. iBus was to receive US$250,800. The difference reflected a commission of no less than 12% (or US$34,200). The evidence did not illuminate why the commission was so large, days before all FTP accounts were "frozen", although it may have been linked with pending litigation brought by the United States government to confiscate the assets of, inter alia, the companies said to have been operating the Full Tilt Poker website (see below).
6. In any event, by a series of transactions in the next few days, the US$285,000 was "transferred" into iBus Media's player account. A further "transfer" was made to Mr Benson's player account. It was accepted that, by that means, Mr Benson, rather than iBus Media, became the unsecured creditor of one or more companies then associated with the Full Tilt Poker website.
7. The references to "accounts" and "transfers" in the description above, as well as in the parties' submissions and the contemporaneous documents, may easily distract from the legal reality of the situation. Mr Benson was an unsecured creditor. Indeed, his position was considerably more precarious than unsecured creditors who have, for example, deposited money into a bank account: his debtor was an offshore company which even in this litigation he was unable to identify with any certainty and which may not have been subject to significant prudential regulation. The contracts which Mr Benson, iBus Media and other players had entered permitted a "transfer" to be made between players, but that meant merely that the transferor, transferee and their creditor agreed as between themselves to reduce the indebtedness of the transferor and increase the indebtedness of the transferee.
8. In any event, Intercash did not provide the US$250,800 to iBus Media, nor did Mr Benson withdraw the US$285,000 from the account. That was attributable to the "freezing" of the account at the end of June.

The FTP accounts were frozen

1. In April 2011, a few weeks before the iBus Media transaction, the United States Government commenced proceedings in the District Court for the Southern District of New York seeking, among other things, forfeiture of all assets of companies associated with those operating the "Full Tilt Poker" website. The forfeiture was based upon claims of illegal gambling, bank and wire fraud and money laundering.
2. Slightly more than a year later, on 27 July 2012, the parties to those proceedings signed a "Stipulation and Order of Settlement regarding PokerStars", and on 31 July 2012, orders were made in terms of that document. Like the primary judge, I shall refer to it as the "USA Settlement Deed".
3. The document referred to an "Arrest Warrant In Rem" entered on 15 April 2011, an order restraining funds in a Luxembourg bank account on 1 September 2011, and a Restraining Order made in certain United States litigation applying to accounts in the names of "the PokerStars Companies" ceasing to apply.
4. It was also admitted on the pleadings in the present litigation that on 29 June 2011, the Alderney Gaming Control Commission issued a suspension notice to companies including Filco Limited requiring them to suspend operations, and cease accepting deposits and allowing withdrawals from customers. It does not matter, for present purposes, whether Mr Benson's inability to operate his account was a consequence of the various orders made in the United States proceedings, or the notice issued by the Alderney Gaming Control Commission, or both.
5. The USA Settlement Deed contained the following terms: "1. The PokerStars Companies agree to (a) settle the forfeiture and civil money laundering claims alleged in the Amended Complaint and (b) acquire from the United States certain assets forfeited by a separate Stipulation and Order to the United States by the Full Tilt Group (the 'Forfeited Full Tilt Assets', set forth in Exhibit B) to be conveyed to the PokerStars Companies or their designees for the aggregate sum of approximately $731 million, as set forth below. The transfer of the Forfeited Full Tilt Assets from the United States to the PokerStars Companies or their designees (the 'Asset Transfer') shall take place within six business days of the latter of the Court's entry of this Stipulation and Order and the forfeiture of the Full Tilt Assets (the date of the Asset Transfer, the 'Closing Date'), subject to the terms of Paragraph 2. 2. The PokerStars Companies shall forfeit some of $547 million (the 'Forfeited PokerStars Property'), to be transferred to the United States Marshals Service as follows [a timetable for payment over three years was then set out]. … 5. The PokerStars Companies, within ninety days of the Closing Date, shall make available for immediate cash withdrawal, without any limitation or restriction other than as required by any applicable law, the online poker account balances of all non-U.S. players of the Full Tilt Group, as of June 29, 2011, which are believed to total approximately $184 million … The PokerStars Companies shall not assume any liability of the Full Tilt Group other than those explicitly provided in this Paragraph. … 7. In the event that the PokerStars Companies fail to timely make any of the payments described in Paragraph 2 or fail to comply with paragraphs 5 or 6, this action may be reinstated against the PokerStars Companies … and all right, title, and interest in the Forfeited Full Tilt Assets shall be returned to the United States."
6. It is plain that the United States litigation was more complex than is disclosed by the evidence. It may be noted that the sum of $547 million and $184 million mentioned in cll 2 and 5 is $731 million, being the consideration for the settlement referred to in cl 1. However, it seems that the evidence does not permit any further breakdown of the $184 million in account balances of "all non-U.S. players of the Full Tilt Group" mentioned in cl 5.
7. It is also convenient to note that the parties were divided as to the construction of cl 5. Mr Benson contended that his "player" account was included within the scope of the liability of $184 million in cl 5 which the PokerStars companies had undertaken to make available for immediate cash withdrawal; he said he was a "non-U.S. player" and that was sufficient to engage the clause. The respondents submitted that Mr Benson was not a "player" because he had been using his account predominantly for a commercial purpose. They further submitted that the funds in that account, insofar as they reflected the $US285,000, were not the proceeds of gambling, but instead were "affiliated funds" and for that further reason fell outside the operation of cl 5.
8. Notwithstanding the circumstances in which the account was frozen, and in which the respondents came to acquire the Full Tilt Poker business, it was confirmed that no point was taken in this litigation about illegality or unlawfulness.
9. The first and third defendants at trial, who were also the first and third respondents to this appeal, were parties to the US proceedings and orders. The second and fourth defendants at trial and respondents to this appeal were not. The second respondent, which the evidence suggests is now known as Amaya Group Ltd, was incorporated in the Isle of Man under the name Rational Group Ltd on 2 November 2012. The fourth respondent, Rational FT Enterprises Ltd, was incorporated in the Isle of Man on 18 June 2012. An email in evidence from a Gaming Inspector with the Isle of Man Gambling Supervision Commission stated that "Rational FT Enterprises, trading as Full Tilt Poker, is licensed by the Isle of Man Gambling Commission. The OGRA licence was granted on 9th October 2012".

Mr Benson regains access to an FTP account

1. Mr Benson entered into an "End User License Agreement" ("EULA") in late 2012. Rational FT Enterprises Ltd is named in that agreement as a contracting party. It will be necessary in what follows to refer to the terms of the EULA into which Mr Benson entered. Another page of the website stated that "Credit card transactions are processed through Rational FT Enterprises Limited" and gave an address in the Isle of Man.
2. Mr Benson encountered some difficulties in re-establishing the operation of his account, and in evidence were emails between him and a representative of one of the PokerStars companies, in which Mr Benson advised: "Almost all funds in my OzGary account were acquired from player transfers in my role as a transfer affiliate with FTP. I am also a transfer affiliate with PokerStars under the name of InterCash and operate the website www.garybenson.com.au for this purpose. All players have been paid (or are about to be paid) for the transfers comprising the balance of my OzGary account."
3. Although it is understandable that Mr Benson would say that he was seeking to withdraw "money" or "funds" in "his account", in law that involved establishing that the entities now controlling the Full Tilt Poker website, with which he had entered into a new contract, were liable for the unsecured debt of his previous counterparty.
4. The communications concluded with an email dated 14 November 2012 in the following terms: "In the last two weeks we have carried out an investigation on your FullTiltPoker account (known as OzGary). The cause for this investigation was the need to identify the source of funds on your OzGary account. During the course of our investigation and after reviewing all 2011 transactions, we have identified a transaction in the value of $285,000 from account PokerNews1 to your OzGary account, dated Jun 22 2011. As you may be aware, as part of a settlement reached with the US Department of Justice Southern District New York, The Rational Group obtained certain assets of Full Tilt Poker. Under this settlement agreement the Rational Group did not assume any liabilities of the previous Full Tilt Poker companies and therefore previous contractual agreements that Full Tilt Poker may have had with affiliates were excluded. As such, The Rational Group is not liable and will not pay for any affiliate earnings. Due to the fact that the transferred funds from account PokerNews1 to your OzGary account were clearly identified as affiliate earning, we have deducted these funds from you OzGary account, and we can now confirm that your account is in good standing. I would like to thank you for your patience and understanding during this process."
5. Parts of that email are not correct. In particular, it is incorrect to say that "the Rational Group did not assume any liabilities of the previous Full Tilt Poker companies". To the contrary, as part of the consideration recorded in the USA Settlement Agreement, companies within the Rational Group promised to make available for immediate withdrawal the account balances of all non-U.S. players.
6. Irrespective of that error, the respondents emphasised that before a contract was entered into between one or more of them and Mr Benson, it was quite clear that the US$285,000 would not be paid to him.
7. The primary judge found that at around 10:10pm on 15 November 2012, Mr Benson logged in, provided identity verification documents and was informed by telephone that verification of his account was complete, at which time he was able to operate his account, the balance of which had been reduced by US$285,000.

The District Court proceedings

1. From shortly after the freeze, until shortly after Mr Benson entered into a contract with the new operators of www.fulltiltpoker.com, there was litigation in Australia between Mr Benson and iBus Media.
2. On 23 September 2011, iBus Media commenced proceedings in the District Court of New South Wales against Mr Benson, claiming US$254,300 plus interests and costs (and acknowledging the 12% commission of $US34,200). There was also another relatively minor claim in that proceeding (for US$3,500) which is not presently relevant.
3. Those proceedings, and separate proceedings brought by Mr Guoga in the District Court, were compromised in February 2013 by deed to which iBus Media, Mr Guoga, Intercash and Mr Benson were parties. The settlement involving the payment of US$120,000, the filing of a notice of discontinuance and the granting of releases. It will be necessary in due course to refer to the terms of the settlement deed.

Mr Benson's case and the reasoning of the primary judge

1. Mr Benson commenced proceedings against the respondents in 2014. Originally, he advanced cases based on the US$285,000 being held on trust or subject to an equitable charge in his favour. That may explain why they were filed in the Equity Division of the Supreme Court.
2. The respondents, all of which are located in the Isle of Man, moved to set aside the service of the statement of claim. This application was heard and determined by Robb J: Benson v Rational Entertainment Enterprises Ltd [2015] NSWSC 906. Robb J recorded at [12] that Mr Benson "accepted that his trust claim was misconceived", and further at [13] that it "did not fall within any paragraph contained in Schedule 6 of the UCPR so that he could not, in any event, maintain the trust claim in this Court on the basis of a statement of claim that was served on the defendants outside Australia". As noted in Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [44]-[47], the procedure at common law for service out of the jurisdiction diverged from that in equity, with the former being reflected in 1972 in Part 10 of the Supreme Court Rules. The current provisions in Part 11 and Schedule 6 of the UCPR resemble the former Part 10 in permitting service out of the jurisdiction without leave, and applying to a wider class of proceedings at law than in equity.
3. Robb J dismissed the defendants' application, finding that the common law claims fell within the classes of proceedings which could be the subject of service out of the jurisdiction: at [120]-[125], and further finding that New South Wales was not a clearly inappropriate forum: at [126]-[133]. The latter finding included consideration of exclusive jurisdiction clauses specifying the Channel Island of Alderney in the case of Mr Benson's original contract, and the Isle of Man in the case of the 2012 EULA. No point was made of either of those clauses in this Court.
4. The allegations based on trust and equitable charge were abandoned in an amended statement of claim filed in August 2015. That was the version of the pleading which went to trial.
5. In his amended statement of claim, Mr Benson advanced two cases in the alternative, reflecting the two bases on which Robb J had found in his favour as to service out of the jurisdiction. First, he said that in November 2012, the respondents and he entered into a new contract, on substantially the same terms as those between the companies which had formerly operated the FTP website, such that the respondents were obliged to pay him the entirety of the balance in the OzGary account, including the US$285,000.
6. Alternatively, Mr Benson relied on the USA Settlement Deed. Paragraphs 35 and 36 of the amended statement of claim alleged that: "by retaining, and failing to account to Benson, the sum of US$285,000.00 that Benson has demanded for immediate withdrawal, and which the Rational Group of Companies are obliged to make available under the terms of the OzGary Contract and the USA Settlement Deed", those companies had obtained the benefit of the sum of US$285,000 at Benson's expense, in circumstances where it was unconscionable of them to do so, as a result of which they had been unjustly enriched.
7. Two matters should be noted of the pleaded case. First, in light of the uncertainty as to the contracting parties, the pleading referred consistently to "the Rational Group of Companies or any one of them". Secondly, notwithstanding the reference to the circumstances being "unconscionable", Mr Benson's claim was now confined to one at law. Save for one point, there were no claims for any equitable relief, and paragraph 37 alleged that: "[T]he sum of USD$285,000 amounts to moneys had and received by the Rational Group of Companies, or any one or more of them, to the use of Benson, such that there should be an order that the sum of USD$285,000 be repaid to Benson, together with any interest accruing thereon." The qualification was that the amended statement of claim included a prayer for a declaration that one or more of the respondents had been unjustly enriched. As presently advised, I cannot envisage circumstances when it would be appropriate for such a declaration, as opposed to a judgment, to issue.
8. Having summarised the factual background, the evidence, an amendment application, the parties' submissions, and some statements of principle which both parties regarded as uncontroversial, the primary judge's dispositive reasons were at [282]-[301]. They were introduced by the statement at [282] that: "I have closely read all of the submissions made in writing and the transcript of oral submissions and have come to the view that the submissions of the Defendants are far more compelling than those of the Plaintiff."
9. There followed some nine reasons why his Honour was satisfied that the plaintiff's case could not succeed. They were that: 1. there had been no pleading of Mr Benson acting as trustee; 2. Mr Benson's case was inconsistent with what had been pleaded in the District Court; 3. there was no evidence that any of the defendants had received the US$285,000; 4. the amount of $285,000 transferred from iBus Media to the OzGary account "was accepted as being 'affiliate earnings'", which according to the emails exchanged prior to 15 November 2012 were known to Mr Benson to be amounts which would not be paid by the respondents; 5. in 2014 when the Supreme Court litigation was commenced, Mr Benson was under no obligation to pay the US$285,000 to any third party; 6. it was not Mr Benson but Intercash which had made the US$120,000 payments to iBus; 7. Mr Benson gave no evidence of the claim of Mr Guoga, so as to establish what part of the District Court settlement sum related to the claim of iBus, as opposed to the claim of Mr Guoga; 8. Mr Benson had failed to establish he had suffered any loss or damage, given his own case that the whole of the amount he hoped to receive from the former operators of the FTP website would have been transferred to Intercash, and the 12% commission would have been income in Intercash's hands; and 9. finally, in relation to the claim for unjust enrichment, the entirety of the reasons of the primary judge was at [300]: "[I]n my view, the Plaintiff has not established the receipt by the Defendants, or any of them, of a benefit at the Plaintiff's expense. He was simply not entitled, under any arrangement made with iBus, to retain any of the USD$285,000. In those circumstances, he could not establish that it would be unjust to allow the Defendants to retain any benefit."
10. The notice of appeal contained no fewer than 18 grounds of appeal challenging most of those points in order. The respondents' written submissions understandably followed the same approach. That approach has the disadvantage that even if all of the points relied on by the primary judge are erroneous, or irrelevant, it remains necessary to determine whether either or both of Mr Benson's causes of action are made out.
11. In oral submissions, Mr Zahra, who appeared in this Court and below for the respondents, adopted a less piecemeal approach. He first sought to defend the finding that there was no loss or damage, before turning to the claims in contract and unjust enrichment. It is convenient to adopt the same approach in these reasons.

Loss or damage

1. The respondents' first point was that Mr Benson had not shown that he had suffered loss or damage. This turned upon the detail of the transaction involving iBus Media and the settlement of the proceedings in the District Court of New South Wales.
2. The respondents submitted that Mr Benson's case was that he would remit all of the funds withdrawn from his "OzGary" account to Intercash, and that Intercash would receive the commission. It followed, so it was said, that Mr Benson "would receive nothing had the alleged contract been performed and that is of course the appropriate measure of damages for a claim for breach of contract".
3. I cannot accept this submission, for two reasons. The first is that the submission is incomplete, because it assumes, wrongly, that Mr Benson had no liability to Intercash. The second is that Mr Benson sued in debt, not for damages.

The District Court settlement did not release Mr Benson from Intercash

1. The respondents rapidly conceded following questions from the Bench that Mr Benson would still suffer loss if he could be sued by Intercash, and thus a further element of the submission was that the releases given in 2013 were effective to release Mr Benson from a claim by Intercash.
2. The respondents did not rely on any notice of contention. Rather, they said that "impliedly" at [289] the primary judge had found that the settlement deed extinguished Mr Benson's liability to pay $285,000 to Intercash. That paragraph was in the following form: "Fifthly, by the time the Plaintiff commenced these proceedings, in November 2014, he had no obligation to pay an amount of $USD285,000, or any other amount, to any third party (Intercash P/L or iBus). The District Court proceedings, in which he had been named as the only Defendant, had been concluded, with payments due to iBus having been made by Intercash P/L, and a Notice of Discontinuance filed in those proceedings in May 2013. Releases had also been granted as previously identified."
3. I think the respondents are correct to say that that paragraph includes a finding that the settlement of the District Court proceedings included a release by Intercash of any obligation owed by Mr Benson to it, although it is a little odd to describe Intercash, of which he was sole director and majority share holder, as a "third party". However, either the first sentence of that paragraph refers to "Intercash P/L" in error, or else it is a finding that Mr Benson had no liability to, inter alia, Intercash. The latter is the preferable view.
4. However, even if there be a finding that Intercash released Mr Benson, the finding is unsupported by any reasoning, either at that point of the judgment or anywhere else. Much earlier, at [129]-[135] the primary judge had reproduced the evidence relating to the settlement and release, but it was not contended that there was any legal analysis either there or elsewhere.
5. Contrary to the respondents' submissions, but in accordance with grounds 10 and 11 of the appeal, the deed of settlement does not on its proper construction have the effect of releasing Mr Benson from a claim by Intercash.
6. It has long been established that the general words in a deed of release are confined by recitals. In Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 at 123; [1954] HCA 23 the joint judgment said: "The principle relied upon is that adopted by the common law long ago for the restriction of wide general words in a release of obligations, viz that the general words of a release should be restrained by the particular occasion: Knight v Cole. Thus the general words of a release are to be restrained by the particular recital: Payler v Homersham. As it is concisely expressed by Best J in Lampon v Corke: 'If there be introductory matter, that will qualify the general words of the release.'"
7. Their Honours also relied on Lord Westbury's statement in London & South Western Railway Co v Blackmore (1870) LR 4 HL 610 at 623: "The general words in a release are limited always to that thing or those things which were specially in the contemplation of the parties at the time when the release was given."
8. Those principles have been applied on numerous subsequent occasions, including by this Court in Rinehart v Welker (2012) 95 NSWLR 221; [2012] NSWCA 95 at [138] and Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12 at [174].
9. The operative clause in the settlement deed is cl 3.2, which provided that: "The Parties hereby release and discharge each other for themselves, their subsidiaries and related corporations from or in respect of all Claims."
10. The deed referred to the "iBus parties" (meaning iBus Media and Mr Guoga) and "the Benson parties" (meaning Mr Benson and Intercash). The term "Parties" was not in terms defined, but plainly connoted both the iBus parties and the Benson parties. The deed refers to the litigation between iBus Media and Mr Guoga on the one hand, and Mr Benson and his company Intercash on the other. The term "Claims" in cl 3.2 was defined broadly and in familiar terms in cl 3.1 to mean "all manner of claims, suits, causes of action, demands, etc arising out of or in connection with any matter the subject of the court proceedings, or any other matter referred to in the recitals."
11. The recitals did not take the matter any further, although they referred to separate District Court proceedings brought by Mr Guoga in relation to a separate transaction involving US$73,000 on 22 June 2011.
12. There was no suggestion of any conflict between Mr Benson and Intercash. The proceedings in the District Court did not involve any dispute between Mr Benson and Intercash. Indeed, Intercash was not a party to the litigation. Mr Benson and Intercash shared the same solicitor. Mr Benson executed the deed personally, and as sole director and secretary of Intercash.
13. Clause 3.2 is to be read, in accordance with well settled authority, in context and by reference to the proceedings which were compromised and the remainder of the deed. It was effective to release Mr Benson and Intercash from any liability to the iBus parties. However, it was not effective to release Mr Benson from any obligation to transfer the US$285,000 to Intercash.

Any release would not be an answer to Mr Benson's claim in debt

1. Secondly, the respondents' submission carries with it the proposition that the respondents enjoy a defence by reason of a release between an account holder and a third party. No authority was supplied for that proposition. In oral submissions, it was confirmed that it was not said that the respondents could themselves rely on the release, but rather that the release had the effect that Mr Benson suffered no loss.
2. But this is not to the point. Mr Benson emphasised that he had a liquidated claim for the payment of a debt. He submitted that it was "an improper exercise to attempt to assess the quantum of the appellant's damages (which are liquidated at the amount of the debt) on the basis of what the appellant may or may not have done with the money had the debt been paid to him". In response, the respondents pointed to Mr Benson's evidence that he would not retain any of the US$285,000 and other matters already referred to above.
3. Mr Benson was suing in debt for the balance of his account. As Dixon and Evatt JJ said in Russell v Scott (1936) 55 CLR 440 at 450-451; [1936] HCA 34, the chose in action between customer and banker consisted in "the contractual right against the bank, ie in a debt, but a debt fluctuating in amount as moneys might be deposited and withdrawn". The position was no different between Mr Benson and his counterparty.
4. Slightly altering the facts of Russell v Scott, suppose a nephew is told that a wealthy aunt proposes to deposit funds into the nephew's bank account, and the nephew binds himself to withdraw those funds to pay someone else. Suppose further that the third person releases the nephew from his obligation. That gives no defence to the bank, which remains bound to pay the nephew the outstanding balance, whatever it be, whether before or after the aunt makes the deposit into the account.
5. Mr Benson did not have to establish damage. His claim was in debt for the balance of the account from time to time.
6. Neither the nephew in that example, nor Mr Benson in the facts of this case, had to establish damage. The loan of money (whether between bank and nephew, or between the Full Tilt Poker company and Mr Benson) created an immediate debt, represented by the balance of the account from time to time. As was said in Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 567; [1956] HCA 51: "The common law does not and never did conceive of indebtedness in a sum certain for an executed consideration as a mere breach of contract: it is rather the detention of a sum of money and that was so whether the creditor enforced his demand by an action of debt or by indebitatus assumpsit."
7. As it is put in Chitty on Contracts (Sweet & Maxwell, 32nd ed, 2015), Vol 1 at 26-008, "There is an important distinction between a claim for payment of a debt and a claim for damages for breach of contract … The relevance of this distinction is that rules on damages do not apply to a claim for a debt, eg … there is no need for [the claimant] to prove any actual loss suffered by him as a result of the defendant's failure to pay."
8. The basic distinction between a claim for compensation or damages, and a claim for debt was also discussed in J Edelman, "An English Misturning with Equitable Compensation" in S Degeling and J Varuhas (eds), Equitable Compensation and Disgorgement of Profit (Hart Publishing, 2017) 91 at 95.
9. It follows that grounds 10 and 11 of the appeal are made out. The primary judge erred in accepting the submissions that Mr Benson had suffered no loss and that that was an answer to his claim.

Mr Benson's claim in contract

1. The respondents then turned to the contract claim. Ground 17 had complained that the primary judge had failed to determine whether Mr Benson had entered into a contract with any or all of the respondents. In oral submissions, the respondents accepted that on the face of the EULA, there had been a contract between Mr Benson and the fourth respondent. That concession was properly made. It is not necessary to say anything more in relation to ground 17.
2. The EULA was a document of some 9 pages which could be scrolled through in a window that was presented on Mr Benson's computer when software was being installed, and he was asked to click on a circle against which was written "I accept the terms of the license agreement". It is not clear whether Mr Benson was obliged to scroll through the document before being permitted to click to signify his acceptance, but it was common ground that the document had contractual force.
3. The second sentence of the first paragraph of the document was: "Please note that the Agreement constitutes a legally binding agreement between you and Rational FT Enterprises Limited (referred to herein as 'Full Tilt Poker', 'us' or 'we') which owns and operates the Internet site found at www.fulltiltpoker.com (the 'Site')."
4. Although the EULA did deal with the necessary licence to install the suite of software onto Mr Benson's computer, contrary to the thrust of some of the respondents' submissions, it did much more than that. Evidently the software facilitated gambling with real money, and in addition to users acknowledging that there was "a risk of losing money when using the Service", the agreement made detailed provision for users' accounts. Clause 5.2 provided inter alia that: "The User is only allowed to wager for his/her personal entertainment. Under no circumstances shall a User be permitted to use his/her 'real money account' with Full Tilt Poker for any purpose other than for using the Service."
5. Provision was made for "player to player" transfers (in cll 5.3 and 5.4), and users were advised that in order to comply with anti money laundering legislation they might be required to provide personal documentation in order to permit transfers to be processed. Clause 5.10 dealt with "real money transaction processing and currency exchange". Clause 10.5 provided "Please note that monies held in your Full Tilt Poker account do not accrue interest". Clause 10.10 provided: "You acknowledge and agree that monies deposited by you in your Full Tilt Poker account are held in a trust account on your behalf."
6. It is quite plain that the EULA was not merely confined to a software licence. It made detailed provision for the deposit, transfer and withdrawal of money.
7. Clause 5.11 went further, in that it dealt expressly with accounts maintained by the former operators of the Full Tilt Poker site. It provided: "5.11 Persons located in or residents of the United States, the United States Territories, France and applicable territories, Italy, Estonia, Belgium, Denmark and Spain (the 'Prohibited Jurisdictions') are not permitted to make deposits into their accounts or engage in real-money play. They may cash out their existing account balances. For the avoidance of doubt, the foregoing restriction on engaging in real money play applies equally to residents and citizens of other nations while located in a Prohibited Jurisdiction. Any attempt to circumvent the restrictions on play by any persons located in a Prohibited Jurisdiction, is a breach of this Agreement. An attempt at circumvention includes, but is not limited to, manipulating the information used by Full Tilt Poker to identify your location and providing Full Tilt Poker with false or misleading information regarding your location."
8. The express premise of cl 5.11 is that Rational FT Enterprises Ltd authorised persons located in or residents of "the United States, France, Italy, Estonia, Belgium, Denmark and Spain to cash out their existing account balances". The respondents came close to accepting in oral argument that that promise should be construed as meaning that Rational FT Enterprises Ltd assumed the liability to pay former Full Tilt Poker balances in accounts between those persons and the companies which had formerly operated those websites. In my view that is the legal effect of the agreement.
9. Clause 5.11 identified the prohibited jurisdictions. It expressly conferred a right upon players in those jurisdictions to "cash out their existing account balances". That can only be read as a reference to the balances of accounts with the companies which formerly operated the Full Tilt Poker website and business. It follows that Rational FT Enterprises Ltd was assuming the liability of at least those players.
10. Further, the clause contains a restriction on what persons in Prohibited Jurisdictions may do, compared with persons in non-Prohibited Jurisdictions. In a context in which the first clause restricts what persons in Prohibited Jurisdictions may do, the second sentence ("They may cash out their existing account balances") is apt to be read as a preservation of the rights of persons in Prohibited Jurisdictions. That is, the second sentence does not create special rights in favour of persons from Prohibited Jurisdictions; rather, it makes clear that the restrictions on their playing online poker do not affect their rights, already existing, and identically with other users, to cash out their account balances.
11. Clause 5.11 restricts the rights of persons from Prohibited Jurisdictions to engage in real money play, rather than granting them further rights which are not granted to other players. It would be surprising indeed if a resident of Australia (which is not a Prohibited Jurisdiction) and who was permitted to make deposits and engage in real-money play, had lesser rights in relation to the balance of an existing account with the former operators of the Full Tilt Poker site.
12. Still further, the third sentence of cl 5.11 is significant. That sentence provides that the "foregoing restriction" applies to residents of other nations who happen to be located in a Prohibited Jurisdiction (for example, an Australian on holiday in Hawaii or France). The "foregoing restriction" is engaging in real-money play. Thus an Australian with an existing account balance who happens to be in Hawaii or France cannot engage in real-money play. It would seem to follow that an Australian with an existing account balance can engage in real-money play while in Australia. There is, of course, no point in engaging in real-money play if winnings cannot be withdrawn.
13. A construction whereby Rational FT Enterprises Ltd assumed an obligation to pay out the balances of accounts which had been "frozen" makes commercial sense. The new operators had paid a very large amount of money and had also assumed an obligation under cl 5 of the USA Settlement Deed which was, at the least, enforceable by the United States of America in a federal court, to pay out all non-US players.
14. The USA Settlement Deed does not distinguish between affiliate funds and player funds. It simply requires that the companies purchasing the Full Tilt Poker assets "shall make available for immediate cash withdrawal, without limitation or restriction other than as required by any applicable law, the online poker account balances of all non-U.S. players of the Full Tilt Group ...". In contrast, cl 6 of the document made provision for the United States to "effectuate a remission process pursuant to Title 18, United States Code, Section 981(d) and (e) and 28 CFR, Part 9 for the Full Tilt Group's former U.S. players ..."
15. It is self-evident that the new operators sought to encourage persons who had formerly played poker on the Full Tilt Poker site to continue to do so. That commercial objective was best achieved by assuming the liability of the former companies to their former players, as part of the consideration for the settlement.
16. Against those considerations, the respondents advanced the following submissions.
17. First, it was said that the new terms to which Mr Benson adhered precluded Mr Benson's business of converting account balances into money and charging a brokerage. But it was not suggested, nor could it have been suggested, that Mr Benson's promise to the fourth respondent in November 2012 was relevant to a dealing which had taken place in June 2011 when the website was controlled by other companies and the fourth respondent did not exist.
18. Secondly, it was put that Mr Benson was not a "player" and so was not entitled to the US$285,000. "We say Mr Benson is not a player: he's conducting a business through Intercash." But as Emmett AJA said: "If he wasn't a player, why was he entitled to withdraw any of the funds? From the goodness of your heart, you're prepared to make a concession to him?"
19. That led to the respondents' concession that what mattered was not whether or not Mr Benson was a player, but whether the funds were "affiliate funds". The primary judge had stated, at [286], that "the amount held in the OzGary Player Account that had been transferred by from [sic] the pokernews1 player account, was accepted as being 'affiliate earnings'". That finding was challenged by ground 4 of the appeal. I accept Mr Benson's submission that the finding does not accurately reflect the concession at trial. It was not conceded that the characterisation of the debt owed by the former operators of the Full Tilt Poker website to iBus Media determined whether or not such earnings after they had been "transferred" into the OzGary account were caught by the promise in cl 5 of the USA Settlement Deed to pay "all non-U.S. players" in full, or the obligation in the EULA to permit withdrawal of funds.
20. Thirdly, the respondents relied on the emails in November 2012 immediately before Mr Benson regained access to his account. It is true that the November emails reproduced above made it clear that the respondents did not regard themselves as bound to pay the $US285,000 to Mr Benson. However, they did so on the basis of the liabilities which had been assumed under the settlement with the United States government. They were erroneous insofar as they denied any assumption of liability. They expressed the view that they were not obliged to pay "any affiliate earnings", while at the same time acknowledging, in my view correctly, that there was an obligation to pay out in accordance with cl 5 of the USA Settlement Deed, which refers to "all non-U.S. players". I accept Mr Benson's submission, in accordance with grounds 6-9 of the appeal, that the emails are to be taken as confirming that the respondents accepted that they were bound by the settlement.
21. Hence I conclude that the fourth respondent Rational FT Enterprises Ltd was obliged to transfer the entirety of the balance of Mr Benson's account to him, not merely all save US$285,000, when he called for it.
22. The obligation is implied, rather than express (as is the case for residents of Prohibited Jurisdictions). For the reasons given above, the obligation upon Rational FT Enterprises Ltd to permit users who are not residents of Prohibited Jurisdictions to withdraw their account balances is (1) reasonable and equitable, (2) necessary to give business efficacy to the contract, (3) so obvious that "it goes without saying", (4) capable of clear expression and (5) does not contradict the express terms of the contract, thereby satisfying all elements of the test stated in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-3. In particular, the contract would be unworkable if residents of places other than Prohibited Jurisdictions could engage in real-money play (save when they are located in a Prohibited Jurisdiction) but not withdraw those funds if they won, and it would be neither reasonable nor equitable if residents of places other than Prohibited Jurisdictions could withdraw their funds but other players could not. This seems to be a case where, although special provision is made for residents of Prohibited Jurisdictions, and players temporarily located in Prohibited Jurisdictions, it was so obvious that all players would be able to withdraw their accounts that it "went without saying". It is not necessary in reaching that conclusion to consider the implication of terms in fact or in law in any greater detail; cf Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32 at [19]-[29], [56]-[62] and [113]-[118].
23. Mr Benson submitted that all four respondents were parties to the EULA. He relied on its second paragraph, and in particular the words: "By entering into this agreement you acknowledge that Full Tilt Poker is part of a group of companies", and the fact that the document proceeded to define "Group" broadly to include Rational FT Enterprises Limited and its subsidiaries and holding companies. Mr Young submitted that "the fact that it is there immediately after identifying a contracting party as Rational FT Enterprises suggests this was a matter of great importance for the drafter of this agreement, and that the concept of the group was central to the operation of this agreement."
24. The agreement was governed by the laws of the Isle of Man (cl 14). There is no reason to think that, in this respect, they differed from Australian law, and no submission or evidence was made by either party that there might be any difference.
25. The first paragraph of the agreement states, unambiguously, that the document "constitutes a legally binding agreement between you and Rational FT Enterprises Limited", and then defines the latter as "Full Tilt Poker". The second paragraph contains an acknowledgement that "Full Tilt Poker" is part of a group, and defines the term "Group". The acknowledgement does not undermine the identification of parties in the first paragraph. Based on the material relied upon by Mr Benson, only the fourth respondent - which was the named contracting party, as well as the company licensed by the Isle of Man Gambling Commission - was bound.

Unjust enrichment

1. The primary judge also rejected Mr Benson's alternative case in unjust enrichment. The entirety of his Honour's reasons for doing so has been reproduced above. Grounds 15, 16 and 18 of the appeal challenged that conclusion.
2. In essence, Mr Benson submitted that he had suffered loss and those respondents which were parties to the USA Settlement Deed had received a benefit when they failed to comply with their promise to the United States of America to transfer the US$285,000 to him. The premise of this ground was that Mr Benson was a "non-U.S. player" whose account was one of those accounts, believed to total approximately US$184 million, to which cl 5 of the USA Settlement Deed applied. For the reasons already given, that premise should be accepted.
3. Mr Young, who appeared for Mr Benson at trial and on appeal, sought to rely upon the general principle of law enunciated by Gaudron J in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 at 176; [1988] HCA 44: "In my view it should now be recognized that a promisor who has accepted agreed consideration for a promise to benefit a third party is unjustly enriched at the expense of the third party to the extent that the promise is unfulfilled and the non-fulfilment does not attract proportional legal consequences. Although exceptions to and qualifications of the rules of privity and consideration and the doctrines of trust and estoppel operate in certain circumstances to preclude any unjust enrichment, the exceptions, qualifications and doctrines should not be seen as reasons to impede the development of legal principle which will obviate all possibility of unjust enrichment. Rather, their existence should be seen as demonstrating the necessity for the recognition of such an obligation."
4. The submission had not been advanced in Mr Young's written submissions at trial. Those submissions did not mention Trident and referred only to uncontroversial propositions taken from other decisions of the High Court. A brief oral submission was made, prefaced by "I don't have in my submissions, since I only appreciated its significance later, reference to Trident General Insurance Co Ltd v McNiece Bros." Mr Zahra did not respond to what had been put orally concerning Trident and understandably nothing was said in reply. It may be that those circumstances explain why the primary judge did not deal with a point, which - contrary to the tenor of Mr Young's submissions on appeal - was far from at the forefront of his case at trial.
5. On appeal, Mr Benson's submission was confined to what Gaudron J had said in Trident. Mr Benson submitted that her Honour's judgment was good authority for the alternative claim for moneys had and received. He said that he was a third party named in the USA Settlement Deed, and so could enforce that directly in unjust enrichment. He acknowledged that "I can't find very much in terms of authority one way or the other" on her Honour's judgment. Nevertheless, he maintained that more recent decisions on unjust enrichment did not "close down" the right indicated by her Honour.

The artificiality of applying a novel principle of Australian law to the USA Settlement Deed

1. There is a large degree of artificiality in applying the principle stated by Gaudron J in Trident to the USA Settlement Deed. That deed was made in the United States of America, between the federal government of that country and respondents many of whom were residents of that country and who were parties to a proceeding in the District Court in New York. It was confirmed by a United States federal judge.
2. Neither party made any submissions as to the choice of law question which arises, even though if anything is clear, it is that the companies said to have been enriched, the money which they have declined to make available and the promise which is said to have been breached are all located outside Australia. In such a case, an analysis of the relevant principles of choice of law is essential. It is essential first to identify the legal character of the claim, and then to determine the applicable choice of law rule: Sweedman v Transport Accident Commission (2006) 226 CLR 362; [2006] HCA 8 at [25]; Redbro Investments Pty Ltd v Ceva Logistics (Australia) Pty Ltd (2015) 89 NSWLR 104; [2015] NSWCA 73 at [15] and [17].
3. The character of Mr Benson's claim is one of unjust enrichment for moneys had and received. The appropriate choice of law rule is that the applicable law is the law of the place with which the obligation to make the payment has the closest connection: see Sweedman v Transport Accident Commission at [27]-[29]. That is the law of the United States of America, or, more precisely, the law of New York as applied in the federal court located in that State.
4. There was a suggestion in Mr Young's response when this point was raised that the law in New York is the same as that of Australia (by that was meant the common law unaffected by federal legislation such as s 48 of the Insurance Contracts Act and State legislation such as s 55 of the Property Law Act 1974 (Qld)). For reasons which I shall presently give, the point does not arise, but if it did, not lightly would I have been prepared to proceed on that basis. Courts are rightly reluctant to pronounce judgments on hypotheses which are not correct, as was observed in this context in Damberg v Damberg (2001) 52 NSWLR 492; [2001] NSWCA 87 at [160] and [162]. It is notorious that, broadly speaking, most jurisdictions in the United States long ago relaxed the restrictions imposed by the rules of privity at least insofar as it applied to third party beneficiaries. There is nothing obscure about that divergence between Australian law and the law in the various States of the United States of America. In Trident itself, Mason CJ and Wilson J referred to it, noting that "in the United States an intention to benefit a third party alone is necessary" in order for the third party to be able to sue the promisor directly: at 122-123. Earlier, Windeyer J had said in Coulls v Bagot's Executor and Trustee Co Ltd (1967) 119 CLR 460 at 495; [1967] HCA 3, "In the United States the question does not now arise in the same way as it does for us. There, in most but not in all jurisdictions, third persons (both donee-beneficiaries and creditor-beneficiaries as they are called) are now able to sue directly upon contracts made by others for their benefit." The history is summarised in L Wilson, "Contract and Benefits for Third Parties" (1987) 11 Sydney Law Review 230 at 243-245, referring to the position in the United States: "The contract beneficiary doctrine is founded solely on contractual notions. It requires 'a contract in which the promisor engages to the promisee to render some performance to a third person'. It is essential that this contract between the promisor and promisee be a valid, binding contract supported by consideration. And it is the contract itself which creates the third person's right. Recognition of the contractual foundation of the third party's right is found in s 309 of the Second Restatement of the Law of Contracts in its acknowledgement that 'The right of a third person for whose benefit a promise is made is effected with all the infirmities of the agreement as between the parties thereto'. In other words, in any action on the contract by the third party, the promisor may raise any available defences that effect the validity or enforceability of the contract."
5. Thus it may well be that Mr Benson had a contractual claim against the first and third respondents under the law of New York. If so, that would tell against a claim in unjust enrichment.
6. However, the foregoing should not be read too dogmatically. The "intention to benefit" test applicable in the United States is far from free from complexity, as is well illustrated in D Epstein, A Cook, J K Lowder and M Sonntag, "An 'App' for Third Party Beneficiaries" 91 Washington Law Review 1663 (2016). The abstract of their article commences, "Every year, more than 100 reported court opinions consider the question of whether an outsider can sue for damages under a contract made by others - in part because the law is so ambiguous". I am also conscious that the USA Settlement Deed is not merely an agreement. It appears also to have the character of a court order. Express provision is made for its enforcement and for the consequences if the respondents fail to perform their obligations (which include in cl 2 paying hundreds of millions of dollars to the United States Marshals Service over a three year period). It may be that some or all of those matters tell against, as a matter of New York law, the USA Settlement Deed giving rise to private law rights, enforceable in foreign jurisdictions, on the application of a non-party.
7. But these matters must be put to one side. No claim under United States law was advanced by Mr Benson at trial or on appeal. Neither party served foreign law notices under UCPR r 6.43. In the absence of any pleading, or evidence, or submissions as to the principles of United States law governing the right in unjust enrichment which Mr Benson seeks to invoke, it would not be fair to determine this appeal on that basis.
8. Rather than relying on foreign law, this limb of Mr Benson's appeal stands or falls on a novel proposition of Australian law, namely, the broader principle enunciated by Gaudron J in Trident. With great respect to her Honour, I do not accept that this is the law of Australia. In order to explain why, it is necessary to elaborate upon what precisely was held by this Court and by the High Court in Trident.

Trident in the New South Wales Court of Appeal and the High Court

1. McNiece Bros Pty Ltd was a contractor of the insured, Blue Circle Southern Cement Pty Ltd, and Trident's policy was expressed to apply to "Blue Circle Southern Cement Limited, all its subsidiary, associated and related Companies, all Contractors and Sub-Contractors and/or Suppliers." In the Court of Appeal in Trident, McHugh JA accepted the submission that a beneficiary under a policy of liability insurance could sue on the policy even though the beneficiary was not a party and had provided no consideration: Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270. McHugh JA, with whom Hope and Priestley JJA agreed, took that step in light of statutory reforms, instancing the Motor Vehicles (Third Party Insurance) Act 1942 (NSW) and the Insurance Contracts Act 1984 (Cth). (The latter Act was in force at the time of the decision, but did not apply to the liability which had given rise to the litigation, which arose out of an accident in 1979.) His Honour also relied upon the limitations in the existing mechanisms developed at law (notably, agency) and in equity (notably, trust) to respond to the possibility that the evident commercial intent might be frustrated by the rules of privity.
2. In the High Court, Mason CJ, Wilson and Toohey JJ accepted that a third party could sue an insurer (Toohey J's reasoning was somewhat narrower than that of Mason CJ and Wilson J, but nothing presently turns on that). Brennan, Deane and Dawson JJ declined to change the law. Deane J considered that Trident's promise was held on trust for the benefit of the third party, and proposed orders which, subject to procedural steps, would in all likelihood have seen the appeal dismissed on that basis. Deane J, much more cautiously than Gaudron J, referred to it being "conceivable" that an insurer who accepted a premium and refused to pay a third party might be liable.
3. Gaudron J agreed with Mason CJ, Wilson and Toohey JJ that the appeal should be dismissed, and that the third party could recover against the insurer. However, her Honour disagreed that the doctrine of privity was inapplicable, instead agreeing with Brennan, Deane and Dawson JJ that the third party could not recover in contract. Unlike all other members of the Court, she considered that a third party had a right to sue based not in contract, but on unjust enrichment.

The position in light of Trident

1. Trident's appeal was dismissed by the High Court. Those four judges who favoured dismissing the appeal did so for irreconcilably different reasons. While three would relax the privity doctrine, Gaudron J expressly held that McNiece Bros could not recover under contract because of privity, in that respect reaching the same conclusion as the three dissenting judges. There is a thus large question as to the precedential effect of Trident, an issue which mostly arises in connection with attempts to rely on the relaxation of the privity doctrine accepted by three of the four members of the majority. There seems to be a divergence of views on the question (now academic in relation to insurance to which s 48 of the Insurance Contracts Act 1984 (Cth) applies) as to whether a stranger to a policy of insurance may sue at law to enforce a promise given for its benefit: see Rail Corporation of New South Wales v Fluor Australia Pty Ltd [2008] NSWSC 1348 at [181] (appeal allowed on other grounds [2009] NSWCA 344) and Dalton v Ellis; Estate of Bristow (2005) 65 NSWLR 134; [2005] NSWSC 1252 at [30]; cf Mizzi v Reliance Financial Services Pty Ltd [2007] NSWSC 37 at [71] and Silver v Dome Resources NL [2007] NSWSC 455 at [110]-[114] (an appeal was dismissed without considering the issue: Dome Resources NL v Silver (2008) 72 NSWLR 693; [2008] NSWCA 322).
2. Plainly enough, Trident lacks any ratio decidendi. That does not mean that it lacks precedential authority. In my view, the position is as stated by by McHugh J in Re Tyler; Ex parte Foley (1994) 181 CLR 18 at 37; [1994] HCA 25, by reference to the speech of Lord Reid in Midland Silicones Ltd v Scruttons Ltd [1962] AC 446 at 479: "In my opinion, the true rule is that a court, bound by a previous decision whose ratio decidendi is not discernible, is bound to apply that decision when the circumstances of the instant case 'are not reasonably distinguishable from those which gave rise to the decision'."
3. That approach was applied by his Honour in D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12 at [134], by Callinan J in Western Australia v Ward (2002) 213 CLR 1; [2002] HCA 28 at [695] and by Kirby J in Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28; [2003] HCA 72 at [82], as well as by a Full Court of the Federal Court in Trade Practices Commission v Abbco Ice Works Pty Ltd (1994) 52 FCR 96 at 99, 113-114 and 130 (cf at 107) dealing with a materially identical problem of High Court precedent.
4. I think the better view is consistent with that stated by the unanimous decision of the Full Court of the Supreme Court of Western Australia in Co-Operative Bulk Handling Ltd v Jennings Industries Ltd (1996) 17 WAR 257, where it was held, approving what had previously been upheld by Brownie J in Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170, that the exception to the rules of privity to non-parties who were named in an insurance contract applied not merely to liability insurance but to property insurance. That amounts to a further incremental step beyond what was held in this Court or the High Court in Trident, but is consistent with the reasons given by this Court and three of the judges in the majority of the High Court for the change in law. There is no sound reason to distinguish, in this respect, liability and property insurance, or for that matter, other forms of insurance.
5. In any event, the decision of Co-Operative Bulk Handling Ltd v Jennings Industries Ltd is that of an intermediate appellate court on a question of common law, and I am not for a moment persuaded that it is sufficiently plainly wrong not to be followed.
6. But Mr Benson's much more ambitious submission invites this Court to find that the principle enunciated in Gaudron J's reasons reflects the law of Australia. I would reject the submission.
7. The principle which found favour with Gaudron J has no precedential force. Her Honour's approach was accepted by no other member of the High Court. Indeed, Brownie J noted in Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170 at 176-177 that such a claim had not been pleaded, or argued at trial, or in the Court of Appeal, or in the High Court itself. Her Honour's reasoning is unsupported by the judgment of any other judge of the High Court, save for the highly qualified acknowledgment by Deane J in relation to an insurer. Although as I have sought to explain, Trident is not without precedential force, it does not bind other Australian courts other than as to the relaxation of the doctrine of privity in insurance contracts.
8. That does not, of course, detract from the persuasive force of Gaudron J's reasoning. However, the principle stated by Gaudron J has been extensively criticised, not least because the enrichment on the part of the party who fails to honour its promise is at the expense of the party who provided consideration, rather than the third party from whom, ex hypothesi, no consideration has moved: see for example M Furmston and G Tolhurst, Privity of Contract (Oxford University Press, 2015), pp 24-25; I Jackman, Recent cases (1989) 63 Australian Law Journal 368 at 369 and K Soh, "Privity of Contract and Restitution" (1989) 105 Law Quarterly Review 4 at 5-6. The 6th edition of Goff & Jones, The Law of Restitution (Sweet & Maxwell, 6th ed, 2002) at 504 describes Gaudron J as having adopted a "radical proposition" and stated that "Gaudron J's reasoning has been properly criticised". I respectfully agree.
9. Further, if the principle enunciated by Gaudron J were to be regarded as part of the Australian common law, as Mr Benson submitted, then it might be expected that it would be endorsed in the standard Australian work. However, her Honour's decision is cited in K Mason, J Carter and G Tolhurst, Mason & Carter's Restitution Law in Australia (LexisNexis Butterworths, 3rd ed 2016) at p 415 as a note to the proposition "care must be taken to ensure that restitution is not deployed inappropriately".
10. Has the principle enunciated by Gaudron J attracted the support of later authority? Mr Young sought to obtain support from a single first instance decision, that of Gummow J in Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363. Page 375 of the report records that counsel for Winterton had relied on Gaudron J's judgment in Trident, and the second, third and fourth paragraphs on that page reproduce portions of that judgment. The fifth paragraph of those reasons was critical of Gaudron J's reasoning: "This use of a principle of unjust enrichment to overcome perceived defects in the law as to privity of contract has been criticised by various commentators: see Notes (1989) 105 LQR 4; (1989) 63 ALJ 368. In Trident, Deane J dealt more cautiously with the role of principles of unjust enrichment in third party contracts, saying (CLR at 145-6) that if an insurer had received a premium for a policy but then refused to indemnify a third party on the ground that it was a stranger to the contract of insurance, those circumstances 'could conceivably' give rise to a cause of action by the third party against the insurer 'founded' upon principles of unjust enrichment."
11. Gummow J's reasons proceed to note that counsel for Winterton conceded that her Honour's statement "did not directly support an action such as his client sought to frame", and that counsel then advanced a narrower proposition, namely, that his pleading should not be regarded as foreclosed by what Lord Diplock had said in Orakpo v Manson Investments Ltd [1978] AC 95 at 104 as to there being "no general doctrine of unjust enrichment recognised in English law". After mentioning further authorities Gummow J said that he accepted counsel's proposition, so far as it went, but then struck out the pleading because it failed to prove material facts showing enrichment of Hambros at the expense of Winterton in circumstances demonstrating the necessary element of injustice.
12. Contrary to Mr Benson's submissions, Winterton Constructions Pty Ltd v Hambros Australia Ltd does not support the broad relaxation of the doctrine of privity recognised by Gaudron J in Trident. It was a strike out application, and the unsuccessful party's reliance on her Honour's reasons was criticised in terms by Gummow J. I read his Honour's reasons as accepting a proposition connected with Orakpo v Manson Investments Ltd, rather than endorsing Gaudron J's reasons in Trident.
13. I have addressed this issue somewhat elaborately, in light of its prominence in the submissions in this Court. It is not the only occasion in which attempts have been made to rely upon Gaudron J's reasons in Trident. In addition to Winterton Constructions, see what was submitted and rejected by McDougall J in Rail Corporation of New South Wales v Fluor Australia Pty Ltd [2008] NSWSC 1348 at [153] and [186], and perhaps also the submission recorded in Ceedive Pty Ltd v May, Timms, McFadden and Mudway [2005] NSWSC 222 at [79]. My conclusion is that notwithstanding the persuasive weight which is to be given to any decision of any member of the High Court, and not least Gaudron J, the general principle stated by her Honour is not one recognised by Australian law.

Remaining grounds of appeal

1. The foregoing deals with grounds 4-18 of this appeal. The remaining grounds may be resolved concisely.
2. The first (ground 1) turned on a matter of pleading. At [283], the primary judge accepted a submission which had been made by the defendants at trial that the fact that the plaintiff was acting as a trustee had not been pleaded. But Mr Benson claimed an entitlement to sue at law. In this respect, he was no different from any other trustee. There was no need to plead any facts to indicate that he was a trustee or that the debt on which he sued was trust property.
3. Ground 2 challenged the second matter relied upon by the primary judge, at [284], which was that Mr Benson's case was different from what had been pleaded in the District Court. No more need be said of this, because the respondents conceded that this reason was not critical to the orders made by the primary judge.
4. Ground 3 challenged the third point made by the primary judge, at [285], which was that there was no evidence that any of the defendants, and if so which of them, received the US$285,000 or any part of that amount. Once again, that finding may be accepted, but is not dispositive. Indeed, it is irrelevant. No claim was pressed based on tracing, whether at law or in equity. Mr Benson's amended statement of claim abandoned all proprietary claims, and was confined to personal claims. His case was that either the respondents were obliged as a matter of contract to pay the entirety of the balance owing to Mr Benson (the full US$806,744.17, rather than only US$521,744.17), or else that retaining the US$285,000 would give rise to their being unjustly enriched.

Orders

1. For those reasons, the appeal should be allowed, the substantive orders dismissing the proceedings be set aside, and in lieu thereof there should be judgment in favour of the plaintiff against the fourth respondent. On 19 July 2017, the primary judge set aside the only substantive order made on 13 July, in order to make special costs orders, seemingly in light of a Calderbank letter or offer of compromise, with the result that the only orders that will need to be set aside on appeal are those made on 19 July 2017.
2. There appears to be no reason why costs in this Court should not follow the event. Although three of the respondents have been successful, they made common cause throughout the litigation, filing a single defence and being represented by the same solicitor and counsel. However, the parties have not to date made submissions on whether Mr Benson's claim in contract and unjust enrichment for US$285,000 engaged UCPR r 42.34, which applies to litigation which could have been determined by the District Court. The equitable relief originally sought, which was concededly misconceived, would appear not to displace the rule; cf Rehau Pte Ltd v AAP Industries Pty Ltd [2018] NSWCA 96 at [100]-[102]. There may also be correspondence which is relevant to the discretion as to costs of which this Court is unaware. The orders I propose will permit them to be heard on that point.
3. The notice of appeal relevantly sought an order that an amount of US$285,000 plus interest under s 100 of the Civil Procedure Act 2005 (NSW) since 15 November 2012 be paid. The fourth respondent being an Isle of Man company, it seems desirable for this Court's orders to be framed in terms of a judgment debt. Mr Benson is prima facie entitled to pre-judgment interest. It would seem likely that interest should be calculated in accordance with Practice Note SC Gen 16 (see, for example, Gujarat NRE Coke Ltd v Wollongong Coal Ltd (No 2) [2017] NSWSC 384), but the orders will permit the parties to be heard if that is not agreed. They should be able to agree whether any correction is required to the name of the second respondent.
4. I propose the following orders: 1. Appeal allowed in part. 2. Set aside orders 1 and 2 made on 19 July 2017, and in lieu thereof dismiss the proceedings as against the first, second and third defendants. 3. Direct the parties to supply within 21 days (a) agreed short minutes of order, or (b) in lieu of agreement, short submissions and the orders they seek, as to the form of the judgment against the fourth defendant. 4. The respondents to pay the appellant's costs of the appeal. 5. In relation to (i) the name of the second respondent, (ii) the costs at first instance and (iii) any variation to order 4 above which may be sought, the parties are to file and serve (a) agreed short minutes of order within 21 days, or alternatively (b) short outlines of submissions and any relevant evidence in support of the orders sought by each of them within 14 days, and if they see fit a reply within 7 days thereafter, with a view to any dispute being resolved on the papers.
5. EMMETT AJA: The appellant, Mr Gary Benson, claims that one or more of the respondents (together the Rational Group) should pay to him the sum of $US285,000. The claim arises out of arrangements originally entered into by Mr Benson with a group of companies (the FTP Companies), which operated an online poker playing business under the name Full Tilt Poker (the Poker Operation). The Rational Group acquired certain assets of the Poker Operation and undertook to the United States Government to meet certain liabilities of the FTP Companies. The dispute between Mr Benson and the Rational Group concerns the extent of the liability of the FTP Companies to Mr Benson that the Rational Group undertook to meet.
6. The FTP Companies operated the Poker Operation through an internet website (the FTP Website). Software could be downloaded from the FTP Website that enabled persons who set up an account with the FTP Companies to play poker online by means of the software. Players could play either for real money or for play money. Where a player wished to play for real money, the player was required to establish a player account by deposit of currency. A deposit could be effected in cash, by credit of poker winnings or by transfer from another account maintained in connection with the FTP Website. Poker losses, transfers to other accounts maintained in connection with the FTP Website or withdrawals by the player were debited to the player account. In effect, amounts credited to the player account constituted advances by the player to the FTP Companies. A player could also transfer money from his player account to another player account.
7. Mr Benson established a player account with the FTP Companies under the name "OzGary". Mr Benson advanced funds such that his "OzGary" player account had a credit balance. From 2006 to 2009, he played online poker and further amounts were credited to his player account.
8. The FTP Companies promoted the Poker Operation through third parties, which it described as "affiliates". An affiliate promoted the Poker Operation in exchange for credits made to its "affiliate account" with the FTP Companies. Affiliate accounts were different from player accounts. A player who had both an affiliate account and a player account could have an amount debited to the affiliate account and credited to the player account.
9. iBus Media Limited (iBus) was an affiliate of the FTP Companies and received earnings as an affiliate for promoting the Poker Operation. iBus had an affiliate account with the FTP Companies to which its earnings in promoting the Poker Operation were credited. iBus also established a player account with the FTP Companies under the name "PokerNews1".
10. It appears that the FTP Companies were slow in complying with the requests from players to withdraw amounts standing to the credit of their player accounts. In October 2008, Mr Benson established InterCash Pty Ltd (InterCash). The business of InterCash consisted of the provision of a facility for players in the Poker Operation to convert balances in their player accounts into money without relying on the FTP Companies to arrange for withdrawal from player accounts. InterCash retained part of the proceeds by way of commission. The mechanism of the business conducted by InterCash was for the player in the Poker Operation to transfer an amount from the player's account to Mr Benson's "OzGary" account. Mr Benson would then withdraw the amount transferred and would pay it to InterCash. InterCash would then pay to the player the amount transferred less the commission.
11. The precise relationship between Mr Benson and InterCash in that regard is not entirely clear. Mr Benson himself conducted a website which contained a heading "Cashing out from Full Tilt Poker". The website relevantly said as follows: "To help FTP players who would like to cash out, I can help as follows: Transfer the amount you would want to withdraw to my FTP player ID OzGary and complete a transaction request indicating where you would like the funds sent. You will need to set up your account details in your transfer area and I will transfer the proceeds according to your instructions within 24 hours. … Commission charged on withdrawals is 2.5% where requesting an AUD or NZD bank transfer and 3.5% on other bank transactions. Cash is available in limited circumstances upon request but a 1% premium in commission applies. Commission on transfers to other poker sites is 2%." The homepage of Mr Benson's website also invites dealings along those lines with the following: "Gary Benson is pleased to offer InterCash through his website. InterCash is a fund transfer system that will enable you to transfer money between your bank account(s), betting accounts and other online poker accounts. To use InterCash, you will need to register. Click on 'Transact with InterCash' in the right hand menu to open the InterCash facility and to transfer funds."
12. Mr Benson accepted in evidence that in providing "a cashing out service", InterCash used the OzGary player account. That is to say, InterCash provided the funds from the InterCash bank account to the end user and Mr Benson provided the funds to InterCash to enable that to happen. Mr Benson said that he had an arrangement with InterCash such that any monies received in his OzGary player account had to be accounted to InterCash and InterCash would then be responsible for sending the funds from the InterCash bank account into the bank account of the client who had requested the transaction. He said that he would account for the whole of the sum, which he would give to InterCash. InterCash would then deduct the commission before making the payment to the client.
13. On 22 June 2011, iBus transferred the sum of $US285,000 from its "PokerNews1" player account to Mr Benson's "OzGary" player account with the intention of taking advantage of the cashing out service offered by InterCash. On 29 June 2011, before Mr Benson had withdrawn the sum of $US285,000 from the "OzGary" player account, the FTP Companies froze all of its player accounts, including the OzGary player account. At that time, the balance standing to the credit of the OzGary player account was $US806,744.17.
14. Mr Benson said that when the transaction of $US285,000 was put in place, there was no agreement or arrangement with iBus. Later, an arrangement was made when iBus notified Mr Benson that the funds had been transferred into his player account and they asked for InterCash to pay them the proceeds less the commission.
15. When neither Mr Benson nor InterCash paid to iBus the sum of $US285,000, iBus sued Mr Benson in the District Court of New South Wales, claiming the sum of $US254,300, being the amount of $US285,000 less the commission payable to InterCash. Mr Benson filed a defence in the proceedings asserting that InterCash should be the defendant. Ultimately, the proceedings were settled and the question of whether Mr Benson or InterCash had a liability to iBus was not determined.
16. In the meantime, the United States Government commenced proceedings against the FTP Companies in New York. Those proceedings were ultimately settled. On 27 July 2012, a settlement deed (the Settlement Deed) was executed and, on 31 July 2012 orders were made by the New York Court to effect the settlement (the Court Orders). The parties to the Settlement Deed included the United States Government and various companies collectively referred to as "the PokerStars Companies". The PokerStars Companies were defined by the Settlement Deed to include the first respondent, Rational Entertainment Enterprises Limited (Rational Entertainment), and the third respondent, Oldford Group Limited (Oldford). Neither the second respondent, Rational Group Limited (Rational Group), nor the fourth respondent, Rational FT Enterprises Limited (Rational Enterprises), was included in the definition of "the PokerStars Companies".
17. The effect of the Deed of Settlement and the Court Orders was that certain assets of the FTP Companies that had been confiscated by the US Government were to be transferred to the PokerStars Companies. In consideration for that transfer, the PokerStars Companies were to pay the sum of $US547 million to the United States Government.
18. Relevantly for present purposes, the Deed of Settlement imposed an obligation on the PokerStars Companies to provide consideration in the sum of $US731,000,000 for the transfer of assets of the FTP Companies. That consideration was to be provided by:

• paying the sum of $US547 million to the United States government; and
• making available for immediate cash withdrawal, without any limitation or restriction other than as required by any applicable law, the online poker account balances of all non-US players of the FTP Companies as of 29 June 2011, estimated to be approximately $184 million. The Settlement Deed provided, however, that the PokerStars Companies did not assume "any liability of the [FTP Companies] other than those explicitly provided" in the Settlement Deed.

1. On 1 November 2012, Mr Benson accessed the FTP Website and downloaded new software. In the course of that process, a document headed "Full Tilt Poker End User License Agreement" appeared on screen (the Licence Agreement) and Mr Benson agreed to the terms of the Licence Agreement by clicking a box on the screen. The Licence Agreement describes Rational Enterprises as a contracting party and also refers to "the Group", which is defined as meaning Rational Enterprises together with its subsidiaries and any holding company of Rational Enterprises and any subsidiary of such holding company and any associated company including, but not limited to, associated companies providing services under the trademark "PokerStars". Oldford is the holding company of Rational Entertainment, Rational Group and Rational Enterprises. Mr Benson contends, therefore, that all four respondents are comprised in the term "the Group" and are therefore parties to the Licence Agreement.
2. Clause 6 of the Licence Agreement provides that the policy and criteria for a player to effect deposits into and withdrawals from his or her player account can be found in the "Real Money, Single Click Deposit, and Withdrawals" pages of the FTP Website. The "Real Money" page of the site relevantly provided in relation to deposits: "Earn Full Tilt Points for every hand you play. It's easy to get started, just click the Cashier Chip…, then choose "Deposit". For details, check the Payment Processing section. Also, see how you can transfer funds from one player to another, check Player to Player Transfers for more information…"
3. The "Withdrawals" page relevantly provided: "At Full Tilt Poker, we believe our players should be able to withdraw funds from their accounts as easily as they can make deposits."
4. It then provides the following instructions for making withdrawals: "Withdrawing from your Full Tilt Poker account is quick and easy. Log on to Full Tilt Poker and click the "Cashier" button on the left hand side of the Lobby. Once you are inside the Cashier window, click on the Cash Out button underneath your name. A pop-up window will appear showing your available balance. Enter the amount you would like to cash out from your Full Tilt Poker account in the "Cash Out Amount" field… Click 'OK' and a dialogue box will pop up advising you that your withdrawal request is pending. Your withdrawal will be credited back to the same payment processor… that you used to make your deposit within 48 hours of your request…"
5. Clause 5.3 of the Licence Agreement deals with "player to player transfers". The provision sets out terms and conditions applying to "the real money transfer facility". First, Rational Enterprises reserved the right to decline any account transfer requests or to overturn any account transfer upon suspicion of breach of any of the terms of the Licence Agreement. Secondly, sending users were only entitled to make an account transfer to enable a receiving user to play "the Games" and for no other purpose and receiving users agreed that they may only use the funds from an account transfer to play "the Games" and for no other purpose. Finally, it was provided that users could not cash out funds directly received from a transfer. Winnings arising from playing "the Games" using the transferred funds that subsequently contributed to a cash out request were to be reviewed in accordance with Rational Enterprises' internal controls, policies and procedures.

The Appeal

1. Following a trial over three days, a judge of the Equity Division ordered that Mr Benson's claims be dismissed with costs. By notice of appeal filed on 9 August 2017, Mr Benson appeals from the orders made by his Honour. I have had the advantage of reading in draft form the proposed reasons of Leeming JA for concluding that the appeal should be allowed in part.
2. It is common ground that the FTP Website is now conducted by Rational Enterprises, which conducts the Poker Operation in the same fashion as the FTP Companies did prior to the freezing of their operations. There are good reasons for concluding that, as a consequence of the Settlement Deed, Rational Enterprises novated the arrangements between the FTP Companies, on the one hand, and Mr Benson, on the other, in relation to the OzGary player account. At the time when the assets of the FTP Companies were acquired by the Rational Group, pursuant to the Settlement Deed, the amount standing to the credit of the OzGary player account was $US806,744.17. However, when Mr Benson was able to access the OzGary player account, after Rational Enterprises had, in effect, stepped into the shoes of the FTP Companies and novated the arrangements, the credit balance had been reduced by $US285,000. It had no authority to do so under the Licence Agreement.
3. I agree with Leeming JA, for the reasons proposed, that the substantive orders dismissing the proceedings should be set aside and that, in lieu thereof, there should be judgment in favour of Mr Benson against Rational Enterprises. I agree with the orders proposed by Leeming JA for the reasons proposed by his Honour.

Amendments 07 March 2019 - [11]: First sentence, "OzGary" changed to "OzGary account" [37]: First sentence, "(a)" after "finding that" deleted [67]: Quotation corrected [90]: First sentence, "he" changed to "Mr Benson" [93]: Quotation, "the group" changed to "a group of companies" [106]: "be" inserted after "It may" [107]: Fourth sentence, "of" inserted after "absence of" [114]: Case citation, "Minister of Immigration" changed to "Minister for Immigration" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 March 2019