Foroughi v Star City Pty Limited

16 He went on to depose in the following paragraphs of his affidavit that he was "very surprised" that no one from the casino stopped him and he went back many times, gambling very large amounts of money. 17 A schedule annexed to the affidavit sets out 65 dates on which Mr Foroughi claims to have entered the casino between 11 June 2004 and 28 January 2006. According to the schedule, Mr Foroughi suffered losses on 63 of the 65 occasions, ranging from $1,000 to $73,000. The only winnings referred to in the schedule were $700 on 27 January 2006 and $200 on 28 January 2006. 18 The total amount of losses particularised in the schedule was $612,095. However, Mr Foroughi gave evidence of various other estimates of his losses which I will refer to later. 19 On 7 November 2005, Mr Foroughi filed an application and statement of claim in the Federal Court claiming damages and other relief against Star City. The statement of claim pleaded claims for misleading and deceptive conduct and the other causes of action referred to above, based upon Star City's failure to detect Mr Foroughi and remove him from the casino on approximately 40 occasions commencing 11 June 2004. 20 On 23 November 2005, Ms Virginia Baker, who holds the position of Responsible Gambling Manager for Star City, sent a memo to the Casino's Security Managers and Surveillance Managers about Mr Foroughi's claims. She requested that Mr Foroughi's photograph be placed on a "persons of interest" board, also known as the "hot list", to assist staff to prevent him from entering the casino. 21 In spite of the hot list posting, Mr Foroughi's unchallenged evidence is that he entered the casino on 16 December 2005 and gambled large amount of money on the roulette tables. Indeed, so large was his betting that he claims he was offered the facilities of "the high rollers'" room. He claims to have suffered losses totalling $100,000 on 16 December 2005 and 17 December 2005. 22 On 28 January 2006, Mr Sasko Bujaroski, a senior security officer of Star City, detected Mr Foroughi in the casino. Mr Bujaroski recognised Mr Foroughi as an excluded patron and took steps to have him removed from the premises. Mr Ador Palad, an inspector employed by the Casino Control Authority, spoke with Mr Foroughi and arranged for a security officer to escort him from the casino. 23 On 20 April 2006, Mr Bujaroski again detected Mr Foroughi in the casino in breach of the voluntary exclusion order. Mr Bujaroski then approached Mr Foroughi with Mr Winston Lau, a Casino Control Authority inspector, who arranged for Mr Foroughi to be escorted from the premises. The making of the voluntary exclusion order 24 In his written application for a voluntary exclusion order, Mr Foroughi requested that Star City make the order and acknowledged that Star City would not consider revoking the order until it had stood for at least 12 months. 25 The application contained an acknowledgment by Mr Foroughi that the order did not place any obligation, duty or responsibility on anyone except himself. It contained the following express undertaking: "I undertake that I will, during the period of voluntary exclusion:

• consider myself a self excluded person; and
• recognise that it is my responsibility and I undertake not to enter or gamble within the gaming areas at Star City, being the main gaming floor and the Endeavour Room; and
• seek and continue to seek the assistance and advice of a qualified and recognised problem gambling counsellor." 26 The application also contained an express release and indemnity in favour of Star City from and against all liabilities incurred by it by reason of Mr Foroughi's breach of the voluntary exclusion order. 27 When the application was signed, Mr Foroughi was provided with a notice containing further information about the order and a list of organisations which offered counselling services for problem gamblers. 28 The voluntary exclusion order was expressed to have been made under s 79 of the Casino Control Act. It stated that Mr Foroughi was prohibited from entering or remaining on the premises of Star City while the order remained in force and that it so remained from 18 May 2004 until it was revoked by Star City. 29 The order also stated that s 85 of the Casino Control Act provides that it is lawful for the person in charge of the casino: "using no more force than is reasonable in the circumstances to prevent you from entering or to remove you from the casino while this order is in force."

Mr Foroughi's evidence of the representations 30 Mr Foroughi described in his evidence in chief his version of the events which occurred from the time he decided he wanted to be excluded from the casino. He said he had lost a lot of money, he was stressed, and he went to the information desk where he told an employee that he wanted to be excluded. His evidence was that two people from the casino came down to see him and he told them that he had a gambling problem and he wanted to be banned from Star City. 31 Mr Foroughi continued by saying that he told the employees that he did not want to come to Star City any more and he wanted them to help him. He was taken to a room where there was a security guard. He said he told the security guard the reason he wanted to be banned was that he had been gambling for years, he could not stop himself and he just kept losing. He acknowledged signing some documents and said he was given "an envelope with some information in it and some documents." 32 The critical part of his evidence was as follows: "… the security guard escorted me out and on the stairs he told me that, 'You have done a right thing. I know you are a family man and you are not going to come back,' and I said, 'What happens if I come back?' and he said that, 'Well, we have got 5000 cameras and if you come back, we will catch you and there is a fine and you may go to gaol'.

And what, if anything, was said about whether you would be detected? --- Yes

What was said? --- He said that, 'We have got a' - I said, 'What happens if I could just come in and the cameras, they don't catch, they don't catch me?' He said that, 'We have got a system that no-one can escape from the system, so even if you come, we will catch you'."

Cross-examination of Mr Foroughi on the making of the exclusion order and the representations 33 Mr Foroughi made a series of concessions in cross-examination which lead to an inescapable finding that the effect of the voluntary exclusion order was explained to him and that he understood it. 34 The passages of the transcript which support this finding are as follows: "[D]o you recall that one of the people you spoke to asked you - so one of the people from the casino you spoke to that day said that he wanted to understand the reasons why you were seeking to be excluded? ‑‑‑ Yes.

And he asked you some questions about how gambling had been affecting your life? ‑‑‑ Yes.

And he took you through the application form which is the first page in the bundle in front of you. Do you recall that? ‑‑‑ Yes.

And he read parts of it out to you, didn't he? ‑‑‑ Well, I don't remember that.

I see. You don't deny it, do you? ‑‑‑ No, I don't deny it.

And he asked you whether you understood what he had said to you about the application form? ‑‑‑ I don't remember.

And he asked you a number of questions, did he not, about your understanding of the application form. Do you recall that? --- Yes.

He asked you what your understanding was about how long the exclusion order must stay in place? --- Yes.

And he asked you, 'What is your understanding about what you have to do to have the exclusion order revoked'? --- Yes. And he asked you, 'What is your understanding about who has responsibilities under the exclusion order'? --- Yes. And he asked you, 'What is your understanding of what you are required to do during the period of voluntary exclusion order'? --- Yes. And he asked you, 'What do you understand you are releasing Star City from'? --- Yes. And you gave answers to all of those questions, didn't you? --- Yes. Do you recall now what you said to him in answer to any of those questions? --- Well, I told him that, 'I just want to be out of here and I just want to sign the document and just go.' Yes, but you gave specific answers to the questions that he put to you about your understanding, didn't you? --- Yes. Thank you. Now, he also said to you words to this effect: 'Do you understand what this will mean? You can't come back into the casino. You can't enter any area where there is a security guard standing at an entrance. We don't want to stop you from going to the restaurants or theatres. If you want to go to a restaurant, that is okay, but don't go past any security officer to get there. Also, if you receive any letter or promotional material from Star City, you have to disregard that'? --- Yes. And do you recall he said words to this effect to you: 'This is a voluntary exclusion order. We are happy to do this for you but you have to respect the process and not do anything to breach the order. You must stay away and you must take steps to sort yourself out. The casino is here for people's entertainment and we don't want to see people here who can't afford to be here. If you do come back in, we may issue an involuntary exclusion order which is more serious for you and may lead to a fine if you breach it'? --- Yes. And do you recall that this gentleman from the casino said to you words to the effect, 'Do you understand that the order is permanent until it is revoked in writing'? --- Yes. And you have mentioned already being given a package of material that included information about where you could go for counselling for problem gambling? --- Yes. And do you recall that the gentleman from the casino said words to this effect to you: 'I can see that you have been given a pack. I strongly suggest you have a look in that. Refer to the material and make the phone calls. There are people in there who are professionals who are standing by. It is very important you do that if you feel the urge to make a call. The people are trained and will really assist you in not coming back'? --- I don't remember. But you don't deny that he said words to that effect, do you? --- Yes. And do you recall that the gentleman signed the voluntary exclusion order and one of the gentlemen from the casino said to you words to this effect: 'Pursuant to section 79 of the Casino Control Act, you are prohibited from entering or remaining on the premises of Star City while this order remains in force. This order shall remain in force from today until such time as it is revoked in writing. Do you understand that? Have you got any questions for me'? --- Yes. And did you ask him any questions at that point? --- No." 35 Mr Foroughi conceded that he did not state in his affidavit that he asked "what if the camera doesn't catch me?", and that he did not state that he was told that no one could escape from the system. Nevertheless, he gave that evidence in chief and said he genuinely remembered those words being spoken. His best explanation for their omission from the affidavit was "it just slipped my mind". Star City's evidence of the making of the exclusion order and denial of the representations 36 Two employees of Star City were present when Mr Foroughi signed the application and when the voluntary exclusion order was made. They were Mr Daniel Craze who holds the position of Security Supervisor and Mr David Mackay who was then the Security Operations Manager of Star City. 37 Neither Mr Craze nor Mr Mackay had any independent recollection of the event but they gave evidence of the usual practice they followed when voluntary exclusion orders were made. 38 In addition, Mr Craze prepared an incident report shortly after Mr Foroughi was escorted from the casino. He provided the following details in the report: Time Comments 15.10 I attended the Host Desk at the top of the Southern Entrance regarding a Mr Behrouz FOROUGHI who sought an exclusion order. On arrival I introduced myself to FOROUGHI, escorted him to Interview Room 1 and commenced compiling exclusion order #4295 on his behalf. Whilst compiling the exclusion order, FOROGHI [sic] stated that he had been considering excluding himself for about six years due to gambling causing family problems and financial hardship. He went to say that he has lost about $65,000, that he was afraid that he was going to loose [sic] his children, that his favourite game was Roulette and that he also went by the name Ben. 15.25 Security Operations Manager David MACKAY attended, authorised the exclusion order and confirmed that FOROUGHI understood the conditions. 15.45 FOROUGHI was escorted off the Main Gaming Floor via the Southern Exit. This ending [sic] my involvement in the matter.

39 Mr Craze's evidence of his usual practice was that before starting to complete the application form and order, he explained to the patron that if Star City made an order, the excluded person could not come back into the gaming areas but he or she could go into the hotel and restaurants in the Star City complex. 40 Upon the patron indicating that he or she understood this, Mr Craze's usual practice was to say that an application to revoke the order could not be made for a period of 12 months. He also advised the patron that if he or she continued to enter after the voluntary exclusion order, the casino could revoke that order and make a casino exclusion order which carried a liability for a fine of $5,500 and/or 12 months' imprisonment. 41 Mr Craze also gave evidence that, while waiting for the Security Duty Manager to arrive, he would arrange for photographs to be taken of the patron and take the person through the form of application for a voluntary exclusion order. 42 His usual practice was to give the patron an "exclusion pack" and to tell the person what was contained in it. He said that he provided the exclusion pack to Mr Foroughi which included brochures with details of counselling services, the business card of Ms Virginia Baker and a copy of the voluntary exclusion order. 43 Mr Craze stated that it was common for patrons to ask how Star City would be able to exclude them. He said that if he was asked, his practice was to respond as follows: "We have a lot of cameras on the gaming floor and on site. We now have your photo. We have an excellent Surveillance Department who are very good at their job and will make every effort to make sure you don't re-enter or stay on the gaming floor. In saying that, it is your responsibility not to re-enter the Casino. If you are caught, the Casino may revoke your voluntary exclusion order and issue a Casino exclusion order where you may incur a $5,500 fine or 12 months' imprisonment. It is not only our responsibility to ensure that you don't come in here, it's yours as well."

44 Mr Mackay's evidence of his usual practice was that he took the patron through the application form and asked whether the patron understood it. He would then ask the patron a number of questions to satisfy himself that the person understood the order. 45 Prior to making the exclusion order, Mr Mackay would then say to the patron: "Do you understand what this will mean? You can't come back into the Casino. You can't enter any area where there is a security guard standing at an entrance. We don't want to stop you from going to the restaurants or theatres. If you want to go to a restaurant that is okay but don't go pass [sic] any security officer to get there. Also, if you receive any letter or promotional material from Star City you have to disregard that.

This is a voluntary exclusion order. We are happy to do this for you but you have to respect the process and not do anything to breach the order. You must stay away and you must take steps to sort yourself out. The casino is here for people's entertainment and we don't want to see people here who can't afford to be here. If you do come back in we may issue an involuntary exclusion order which is more serious for you and may lead to a fine if you breach it."

46 Mr Malcolm Harding, who was at the relevant time a Security Officer in the employ of Star City, escorted Mr Foroughi from the casino after the voluntary exclusion order was made. He has no independent recollection of doing so. 47 Mr Harding could not recall saying to Mr Foroughi that "we will catch you if you come" to the casino. However, his sworn evidence was that he would not say such words. His usual practice was to say that the casino would try to stop the patron from coming back and that if the patron was recognised on the floor and found to be frequently re-entering, he or she may be issued with a non-voluntary exclusion order which carried a fine if it was breached. 48 Messrs Craze, Mackay and Harding were all cross-examined to similar effect about their evidence of usual practice. It was put to them that the only basis for their denials of the representations made by Mr Foroughi was that it was inconsistent with their usual practice. It was also suggested to them that they had no recollection of whether or when they departed from the usual practice. Findings on credit of Mr Foroughi 49 I reject Mr Foroughi's evidence of the representations which he alleges to have been made to him. There are five principal reasons why I make this finding. 50 First, I accept the evidence of Messrs Craze, Mackay and Harding who all impressed me as witnesses of truth. Although their denials of Mr Foroughi's claims were all based on evidence of their usual practice, nothing was put to them to suggest why they did not (or would not) follow their usual practice in this case. I accept Mr Mackay's evidence notwithstanding Mr Laughton's criticism of him as a dogmatic witness. 51 Second, the evidence of Mr Foroughi's own expert witness, Mr Colquhoun, was that his psychological testing indicated that Mr Foroughi had a tendency to exaggerate his complaints. 52 Third, Mr Foroughi's evidence reveals that he has told a number of untruths to government bodies and to relatives and friends. He admitted that he lied to the Australian Tax Office in his tax returns as to the disclosure of his true income. He received a Centrelink Newstart allowance in 2005 by claiming he was unemployed, whereas in truth he was conducting his painting and decorating business at that time. He also admitted lying to his wife and friends to obtain money to gamble. 53 Fourth, he denied in cross-examination that he went back to the casino shortly after 18 May 2004 to see if he would be detected, despite that proposition being taken directly from his affidavit. When the relevant paragraph of the affidavit was drawn to his attention he retracted his denial. 54 Fifth, he denied that he told Professor Blaszczynski, a clinical psychologist, various things in his interview with the Professor notwithstanding Professor Blaszczynski's sworn evidence to the contrary. I accept Professor Blaszczynski's evidence without hesitation. 55 The finding I make in relation to the whole of Mr Foroughi's evidence is that I cannot accept it, other than where it is corroborated by evidence tendered by Star City, or by contemporaneous documentary evidence, or where it contains admissions against his interest. Star City's evidence of systems to detect excluded patrons 56 Star City gave extensive evidence of the systems it had in place to detect excluded patrons. The evidence was given by Messrs Mackay and Harding and in particular by Ms Baker and Mr Clark, the casino's Surveillance Manager, as well as by Mr Lorraway who was the Security Manager from 2001 to May 2005. 57 This evidence was not challenged by counsel for Mr Foroughi. The gravamen of the attack made on the systems by Mr Foroughi's counsel was that they were inadequate because they should have provided, inter alia, for card entry or facial recognition technology and for Mr Foroughi's photo to be placed on a hot list as soon as the voluntary exclusion order was made. 58 I do not propose to set out Star City's systems in any detail but I will deal with them briefly. 59 In considering the evidence, it is necessary to bear in mind the size of the casino and the large volume of its patronage. The casino is licensed to have 200 gaming tables and 1500 electronic gaming machines. The gaming areas include the main gaming floor and a private gaming room. The Casino Control Act requires that the main gaming floor be open to eligible members of the public 24 hours a day, 365 days a year. 60 In 2003/2004, approximately 9.03 million patrons entered the casino. In 2004/2005, approximately 8.72 million patrons were admitted. 61 In 2003/2004, 490 exclusion orders were issued by Star City, of which 186 were voluntary exclusion orders. In 2004/2005, Star City issued 504 exclusion orders, of which 163 were voluntary exclusion orders. 62 In 2004/2005, Star City had in place approximately 4,000 current exclusion orders, of which over 1,000 were voluntary exclusion orders. 63 Star City has two departments that are involved in the identification of excluded persons. They are the Security Department and the Surveillance Department. The Surveillance Department is primarily responsible for detection but Security Department staff may also identify excluded persons. Only senior security staff are permitted to be involved in the voluntary exclusion order process. Staff are provided with on-the-job training and are required to practise the procedures. All of these safeguards were in place at the time when Mr Foroughi's order was made. 64 Clearly enough, some staff are particularly good at recognising and detecting excluded patrons whereas others are not as good at this task. It was evident to me that Mr Bujaroski is particularly skilled at identifying such persons. 65 Prior to November 2004, the Surveillance Department had a database of exclusion orders known as "EASI". That system was replaced by a new purpose-built database introduced in November 2004 known as "CID". 66 Surveillance operators are required to familiarise themselves with photographs of excluded patrons on the database. In addition, the Security Department maintains a register of excluded patrons, with approximately 200 lever arch folders of documentation relating to excluded patrons. 67 From about late 2003 or early 2004, Mr Clark introduced a "hot list" of excluded patrons. The list was issued monthly by the Surveillance Department and identified ten excluded patrons who Star City was aware were trying to re-enter the casino. 68 Figures provided by Star City to the Casino Control Authority indicate some measure of success in detecting excluded patrons. Mr Clark set out the figures in a convenient table which I reproduce as follows: Year Number of detected excluded patrons Number of occasions Number of self-excluded patrons detected Number of occasions 2002/2003 419 492 245 305 2003/2004 352 402 206 247 2004/2005 364 426 202 246

69 Mr Clark accepted that it was possible for excluded patrons to re-enter the casino. He said that memorising every excluded person's face was not possible. However, he said that Star City employees did regularly detect excluded patrons. This is borne out by the table reproduced above. Also, Mr Lorraway recalls that security officers and surveillance operators detected excluded persons on an almost daily basis. The legislation 70 One of the primary objects of the Casino Control Act is to contain and control the potential of a casino to cause harm to the public interest and to individuals and families: see s 4A(1)(c). 71 Provision is made in Part 3 for the Casino Control Authority to conduct regular investigations of a casino operator's suitability to maintain its licence. The Casino Control Authority is required to conduct triennial investigations, and to form an opinion as to whether or not: · the casino operator is a suitable person to continue to give effect to the licence and the provisions of the Casino Control Act; and · it is in the public interest that the casino licence should continue in force: s 31(1). 72 Part 5 of the Casino Control Act deals with the operation of a casino. Provision is made in s 79 for the Casino Control Authority or the casino operator to exclude persons from a casino. 73 Section 79(1) of the Casino Control Act deals with non-voluntary exclusion orders. Section 79(3) deals with voluntary exclusion orders. Those sub-sections are as follows: "(1) The Authority or the casino operator or the person for the time being in charge of the casino may, by order given to a person verbally or in writing, prohibit the person from entering or remaining in a casino. …

(3) The Authority or the casino operator may give a written order under this section to a person, on the person's voluntary application, prohibiting the person from entering or remaining in a casino. The application must be in writing and the person's signature on it must be witnessed in a manner determined by the Authority." 74 Section 80 of the Casino Control Act provides for a person who is given an exclusion order to be able to apply to the Casino Control Authority for a review of the order. No such application may be made where the order was given by the Casino Control Authority or at the direction of the Commissioner of Police: s 80(1). 75 An exclusion order remains in force until it is revoked by the person who gave the order: s 82(1). 76 It is a condition of a casino licence that the casino operator must, on each day that gaming is conducted at the casino, prepare a list of names of excluded persons: s 83(1). It is also a condition of the licence that the casino provide an inspector on duty in the casino with a copy of the list of excluded persons and notify the inspector of the making or revocation of an order: s 83(2). 77 It is an offence for a person who is the subject of a non-voluntary exclusion order to enter or remain in the casino to which the order relates. The offence carries a maximum penalty of a $5,500 fine or 12 months' imprisonment or both. It is not an offence for a person who is the subject of a voluntary exclusion order to enter or remain in the casino: s 84(1). 78 Although it is not an offence for a person who is the subject of a voluntary exclusion order under s 79(3) to enter the casino, the casino operator, or other persons referred to in s 85(1), may remove the excluded person from the casino. Section 85 is in the following terms:

85 Removal of excluded person from casino (1) This section applies to the following persons in a casino: (a) the person for the time being in charge of the casino, (b) an agent of the casino operator, (c) a casino employee. (2) A person to whom this section applies must, as soon as practicable after it becomes known to the person that a person the subject of an exclusion order (including an exclusion order given on the voluntary application of a person under section 79(3)) is in the casino, notify an inspector, and then remove the person, or cause the person to be removed, from the casino. Maximum penalty: 20 penalty units. (3) It is lawful for a person to whom this section applies, using no more force than is reasonable in the circumstances: (a) to prevent a person the subject of an exclusion order from entering the casino, and (b) to remove such a person from the casino or cause such a person to be removed from the casino. 79 Part 8 of the Casino Control Act provides for a casino duty to be paid to the Casino Control Authority on each casino licence: s 114(1). It also provides for the payment of a responsible gambling levy on each such licence: s 115(1). 80 The levies paid under s 115 are to be paid by the casino into a Responsible Gaming Fund. The moneys are required to be dealt with under a trust deed containing provisions approved by the Minister for Gaming and Racing relating to the expenditure of the money for purposes related to responsible gambling: s 115(5) and (6). Misleading conduct 81 It follows from my rejection of Mr Foroughi's evidence and my acceptance of the evidence of Messrs Craze, Mackay and Harding that the claim of misleading conduct under s 52 of the Trade Practices Act fails. It is unnecessary for me to say anything further about this cause of action but I will make three additional observations. 82 First, Mr Craze's incident report contains contemporaneous documentary evidence to support the finding that the exclusion order was explained to Mr Foroughi. The incident report indicates that the exclusion process took 35 minutes, of which Mr Mackay was present for approximately 15 minutes. This reinforces the view I have reached that the explanation given by Mr Craze and Mr Mackay was thorough and detailed. 83 Second, Mr Foroughi accepted that Mr Mackay's usual procedure was followed. The lengthy passage of the transcript which I have reproduced at [34] was taken from Mr Mackay's affidavit. Mr Foroughi agreed with each of the propositions put to him. 84 Third, Mr Foroughi claimed in his oral evidence that he was told by a staff member that penalties, including the possibility of a gaol sentence, attached to a breach of the voluntary exclusion order. In fact, no criminal penalties attached to a contravention of such an order (only to the contravention of a casino exclusion order). It is therefore unlikely that any responsible staff member such as Mr Craze, Mr Mackay or Mr Harding would have made that statement. Reliance 85 It is plain from Mr Foroughi's own evidence in chief that he placed no reliance on any representation he claims to have been made to him. The evidence set out at [15] above makes it quite clear that he went back to the casino to test the exclusion order. When he was not detected, he remained in the casino and returned on other occasions. 86 Mr Foroughi's counsel submitted that the effect of his evidence was that he expected to be excluded. I do not consider that this correctly conveys the substance of Mr Foroughi's evidence. But even if it does, in my view, any reliance ended as soon as Mr Foroughi entered the gaming areas and commenced gambling. Reasonable grounds 87 The representations alleged by Mr Foroughi were both as to future matters: see s 51A of the Trade Practices Act. Since I have come to the view that the representations were not made I do not need to address the question of reasonable grounds. Nevertheless, I will do so briefly. 88 Star City's evidence of the systems it had in place to detect excluded patrons and its evidence of the size of the casino and volume of patronage, shows that there was no guarantee that excluded patrons would be detected. Mr Clark accepted that this was so. 89 It follows that if Star City had represented to Mr Foroughi that it would be able to detect him in the event he entered the casino, it would not have had reasonable grounds for the representation. In my opinion, the evidence shows that Star City would have had reasonable grounds if it had an intention to place Mr Foroughi's name and photo immediately on a hot list, but that was not part of the system in place. The hot list was only used in case of repeat violations or other problems. 90 However, in my view, there would have been reasonable grounds for the alleged representation that Star City would remove Mr Foroughi from the casino as soon as practicable after it knew that he was present. This is borne out by the evidence of the number of security cameras, the role of the Surveillance and Security Departments and Mr Clark's table which evidences some measure of success in detecting excluded patrons. Mr Lorraway's evidence was to similar effect. Trade or commerce 91 In its defence, Star City claimed that even if the alleged representations were made, they were not in trade or commerce. It would follow that s 52 of the Trade Practices Act could not have been engaged. 92 The High Court observed in Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 at 602-604 that s 52 was not intended to extend to all conduct in which a corporation may engage in the course of, or for the purposes of, its trading or commercial business. 93 Section 52 of the Trade Practices Act is concerned with the conduct of a corporation towards persons with whom the corporation has or may have dealings, in the course of those activities which bear a trading or commercial character: see Concrete Constructions at 604. 94 It is true, as the High Court said, that the dividing line may not always be clear and may require identification of what imports the requisite trading or commercial character to the impugned conduct. In the present case, the point was not fully argued and accordingly I do not propose to express a concluded view on this question. Statutory duty 95 The claim for breach of statutory duty under s 85 of the Casino Control Act was not argued at the hearing. In any event, the legislative history and the case law indicate that the intention of the Casino Control Act was not to confer a private right of action for damages on problem gamblers who may enter a casino in breach of an exclusion order. 96 The enactment of the Casino Control Act was preceded by an inquiry into the Establishment and Operation of Legal Casinos in New South Wales conducted by Sir Lawrence Street. Sir Lawrence's recommendations were adopted when the Casino Control Bill was introduced by the Minister; see Second Reading Speech, 5 March 1992, Legislative Assembly, pp 513, 514 and 516. 97 Sir Lawrence said in plain terms that the provisions dealing with exclusion orders should not include a requirement that a casino be required by law to exclude persons whose gambling appeared to be out of control. He considered that this may be seen as creating a statutory duty with a correlative right of action upon the gambler to sue the casino for damages, which he rejected. These comments applied in equal terms to voluntary and non-voluntary exclusion orders: see the report of the Hon. Sir Lawrence Street AC KCMG, "Inquiry into the Establishment and Operation of Legal Casinos in New South Wales" (27 November 1991) at [4.6.6] to [4.6.10] ("the Street Report"). 98 Moreover, in Preston v Star City Pty Ltd [1999] NSWSC 1273 at [87], Wood CJ in Common Law referred to the Street Report to support the view that the requisite legislative intention to confer a private right of action was not to be found in the Casino Control Act. 99 Prestonwas not concerned with a breach of s 85 of the Casino Control Act, which was pleaded in the present case. Nevertheless, his Honour's remarks at [87] were directed at the establishment of the regulatory scheme as a whole. He said that the Street Report and the Second Reading Speech point towards "the establishment of the regulatory scheme as the means of addressing the negative aspects of legalised gambling." He continued by saying: "There is nothing in that material, or in the Act itself, to suggest that there should be a private right of action additional to the obligations imposed upon casino operators." 100 Even if a private right of action exists against Star City, no such cause of action was established in the present case. In Rixon v Star City Pty Ltd [2001] NSWCA 265, Sheller JA (with whom Priestley and Heydon JJA agreed) said that s 85(2) of the Casino Control Act combines two prerequisites of knowledge on the part of the casino operator, or other person to whom the section applies. 101 These requirements are, first, knowledge that a particular person is in the casino, and, second, knowledge that the person is the subject of an exclusion order: see Rixon at [33]. 102 Here, with the exception of the two occasions on which Mr Foroughi was detected in the casino in early 2006, the evidence disclosed only one occasion on which Mr Foroughi was present in the casino to the knowledge of Star City, after the exclusion order was made. That was on 16 December 2005 when he said he was offered admission to the high rollers' facilities. 103 Mr Foroughi was not challenged on that evidence, although the reliability of his evidence as to the actual dates of entry stated in Mr Foroughi's schedule were put directly in issue by Star City. 104 I am not bound to accept Mr Foroughi's evidence of what took place on 16 December 2005 even though it was unchallenged in cross-examination; Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 at 586-588. I reiterate what I have said about Mr Foroughi's credit. But even on his version of what took place on that day, the evidence does not establish that Star City knew that Mr Foroughi was gambling in the casino in breach of the terms of his voluntary exclusion order. Thus, s 85 would not have been engaged. Whether Mr Foroughi is a pathological gambler 105 Mr Foroughi called evidence from Mr Ross Colquhoun, a clinical psychologist, to support his case. Mr Colquhoun saw Mr Foroughi on 2 and 9 November 2006 and, with the assistance of a colleague, took a history and administered a series of psychological tests. 106 Mr Colquhoun concluded that Mr Foroughi met the diagnostic criteria for pathological gambling stipulated in the Diagnostic and Statistical Manual of Mental Disorders (4th ed text revision, American Psychiatric Association Washington, 2000) ("DSM‑IV"). 107 Mr Colquhoun went on to say that the essential feature of pathological gambling is persistent and recurrent maladaptive gambling behaviour that negatively affects personal, family and vocational functioning. In his view, Mr Foroughi suffers from this disorder, which he said is synonymous with other addictions. He stated that neuroscientific evidence indicates that, over time, pathological gamblers suffer from long-lasting structural changes to the brain with reduced capacity to make rational decisions to cease gambling. 108 Star City's expert psychologist, Professor Blaszczynski was, until recently, the Head of the Department of Medical Psychology at Westmead Hospital. Since December 2006 he has been a full time academic, holding the Chair in Psychology at the University of Sydney. His curriculum vitae reveals a high level of specialised knowledge in the area of problem gambling in which he has written and worked extensively. 109 Professor Blaszczynski agreed that the essential feature of pathological gambling is persistent and recurrent maladaptive gambling behaviour. He also agreed that Mr Foroughi demonstrated five of the ten diagnostic criteria for pathological gambling under DSM-IV, a number consistent with the disorder's diagnosis. 110 Although Mr Foroughi met five of the formal criteria stated in DSM-IV, Professor Blaszczynski expressed the clinical opinion that he is more correctly described as a problem gambler than a pathological gambler. Professor Blaszczynski came to this view principally because Mr Foroughi did not exhibit an important feature accepted as indicating impaired control, namely repeated unsuccessful efforts to control, cut back or cease gambling. Professor Blaszczynski expanded on his views in a second report dated 21 August 2006. 111 In my view, Professor Blaszczynski's opinion is amply supported by the evidence. In particular: · Mr Foroughi agreed that he told Professor Blaszczynski that he did not make any repeated genuine or concerted efforts to address his gambling problem. · Mr Foroughi was given a package of information listing problem gambling services that were available at the time when the exclusion order was made yet he did not go to any of those services. · Mr Foroughi understood on 18 May 2004 that he was undertaking to the casino to seek the assistance of a qualified gambling counsellor but he did not do so. He accepted that, apart from seeking expert evidence for these proceedings, he did not seek the assistance of a recognised and qualified problem gambling counsellor. 112 Senior counsel for Mr Foroughi made a strenuous attack upon Professor Blaszczynski's evidence. He suggested that Professor Blaszczynski should have treated Mr Foroughi's prayers to cease gambling as indicating active steps to overcome his gambling problems. In my opinion, Professor Blaszczynski was correct to reject this suggestion. 113 Professor Blaszczynski concluded that Mr Foroughi's gambling was not motivated by a desire to escape problems or relieve dysphoric moods; his gambling was motivated by excitement and a desire to win, not to prevent or reduce distress or some dreaded event. 114 These conclusions were supported by statements made by Mr Foroughi to Professor Blaszczynski. In particular, Mr Foroughi told Professor Blaszczynski that he was motivated to gamble because he found the activity exciting and it provided him with an opportunity to win and recoup losses. 115 Professor Blaszczynski was an impressive witness and I accept his evidence in preference to the views of Mr Colquhoun. Whilst I thought Mr Colquhoun was doing his best to assist the Court, I have taken into account the relative experience and learning of both expert witnesses. 116 Professor Blaszczynski's curriculum vitae contains a compelling statement of his expertise. He has received awards for his contributions to research on pathological gambling, as well as a large number of grants to carry out studies in this field. He has also published widely in the area. 117 I reject Mr Laughton's attack on Professor Blaszczynski that "there is no evidence of the extent of his clinical experience." The Professor's curriculum vitae is ample testament to his clinical experience. 118 Indeed, Mr Colquhoun's experience in the field of problem gambling is relatively slight. He says his expertise is in "addictions generally" with a main focus on drugs and alcohol. There is little in his curriculum vitae that specifically relates to problem or pathological gambling. His experience appears to be limited to some work he did in the area of gambling for the Department of Corrective Services approximately 10 years ago and in oral evidence he stated: "I have seen a number of gamblers over time and treated them…and I've written a number of reports…mainly regarding the criminal activity attached to gambling." 119 Even if I were to accept that Mr Foroughi is a pathological gambler, Professor Blaszczynski's evidence is that such persons can exercise control and limit or cease gambling if they choose to do so. I accept this opinion which is supported by Mr Foroughi's own evidence that he felt able to keep away from the casino without professional assistance and, indeed, that he had been able to do so for a period of six months prior to seeing Mr Colquhoun. Negligence: No duty of care 120 The duty of care was not adequately pleaded, but the claim, as particularised, appears to be that the content of the duty was to detect and remove Mr Foroughi from the casino as soon as possible. Mr Foroughi's counsel submitted that the duty was to take reasonable steps to prevent an excluded person from entering the casino. 121 The question of whether a registered club owed a duty of care to a member who it knew, or ought to have known, to be a problem gambler, to protect the person against financial loss from gambling was considered by the NSW Court of Appeal in Reynolds v Katoomba RSL. The Court (Spigelman CJ, Powell and Giles JJA) was unanimous in holding that no such duty was owed. 122 Chief Justice Spigelman observed that, save in an extraordinary case, an example of which he was unable to conceive, economic loss occasioned by gambling should not be accepted to be a form of loss for which the law permits recovery. 123 In support of this view, his Honour pointed at [26] to authoritative statements of principle by the High Court in Perre v Apand Pty Limited (1999) 198 CLR 180 and Agar v Hyde (2000) 201 CLR 552 in which emphasis was placed, in the development of the law of negligence, on the acceptance by individuals of personal responsibility for their own actions. 124 Chief Justice Spigelman continued at [27] by stating that the Court should be slow to recognise a duty to prevent self-inflicted economic loss. He pointed out that this is especially so where the loss is suffered in gambling because such loss is an inherent risk of the activity and cannot be avoided. 125 The following paragraphs of the conclusion of Spigelman CJ are instructive and I will set them out in full: 47 The discussion of vulnerability in…Perre v Apand Pty Ltd…and the authorities cited therein, place considerable emphasis on the practical inability of the injured party to take steps to protect him or her or itself, whether because of ignorance of the risk or otherwise. There was no such practical inability in the present case. 48 It may well be that the appellant found it difficult, even impossible, to control his urge to continue gambling beyond the point of prudence. However, there was nothing which prevented him staying away from the club. The suggested duty on the club to advise him to resign his membership emphasises the point. He could have resigned at any time. The requests to refuse to cash cheques when asked, did not shift his personal responsibility for his own actions to the club. There was no reason for the club to honour one request rather than the other. 49 In my opinion this combination of circumstances is such that no duty of care was owed of the character for which the appellant contended. The risks were obvious. As Gleeson CJ said with respect to the analogous situation of a participant in sport: "The only way to avoid risk of injury is not to play" (Agar v Hydeat 563 [18].) The Appellant must accept responsibility for his own actions. There was no duty of care. There was no unconscionable conduct. The appeal should be dismissed with costs." 126 In Reynolds v Katoomba RSL, the Court refused to recognise a duty of care notwithstanding the trial judge's finding that the club knew that the plaintiff and his father had asked the club to prevent him from gambling to excess, in particular by refusing to cash cheques: see at [4] - [6], [44] and [49]. 127 In my view the present claim is indistinguishable from the decision of the Court of Appeal in Reynolds v Katoomba RSL which I respectfully follow. While it is true that the question of whether a duty of care exists must depend on all the circumstances of the case, the claimed duty in the present proceedings is on an even weaker foundation than that which was relied upon by the plaintiff in Reynolds v Katoomba RSL. 128 Here, Mr Foroughi expressly and voluntarily undertook responsibility for his own conduct in agreeing not to enter the gaming areas of Star City and to seek assistance and guidance of a qualified and recognised counsellor. 129 More recent authority does not assist Mr Foroughi's claim. In Preston v Star City Pty Limited (No 3) [2005] NSWSC 1223, Hoeben J permitted a claim in negligence to proceed to trial because the allegations went beyond those made in Reynolds v Katoomba RSL. The claim was that Star City knew of the plaintiff's problem and actively encouraged and exploited it. No such claim is made in the present proceedings. 130 Nor does recent American authority to which I was referred by Star City's counsel assist Mr Foroughi's claim. I do not propose to refer to it in my reasons. No breach of any duty of care 131 Since I have come to the view that Star City did not owe Mr Foroughi a duty of care, it is unnecessary to deal with the question of breach. However, I will address it briefly. 132 I set out above the principal parts of the evidence of Star City's systems for detection of excluded patrons. I accept that evidence. 133 The gravamen of Mr Foroughi's attack on the adequacy of the systems was that Star City should have put in place a card entry or facial recognition system or a longer hot list. 134 The effect of Star City's evidence was that facial recognition technology is not sufficiently accurate or suitable for use in casinos. This evidence is found in the affidavits of Mr Clark and Mr Lorraway. Evidence of Ms Russell is to the same effect. 135 The evidence of Mr Clark and Mr Lorraway on the issue of personal identification measures is that they are unsuitable for use in casinos. Mr Mackay's evidence under cross-examination on this topic was to the same effect as that of Messrs Clark and Lorraway. 136 Mr Lorraway also gave evidence that the hot list is limited to ten persons so as not to dilute its effectiveness as a tool in the detection of excluded persons 137 I accept Star City's evidence of the adequacy of these measures. However, it is necessary to mention one caveat. This is, that as Mr Lorraway observed in his evidence, the Casino Control Authority in its 2003 report under s 31 of the Casino Control Act was critical of limitations of a system that relies on human beings to detect excluded persons. 138 As Mr Lorraway pointed out, the Casino Control Authority Report of 2003 did not recommend any changes to Star City's system at that time. It is not for me to find otherwise on the evidence in these proceedings. That is not to say that in the light of more recent developments in technology, more effective measures may or may not be appropriate. That question is one for the regulatory authority. Unconscionable Conduct 139 The claim of unconscionable conduct under ss 51AA and/or 51AB of the Trade Practices Act was not properly pleaded. However, senior counsel for Mr Foroughi conceded that the claim was based on the same matters as are the subject of the claim for misleading conduct. Reference was made in Mr Foroughi's written submissions to well-known authorities including Commercial Bank of Australia Ltd v Amadio and Anor (1983) 151 CLR 447. 140 I do not consider that Mr Foroughi was under any special disability. Nor do I consider that Star City took advantage of him within the well-known statements of principle in Amadio. The findings I have made about the circumstances in which the exclusion order was made are quite inconsistent with any suggestion of unconscionable conduct. 141 The present case bears no resemblance to the factual findings made by Judge Naughton in American Express International v Famularo (unreported, District Court of NSW, Norton DCJ, 19 February 2001). In any event, Powell JA doubted the correctness of that decision in Reynolds v Katoomba RSL at [115]. Contract 142 The only contract in place is to be found in Mr Foroughi's application for the exclusion order, which was made in consideration for Mr Foroughi's personal undertakings. The terms included those set out in the application in which Mr Foroughi recognised that it was his responsibility not to enter or gamble within the gaming areas. 143 Mr Foroughi breached the terms of his undertakings set out in the application for an exclusion order. Even if there were a term of the contract under which Star City agreed to take reasonable steps to apprehend and remove Mr Foroughi, I do not consider that Star City was in breach of it. Loss 144 Any loss suffered by Mr Foroughi was caused, not by Star City, but by Mr Foroughi's deliberate and voluntary conduct in entering the casino and gambling in breach of his written undertakings. Quantum 145 Even if Mr Foroughi had succeeded on any of the causes of action, he did not put forward any reliable evidence of his losses. 146 He gave a number of inconsistent statements of the calculation of his losses and, except for two amounts totalling $900, he failed to include any winnings in his calculations. Bank withdrawal slips put to him in cross-examination demonstrated that he could not have been present at the casino at some of the times set out in his schedule of losses. 147 Mr Foroughi's method of calculation of his loss was to say that all substantial cash withdrawals from his bank account represented gambling losses. However, it is plain that he used at least some of these funds to pay sub-contractors in the course of his business. Also, it appears he spent $500 to $1,000 a week, presumably in cash, in the pursuit of a somewhat decadent lifestyle. 148 Moreover, his tax returns disclosed negligible income whereas he claimed to have lost over $600,000 gambling at the casino in less than two years. 149 For these reasons, I cannot accept Mr Foroughi's evidence of the losses said to have been sustained by him. Conclusion and orders 150 All of Mr Foroughi's causes of action fail. In the ordinary case, a gambler who enters a casino in breach of a voluntary exclusion order and suffers losses will have no redress in the form of a damages claim against the casino. That is not to say that the casino does not have some obligation to try to detect such persons and remove them. However, the question of what measures the casino should have in place is, essentially, a matter for the Casino Control Authority. 151 The orders I will make are that the application be dismissed with costs. Star City agreed not to pursue its cross-claim against Mr Foroughi. Accordingly, I will order that the cross-claim be dismissed, and I will not make any order as to its costs. I certify that the preceding one hundred and fifty-one (151) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

Dated: 27 September 2007 Counsel for the Applicant: Mr G Laughton SC and Mr A M Gruzman

Solicitor for the Applicant: DiLizio & Associates

Counsel for the Respondent: Mr I Jackman SC and Ms K Rees

Solicitor for the Respondent: Mallesons Stephen Jacques