No "special disadvantage" established
485 Unconscionable conduct, for the purposes of s 20 and the unwritten law, occurs in circumstances where a plaintiff or applicant is in a position of "special disadvantage": see Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd [2003] HCA 18; 214 CLR 51 at [8]-[9], [13]-[14] (Gleeson CJ). Whether that disadvantage be described as "situational" or "constitutional" (see the discussion, and slight doubting, by Gleeson CJ in Berbatis at [9]-[10] of the usefulness of such categories), the adjective "special" is not to be ignored. One purpose of the adjective is to make clear that inequality of bargaining power is not enough: see Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; 151 CLR 447 at 462 per Mason J, and Berbatis at [12] per Gleeson CJ. Rather, as Mason J put it in Amadio, at 462, the "the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests".
486 In some authorities, perhaps mostly earlier ones, the characteristic is called a "special disability". Deane J in particular seemed to favour this phrase: see Louth v Diprose [1992] HCA 61; 175 CLR 621 at 638, and Amadio at 474. In Louth, the special disability or disadvantage was the extreme infatuation of the plaintiff with the defendant: that is, it was an emotional condition. Whatever the characteristic (and there are no rigid categories):
the nature of the relevant disadvantage concerns the ability of the weaker, or victimised, party, to make an informed judgment as to his or her interests: Bridgewater v Leahy [1998] HCA 66; 194 CLR 457 at [39] (Gleeson CJ and Callinan J); and
the essence of such weakness is that the party is unable to judge for himself: Blomley v Ryan (1956) 99 CLR 362 at 381, 392 (McTiernan J).
487 It is the exploitation of the disadvantage or weakness by the defendant or respondent that causes equity to intervene: see Louth at 626, 630-631 (Brennan J), 637 (Deane J), 654 (Toohey J, in dissent on the outcome but not on the principles); Blomley v Ryan at 405 (Fullagar J).
488 In Louth at 631, Brennan J also referred to a number of earlier cases where the distinction was drawn between a special disadvantage or disability, and the plaintiff's foolishness, recklessness, unreasonableness or improvidence, none of which will suffice to justify equity intervening to interfere with a bargain struck.
489 The last point is worth emphasising for a different purpose: the whole point of an equitable claim of unconscionable conduct is to allow a court to relieve a person of an obligation assumed, or to deprive a defendant or respondent of a benefit gained (or to restrain either of those things occurring in the future), because of the circumstances in which the transaction, or proposed transaction is occurring. By its orders, a Court interferes in a legal relationship between parties. The Court does not engage in some general course of disapproval: its judicial power is exercised to secure an outcome in the context of a real, not hypothetical relationship between a person or group of persons with a special disadvantage and the person or persons who seek to exploit that disadvantage. In Louth at 638, Deane J put it this way (Dawson, Gaudron and McHugh JJ agreeing):
The intervention of equity is not merely to relieve the plaintiff from the consequences of his own foolishness. It is to prevent his victimization.
(Footnote omitted.)
490 Even in the absence of any authority, there may be a real difficulty in how these principles apply to a person who has difficulty controlling her or his gambling activities.
491 That is because, on the evidence of Professors Ladouceur and Nower, which I accept, even individuals suffering from a diagnosed gambling disorder maintain the ability to perform voluntary acts and make judgements in their own best interest when putting themselves in a position to use, and in using, EGMs. It is worthwhile reproducing the whole of the answer of the two professors to Questions 8 and 9 of the joint report.
492 The questions were:
To what extent does a person who is "habituated" or "addicted" or is suffering from a "gambling disorder":
Question 8: Perform a voluntary act or acts when putting herself in a position to play, and playing, an EGM? ; &
Question 9: maintain an ability to make judgements as to her own best interests when putting herself in a position to play, and playing, an EGM?
493 Their answer was:
In our opinion, individuals suffering from gambling disorder maintain the ability to perform voluntary acts and to make judgements in their own best interests when putting themselves in a position to play and playing EGMs. Gamblers make a long and complex series of decisions when deciding to gamble: When to gamble, with whom to gamble, where to get cash, whether to use credit, how to get to the venue, what activities to play, whether to play machines and which machines, how many lines to play, when to cash out or reinvest, how to obtain extra cash if necessary to continue play, how to meet biological needs including eating or drinking during play, etc. All of these decisions involve voluntary decision-making.
The demands of this decision-making become more complex, not less, as a gambler develops gambling-related problems. Disordered gamblers lie to friends and family to get money to gamble, request bailouts with inventive excuses, steal or misuse money, divert legitimate expenditures to funds for gambling, and engage in a wide range of behaviors that often require a great deal of ingenuity and forethought. Unlike with drugs and alcohol, gamblers are usually able, through their resourcefulness, to hide the effects of their gambling from friends and family until many or most of the assets are gone. Despite excessive levels of play, then, problem gamblers remain able to make judgments that they believe to be in their own best interests and perform a series of voluntary acts to prolong play. [Nower report, s13.1, p. 20]. In this case, there was educational material available to the Applicant that explained terms like "return to player" and "random number generator," detailed the statistical odds of winning, the way machines work, and methods for checking actual wins and losses during play, then clearly stated: "In the end, the machine will win." A player would have to make a volitional choice to ignore these materials as well as the warnings they contain to persist in spending money they knew or should have known they would lose in order to continue playing. The fact that gamblers often choose to make bad judgements does not detract from their ability to do so [Ladouceur report, s80, p. 36].
494 I infer the last sentence is intended to mean "does not detract from their ability to make judgements".
495 Herein lies the real difficulty for the applicant, in fitting her arguments within the concept of special disadvantage (in the case as she has chosen to present it): whatever level of dysfunction is selected (a gambling "problem", an inability to control gambling, the recognised psychiatric condition of a gambling disorder), to prove that across the spectrum of a widely defined group of individuals (all with their own strengths and weaknesses, and different personal, financial and living circumstances) that group should be determined to have no capacity to make judgements for themselves, is a significant challenge indeed.
496 For similar reasons to those I expressed in relation to the s 18 case, the applicant's evidentiary case falls well short.
497 For the applicant to contend, as she does in her closing submissions that the Vulnerable Players' "ability to make decisions in their own best interests, or to exercise control, is impaired" does not approach satisfaction of the concept of special disadvantage. A person who is reckless may well have an impaired ability to control herself or himself: indeed, such a lack of ability might be inherent in describing a person as reckless.
498 In her closing submissions, the applicant selected the following passages from the evidence of the lay witnesses, in support of her contention about the impaired control "Vulnerable Players" experienced:
366. The lay evidence adduced by the applicant also supports the above notion of impaired control.
(a) Shonica Guy said that "I would often feel like I could anticipate when the machine was about to pay", and that "[t]he longer I stayed on a machine, the more sure I would feel that it was due to pay out. I would enter a zone and focus on the game that I was on. I would not think of much else. Occasionally my mind would wander to the other things I should be doing such as my work commitments as l would often gamble during work hours". She said that "i]n about 2009 I could not work out why I could not stop".
(b) Conny McLaughlin said that when she played the pokies she felt like she was "escaping the mundane troubles in my life. I didn't have to think about my life when at a machine. Nothing went through my head while I played except the machine. I didn't have to worry about the husband, kids, work, bills or anything. Going to the pokie venue felt automatic. I just wanted to go all the time. Something in me wanted to go. I didn't think about stopping".
(c) Robert Ingmire said that "[w]hen playing on the pokies I felt like I was unaware of my surroundings. I felt almost as if I was hypnotised. Playing the machine became my complete focus. Money became meaningless and even the time needed to cash out any winnings felt inconvenient". Mr Ingmire said that "When I first started playing the pokies I would feel anticipation for a win. This positive feeling soon changed into a negative feeling. I would feel agitated, moody and angry when I had not played. I would be completely preoccupied with going to the pokies and this feeling would only stop when I started playing. At this point I would zone out and go numb".
(d) Anna Bardsley said that "I soon realised that I was incapable of sticking to a monetary limit when I gambled on poker machines. I always intended to stick to a limit, but was unable to do so". She said that "At the start of my day I would not have plans to go to a pokies venue but would often find myself at a venue later in the day. I would leave for appointments early to allow myself time to gamble or would attend venues on the way home. I felt that I was almost unable to drive past a signed poker machine venue. I would often make excuses to myself to justify entering venues such as needing to use their bathrooms or wanting a cup of coffee. On these occasions I would always end up using the pokies". She said that "I was drawn to the lights and sounds the machines emitted and found them to be spellbinding. I would zone out when using the machines. This allowed me some respite from the amount of stress I felt I was under in my personal life. I felt I deserved a break from the stress I felt under", and "I found the sounds and visuals of the machines soothing. I felt that I was searching for this. I recall that on hearing the jingles they played, I felt special. I felt like I was getting an adrenaline rush upon seeing the lights and sounds of poker machines and would feel agitated if I didn't play the poker machine". She said "I think that by the time I was hooked, I wasn't thinking properly".
(e) Libby Mitchell said that "I couldn't concentrate on dinner conversation because I was too absorbed in wanting to play the pokies. I lost the ability and desire to interact with others. I was gambling between five and seven days a week. By this time my mind was feeling very dislocated and knew I was acting very abnormally for me. That frightened me but I could not stop seeking poker machines. I sought them virtually daily". She said that "what attracted me to playing the games were the lights and sounds and near misses or 'almost wins'. I would often hear somebody say 'Oh how bad was that … just one off' for example".
(a) Catherine Sommerville said that "I was concerned about what I was doing, but I couldn't stop playing. Over the next few months, I used all my disposable money. At the end of the year I sold my car to finance my gambling. I also started pawning my possessions in order to have money for daily living expenses". She said that "I became absorbed in whatever machine I was playing while I played it. I was mesmerised by the ritual of playing: the images, sounds, lights and anticipation. It felt hypnotic" and that "I didn't get any particular pleasure from playing. I played to fulfil a compulsive imperative".
(Footnotes omitted).
499 As I have noted, the applicant did not prove, nor did she seek to prove, that any of these lay witnesses were, as individuals, the victims of unconscionable conduct by the respondents. None of the lay witnesses had anything approaching a sufficient relationship with Crown Casino, and the 38 Dolphin Treasure EGMs at the Casino, for proof of an unconscionable conduct case on their individual behalf to be possible.
500 I assume for my next finding, in the applicant's favour, that each of the lay witnesses could fit into that category, which itself is problematic because some no longer gamble at all, and have not done so for some time. Making that assumption, the evidence which I have set out at [498] can only be assessed as examples of the ways in which a "Vulnerable Player" may have, or may feel they have (not necessarily the same thing, certainly in the opinion of Professors Ladouceur and Nower), impaired control over their gambling behaviour, at least at certain times. Where that leaves the state of the evidence is in the hypothetical: it may or may not be the case, that some people who fit the description of "Vulnerable Players" do, at some times and in some circumstances, have a level (unknown) of impaired control over their gambling activities, and perhaps (but not necessarily) their gambling activities on a Dolphin Treasure EGM and perhaps (but not necessarily) on the machines situated on the floor at Crown Casino.
501 The state of the evidence cannot support any finding of the Vulnerable Players group having a special disadvantage.
502 In any case, as Aristocrat submits in reply, for the applicant to rely on Vulnerable Players having "impaired control" is beyond the applicant's case as it was initially drawn. The pleaded case concerns "habituated" gamblers, described as those who are "drawn to play the EGM regularly" and "unable to resist the temptation to do so", and "addicted" gamblers, or those who "play the EGM regularly and will spend his or her resources in doing so even when it is beyond that person's means to play so regularly," as well as those vulnerable to becoming so habituated or addicted. The concept of "impaired control" appeared to be used by the applicant in closing submissions in a broader and different way.
503 I have made those finding independently of any authorities. However, as the respondents submit, the authorities support this approach. Crown refers in its submissions to Giles JA's finding in Reynolds v Katoomba RSL All Services Club Ltd [2001] NSWCA 234; 53 NSWLR 43 at [149]:
As the course of the appellant's gambling shows, at some time a gambler can with assistance or by his own will cease to be a problem gambler, and when a problem gambler there is a range from relatively harmless, albeit undesirable, indulgence, to harmful over indulgence. … Control ultimately rests with the gambler, and society encourages the problem gambler to regain control. …
504 Similar observations were made by the High Court in Kakavas: see [20]-[26]. The fact that Kakavas concerned an individual "high roller" and this proceeding concerns a group of "Vulnerable Players" does not alter the applicability of the approach set out at [20]-[26]. The applicant sought to distinguish Kakavas on the basis that in Kakavas, there was no suggestion that Crown "ran a dishonest game", and that the transaction had been conducted "honestly". In contrast, in the present proceeding, the impugned features go to the very structure and rules of the game. I do not consider that has any bearing on whether special disadvantage is established.
505 If that is the state of the law in relation to those who have a demonstrable addiction or problem, this approach must apply with even greater force to a person or persons who are at the stage of being "vulnerable" to an addiction or a problem.
506 There may be less difficulty in applying the concept of special disadvantage to a specific person who meets the criteria for a gambling disorder under DSM-5. I say "may", because as Crown submits, and Professor Nower observed, with a clinical diagnosis of a behavioural disorder, reasonable clinical minds may differ on whether or not to make a diagnosis. Allowing for that qualification, at least with an identified individual who is in that kind of position, a Court can, through admissible evidence, determine for itself whether a person falls on the "special disadvantage" side of the equitable line, or on the "improvident or reckless" side of the line in engaging in gambling transactions with a service provider like Crown. However, the applicant's case is not confined in that way, and the applicant adduced no evidence concerning any individual who had such a diagnosis and who had used the Dolphin Treasure EGM at Crown Casino, let alone a person who had been affected by the features relied upon while doing so.