No Notice was given of the Role of the Verification Code and Caption
65 Lotteries relied on the general statement on the ticket that it was governed by the Public Lotteries Act and the Rules. That statement did not give the notice required by the rules themselves that would have made a verification code or caption determine that the ticket won or lost. It would have been simple to add in the play instruction for determining a win after "picture" the words "and caption" as well as words to the effect "and satisfies the confidential winning verification code in this ticket". If Lotteries' argument were correct, the game specification created a ticket with a set of play instructions that falsely represented the game because they treated the picture as including the caption, yet omitted this critical information from the face of the ticket. Thus, this argument does not assist Lotteries' in its refusal to pay the prize, even if the construction I have given to its power to employ a verification code or test in s 50 be wrong.
66 I am of opinion that if the caption or the verification code on the ticket overrode the result arrived at in the play instructions then, this instant lottery was conducted in contravention of rr 7(h)(i), 9(d)(i) and 22(a)(v) and s 8 of the Public Lotteries Act. This is because it did not give notice of the additional means that Lotteries proposed to use to determine if the prize on the ticket had been won namely, its use of the verification code or caption. The wording on the ticket did not give any hint that, even if the manner stated in the play instructions for determining that the holder had won the prize were followed, the ticket might not win because its verification code or the caption could produce a contrary result. Rules 7(h)(i), 9(d)(ii) and 22(a)(v) required the licensee, Lotteries, to give notice that a further, radically different, and conclusive means of determining the prize, contrary to or entirely omitted from the play instructions, governed the ticket.
67 In Reinhold v New South Wales Lotteries Corporation [2008] NSWSC 5 at [28] Barrett J held that although the Public Lotteries Act did not expressly cause the Rules to form part of a player's contract, the contract entered into on purchase of an 0z Lotto ticket did incorporate them. Here, the ticket stated that it was governed by the Rules. The question is whether that statement sufficed to incorporate them into the contract. In Brown v Petranker (1991) 22 NSWLR 717 at 722D-E Clarke JA, with whom Handley JA and Waddell AJA agreed, said of a rule excluding a newsagent from liability:
"The Court is not dealing with a contract freely negotiated between two parties. On the contrary, while it can be accepted for present purposes that upon the facts alleged by the respondent the appellants came under a duty which may be described as contractual to send the validated coupon to the Lotto offices, the relationship between the parties was governed by an Act of Parliament and rules passed thereunder which imposed the terms and conditions under which the duty arose. The question which arises is not the same as the one which arises in the construction of a written private agreement. In that instance the Court is concerned to ascertain the presumed intention of the parties from the written words. In the present case the Court is concerned with the proper interpretation of a rule passed pursuant to a rule making power contained in an Act of Parliament. Accordingly, the line of cases dealing with the effectiveness of exclusion clauses in contracts to exclude liability for negligence exemplified in Canada Steamship and discussed in Bright v Sampson and Duncan Enterprises Pty Ltd (1985) 1 NSWLR 346, especially at 359, 362-368, has no application."
68 However, here the Rules give effect to several purposes. One is to ensure that persons who play the game in the ticket know the terms on which the prize is won. Another is to give effect to securing the integrity of the conduct of the lottery and to prevent unintended payments. Moreover, Clarke JA made no reference to the binding norm of behaviour imposed on Lotteries by Pt V and in particular, ss 52 and 53 of the Trade Practices Act.
69 In an ordinary contractual relationship, if a ticket or other document is intended by the issuer to incorporate another document that contains terms of a contract, such as an exclusion clause or a foreign jurisdiction clause, the issuer cannot rely on those terms unless, at the time of the contract, it did all that was reasonably necessary to bring the terms to the other party's attention: Oceanic Sun Shipping Company Inc v Fay (1988) 165 CLR 197 at 228-229 per Brennan J; McRobertson, Miller Airline Services v Commissioner of State Taxation (WA) (1975) 133 CLR 125 at 137 per Stephen J, 143 per Jacobs; Sydney Corporation v West (1965) 114 CLR 481 at 485 per Barwick CJ and Taylor J, see too at 503 per Windeyer; eBay International AG v Creative Festival Entertainment (2006) 170 FCR 450 at 453 [19] per myself; cp Toll 219 CLRat 184 [55] distinguishing between cases where a contract is signed and "ticket" cases where the document is handed by one party to the other.
70 There was nothing to draw a player's or purchaser's attention to the actual existence or use of the caption or any verification test for the purpose of determining whether a prize was won in the Pictionary instant scratchie lottery. Neither was referred to expressly in the rules. Importantly, s 50(1) of the Public Lotteries Act gave the licensee a discretion to include a verification code. The section did not impose an obligation to use one. The Rules too did not in terms provide that the verification code had to be, or would be, applied, if the ticket did not specify that it would not be a winning one without that code confirming the win. While r 22(a)(vi) provided that a prize was not payable if the ticket failed a confidential security test, it did not make such a test apply where notice of it had not been included on the ticket in accordance with rr 7(h)(i), 9(d) and 22(a)(v). There was no evidence of any public advertisement that a verification code or the caption was the, or a, manner of determining the prize (cp: r 9(d)(ii)).
71 The game specification did not refer to a requirement that the caption match the word, or that the ticket also satisfy a verification code or test for a winning game. The game specification stipulated the play instructions that appear on the face of the reverse side of the ticket. While the game specifications referred to the category C pictorial symbols as being printed with captions, they did not make the captions a part of the pictorial symbol. The description of the pictorial symbols as being "with captions" was in contrast to the winning and non-winning game specifications. The latter two game specifications referred to the pictorial symbols alone as matching, or not, a word symbol. That was consistent with the play instructions.
72 Lotteries contended that it disclosed that the picture included the caption by using the examples of winning games. It asserted that it could not "seriously be suggested that Lotteries was required to state as much in words as well". I reject that argument. The examples did not negate the use of synonyms as matches or explain the asserted essentiality of the caption as a part of the matching. They could equally be an explanation or clarification of the picture so as to enable a person to determine whether the depicted thing matched the word. Lotteries created the potential for ambiguity in a consumer product by using synonymous concepts that were reasonably capable of matching. I am of opinion that if the caption were important, it could not have been omitted from the play instructions.
73 Lotteries also argued that the fact that the ticket "featured a verification code which confirmed that the [t]icket was a losing ticket (something that was apparent on its face) is irrelevant". If the role of the verification code were merely confirmatory, it missed its mark since the face of the ticket revealed a win. However, Lotteries sought to use the verification code not as a means of confirming the obvious, but as a means of determining what may not have been obvious at all. But it failed to identify that intended use of the verification code as a means of determining the winning status of a game.