Plaintiff v Defendants

Supreme Court of Victoria|2009-12-08|Before: HARPER J

EQUITY - Unconscionable conduct - Casino sued by a VIP gambler - Whether gambler subject to a special disability - Pathological or problem gambling - Casino's knowledge of any disability - Whether gambler's past diagnosis as a pathological gambler still applicable at the relevant time - Plaintiff's conduct, supported by expert opinion, in representing he had overcome his gambling problem - Ability to self-exclude - Whether unequal bargaining position between the parties - Whether a scheme to lure - Plaintiff's conduct in negotiating favourable terms - Effect of inducements - Alleged concealment of breach of Casino Control Act 1991 - Whether plaintiff demonstrated an ability to make decisions in his own best interests and to control his impulse to gamble - Effect of interstate exclusion order - Forfeiture of winnings - Attribution of knowledge - Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362 and ; applied ; adopted - (1999) 47 NSWLR 473 considered - , , , , , and - , s. 51AA.

1 The plaintiff, Harry Kakavas, was and is a problem gambler. Indeed, a diagnosis which I accept has him as a pathological gambler; and I also find that the first defendant, Crown Melbourne Ltd ("Crown") cannot divorce itself of some knowledge of his condition. Within weeks of the opening of the Casino in Melbourne on 30 June 1994, Crown had enrolled him as a patron. Less than five months later, however, on 29 November 1994, Crown had to write to him about bounced cheques totalling $47,500. He says - and I accept - that, during the negotiations that followed, he told Crown about his gambling problem. Shortly before that, on 10 November 1994, he had been interviewed by police and charged with defrauding a finance company, Esanda Finance Corporation Ltd, of $286,000. Crown came to know about that too, and to know also that he attributed his criminal conduct to a gambling addiction.

2 Crown was nevertheless sceptical. It believed that, although his love of a bet may have swayed Mr Kakavas' judgment at times, even to the point of criminality, his elevation of it to the status of an addiction was a mere pitch, calculated to gain the sympathy of the judge who sentenced him for the Esanda fraud. Nevertheless it was at Crown's suggestion, or at the least with Crown's active acquiescence that, on 8 November 1995, a year after being charged, Mr Kakavas took out a self-exclusion order. This is a simple process made available by the Casino Control Act 1991 by which patrons who wish to avoid the temptation to gamble may ban themselves from entering or gambling at a casino.

3 Crown was involved with Mr Kakavas and his gambling problem in other ways too. In July 1996, he became a patient of Dr J P Darmody, a psychologist nominated by Crown as specialising in the treatment of problem gamblers. Crown became aware of the patient/consultant relationship. Crown was involved, too, when on 23 January 1998, Mr Kakavas came up for sentence for defrauding the financier. But, consistently with its scepticism, Crown in a report prepared for the sentencing judge referred to Mr Kakavas' gambling only as something for which he had an "inclination".

4 Following his sentence, Mr Kakavas was imprisoned for four months. Almost immediately upon his release, he applied in writing to Crown to have his self-exclusion order revoked. By signing the form of application, he agreed (among other things) that he had not been encouraged to apply for revocation, that he had given the matter careful consideration, and that he would contact Crown immediately if he had any concern about its consequences. He put himself forward as a man untroubled by any gambling problems. And, as the evidence clearly shows, he continued to present to Crown in this way.

5 The application to resume gambling at Crown was supported by an expert opinion. Mr Timothy Watson-Munro, another of the psychologists who had treated Mr Kakavas, wrote to Crown on 3 June 1998. That letter stated, in effect, that the plaintiff had made so much progress in overcoming the gambling problems from which he had previously suffered that "he now feels ... that he now has both the insight and requisite behavioural skills to maintain his involvement at the Casino at no more than that of a recreational gambler." Moreover, as Mr Watson-Munro reported, he had taken Mr Kakavas carefully through the form of application to revoke the self exclusion order. The result, in the psychologist's opinion, was that his client had "a clear understanding of the relevant matters in that document and attendant to this, his duties and obligations to the Casino". Crown was entitled to accept this as true - which, I find, it did. It follows, then, that Crown was also entitled to act on Mr Kakavas' "authorisation" and "direction" (to use the terminology of the form of application) to revoke that order. This it did by letter dated 18 June 1998. On the same day, however, it told him that his licence to enter or remain on any part of Crown premises, whether the Casino or the Crown Towers Hotel or anywhere else, had been withdrawn.

6 Crown contends that its withdrawal of Mr Kakavas' licence to enter its premises had nothing to do with any concern that he was a problem gambler. According to Crown, that was not a consideration. Rather, the withdrawal of licence had everything to do with the fact that Mr Kakavas had by then been charged with another serious offence - armed robbery. If indeed this crime had been committed, its victim was both a tenant of Crown and a high roller patron of the Casino. In any event, the charge against Mr Kakavas was dismissed at the subsequent committal proceeding, and nothing further has come of it. As at June 1998, however, Crown had reason to fear that the alleged victim and one of the alleged perpetrators might meet on its premises. I find, therefore, that the withdrawal of licence was warranted. Despite Mr Kakavas' attempts, which he vigorously pursued until 2001, to have his licence restored, Crown did not finally give it back until January 2005. This was some five months before his return to the Casino as a patron - a return during which, over the following 14 months or so, Mr Kakavas turned over $1.479 billion (sic).

7 Mr Kakavas did more, in the period between June 1998 and the ending of his relationship with the Casino in August 2006, than merely present himself to Crown as a man whose gambling problems had been overcome. From about the year 2000 he also held himself out to the world as a very successful Gold Coast businessman who, in the years following his concentration on property development in Queensland, had managed seamlessly to combine the roles of real estate salesman and recreational gambler. And this picture had more than an element of truth. Admittedly, he had during this period self excluded from a number of casinos, and the police had intervened to exclude him from the Star City Casino in Sydney. But he attributed his self-exclusion from Burswood Casino in Perth to a disagreement with staff rather than to a gambling problem, and - it seems - did not broadcast the other exclusions. Crown nevertheless knew about at least some of them.

8 Despite his agreement to contact Crown with any concerns he might have about the revocation of his self-exclusion order, Mr Kakavas did not at any time before he recommenced gambling at the Casino suggest, or even hint, to Crown that he had any gambling problems. Indeed, for about three years following June 1998, he applied repeatedly to resume his patronage of the Casino; and when that failed, he applied for permission to enter the remaining areas within the Crown complex. This was at a time when he had independent reasons for wanting such permission. Auctions of real estate were conducted there, and Mr Kakavas - who was then a real estate consultant - had a commercial interest in attending them. Until January 2005, his requests were denied.

9 By the end of 2004, however, Crown's opposition to Mr Kakavas' attempts to return was wavering. Indeed, with the possible exception of one or two Crown executives, Crown then took the view that his return was to be encouraged. He was, to Crown's knowledge, a high roller at other casinos, including casinos in Las Vegas. It also knew, or at least believed, that he was wealthy. Crown therefore wanted his business.

10 It is this set of circumstances which now forms the core of the plaintiff's case. He maintains that, when his wealth and his journeys to Las Vegas came to Crown's attention, its previous indifference towards him transmogrified into a desire to exploit what it remembered as his addiction for the gaming tables. Crown, he asserts, therefore determined to prey upon that addiction by enticing him to return to Melbourne for as long and as often as it took for his fortune to fall into Crown's lap.

11 I do not accept this account. Although the plaintiff contends otherwise, Crown was in no position to prey upon him. Despite his attempts to persuade me to the opposite conclusion, he was not a person so helplessly entrapped by his love of cards that he found it impossible to resist Crown's attentions. On the contrary, as Crown was well aware, many other casinos were happy to accommodate Mr Kakavas and his money. Crown knew that, unless it offered him terms that matched those of the opposition, he would without a qualm ditch Crown for another willing suitor. Moreover, he had another and particularly potent, weapon. He could self-exclude. This, necessarily, gave Mr Kakavas a lot with which to bargain. He seized it.

12 It is true, and I so find, that Crown had in mind its earlier assessment of Mr Kakavas as a sometime problem gambler. It accordingly prepared a letter in which it had him disavowing any continuation of those problems. It asked him to sign that letter. He willingly did so. Crown also required that he obtain an assessment from a psychologist or a psychiatrist to the effect that he was not a problem gambler. Mr Kakavas, albeit grudgingly, acceded to this. He saw a psychologist (Ms Janine Brooks) on the Gold Coast, where he lived. She was unfamiliar with him. Although she was prepared to write a report about her consultation with him, she therefore declined to make a professional assessment. Much was made of this by counsel for Mr Kakavas; and it is the fact that, in the result, Crown allowed Mr Kakavas to resume his patronage of its Casino without first being furnished with any kind of expert assessment about his status as a problem gambler. On the other hand, the report prepared by Ms Brooks was the best possible evidence of what Mr Kakavas himself was asserting that time. His clear message was that any previous tendency towards problem gambling had been overcome. What is more, if it resurfaced, he had readily available the means to deal with it: he would again self-exclude. That is what he told her. He was perfectly capable of disclosing to her any vulnerability about which he was concerned. He did not.

13 Mr Kakavas told Ms Brooks the truth when he asserted, in effect, that he knew how to secure a self-exclusion order, and would do so if in his judgment his gambling problem re-surfaced. Yet he now contends (in effect) that Crown should have seen through Ms Brooks' entire report as false. It should have realised that he was a fraud. Indeed, it should have realised even more than that. It should have known - it did know - that he was living a lie. In particular, it should have known that, whereas he had demonstrated in the past a capacity to self-exclude, that capacity had somehow now completely deserted him.

14 Mr Kakavas contends that Crown concocted a predatory scheme with long-term implications. He does not allege that Crown sought to entice him into an occasional gambling foray. Such an allegation could not have been sustained. He would not have been especially attractive to Crown as a once in a while patron, because the odds were that the Casino would not benefit much from such patronage. Rather, Mr Kakavas' case is that Crown had a purely predatory purpose which it intended would be played out over the long term. It was to entrap him into becoming a regular visitor for as long as it took for him to gamble his fortune out of his hands and into the coffers of Crown. Then a triumphant Casino would tell him that, much as it valued his custom, it would be best if he put some distance between his empty wallet and a seat around its tables.

15 It is therefore not the plaintiff's case that he, a person with limited financial capacity, was inveigled into a few gambling transactions with Crown. Rather, it is his case that he, being helpless to resist the lure of the gambling salon - indeed, being so helpless that he could not even take the straightforward path to self-exclusion - was enticed by Crown, and against his better judgment, to become a regular, long-term patron of the Casino, and to gamble there for as long as it took to exhaust his admittedly extensive funds.

16 This proposition cannot survive close examination. Crown was acutely aware, when contact was made with Mr Kakavas in late 2004, that in any negotiations which followed, he might not accept the conditions Crown wished to impose upon him; and that, if he came to that view, he would not recommence, or would withdraw, his patronage. He had available to him, and he was fully aware of, his right to self-exclude. And he, being fully alive to his negotiating strength, used the implied threat of the withdrawal of his patronage as a legitimate, but effective, negotiating weapon. There was none of the inequality of bargaining position about which Deane J spoke in Commercial Bank of Australia Ltd v Amadio[1], and which is of the essence of a claim that a person with a special disadvantage or disability has been unconscientiously exploited.

17 This case, then, depends upon the plaintiff being able to prove on the balance of probabilities that he could not resist the inducements deliberately and unconscientiously dangled before him by Crown. Captured by his pathological gambling addiction, he could not resist Crown's initial or any subsequent approach, even though he knew that in the self-exclusion process he had readily to hand a means of avoiding the consequences of his addiction.

18 The facts tell a different story. Between June 2005 and mid-August 2006, Mr Kakavas never suggested to Crown that he was other than financially capable of maintaining his high roller status, and keen to do so. Nor did he ever attempt to employ the self-exclusion mechanism. He contends that he was so much in the grip of his addiction that he was incapable of protecting himself even by this simple means. Yet he was quite capable of negotiating hard with Crown about the terms of his patronage, and of declining - not for a week or even a fortnight, but for the whole period between the end of January 2005 and the following 24 June - to visit the Casino when Crown refused to meet those terms. Mr Kakavas thus demonstrated a capacity to participate in the cut and thrust of offer and counter-offer, to reject certain Crown proposals and accept others, and to win terms more consonant with his wishes but which Crown was reluctant to concede. If he had that capacity, then it must follow that he also had the capacity to self-exclude. And if he could self-exclude, then Crown could not be said to have taken unconscientious advantage of him when seeking his patronage.

19 That there was relative equality of bargaining power is apparent from the history of the relationship between Mr Kakavas and Crown. Mr Kakavas had as his bargaining chip the implied threat that he would cease his patronage of the Casino if Crown failed to give him what he wanted. Crown negotiated on this basis. It never believed that it had Mr Kakavas in its power, so that his patronage of the Casino could be secured by an enticement or two. Because it wanted his custom, but knew that he could - and feared the he might - remove it, Crown was prepared to go some distance to reach terms acceptable to him.

20 Another difficulty for the plaintiff is that he has produced no evidence at all of any conspiracy by Crown to exploit him in the way about which he complains. He can point to no collective, or corporate, or even individual, decision to that effect. It is true that, in part, he relies on a valid proposition: that he had a gambling problem, and that Crown once knew about it. But his case also depends upon the invalid contention that, when he and Crown made contact in November 2004, Crown's motive was to exploit unconscientiously his disability to the point that he would become, and then continue as, a patron until his funds were exhausted, with Crown retaining his losses. The evidence cannot sustain the inference of corporate decision-making upon which his case relies.

21 Crown certainly wanted his custom. People like him fed its business. Crown executives, including the individual defendants, were involved in planning for his return as a high-rolling patron. But Crown had no conception of Mr Kakavas as suffering from any kind of relevant disadvantage. There was, indeed, no inequality of bargaining power, and no exploitation of, or any plan to exploit, any special disability from which Mr Kakavas might have been suffering.

22 Mr Kakavas was, at the end of 2004, legally disentitled from gambling at the Casino. There were two bases for that exclusion. The first was that his licence to enter the premises had been withdrawn by Crown in June 1998, and had not been restored. The second was that he had been excluded from the Star City Casino in September 2000 by order of the Chief Commissioner of Police of NSW, or his delegate. Following an amendment to the Victorian gaming laws which came into effect on 19 June 2002,[2] persons who are excluded from an interstate casino by an order of the kind made by the Commissioner in 2000 (designated by the Casino Control Act 1991 as an "interstate exclusion order") are automatically excluded from Victorian casinos as well.

23 There is another important consequence of an interstate exclusion order. It was introduced into the legislative scheme by the Gambling Regulation Act 2003. From 1 July 2004, any person who is the subject of such an order and who enters or remains in a casino, shall forfeit to the State all gaming winnings paid or payable to that person.[3]

24 Neither Mr Kakavas nor Crown appreciated that he was caught by these amendments. This was an omission on the part of both, but more particularly Crown. It was one of a number of examples of the lack of appropriate substance in Crown's protestations that it is a world leader in the promotion of responsible gambling (alternatively, if the claim is true, then other casinos leave even more to be desired).

25 Any casino that is serious about responsible gambling would ensure that it knew precisely who was and who was not subject to an interstate exclusion order. Crown knew enough about Mr Kakavas to know that gambling had presented problems for him in the past, and that he had been self-excluded from its own Casino. Indeed, it knew by no later than 5 November 2000 that the Star City exclusion order had been made. That, it is true, was before interstate exclusion orders had been invented; and when, on 19 June 2002, this species of exclusion entered the Victorian legislative scheme, no-one at Crown made the connection between that scheme and its effect on Mr Kakavas' right to enter the Casino. This is not surprising, since he was not then a Crown patron. Nor was he a patron when, on 1 July two years later, his right to retain any winnings was removed. Nevertheless, Crown should have made appropriate enquiries preceding the restoration, in February 2005, of his licence to enter the premises. Had those enquiries been made, the Star City exclusion order would have been rediscovered.

26 The fact that Crown was seriously careless does not, however, constitute a basis for any of the claims made by Mr Kakavas. Rather, he contends that Crown acted unconscientiously in allowing - indeed, encouraging - him to gamble at the Casino when it knew or ought to have known that he would be required to forfeit any winnings. Had he known the true position, he would of course have declined to have anything to do with the Casino. It would be madness to gamble when you could lose but could not win. He suggests that Crown was keenly aware of this, but failed to warn him for the very reason that Crown wanted his patronage.

27 This contention fails in the face of the evidence that Crown did not at any time bring to its collective mind the connection between Mr Kakavas and the interstate exclusion order which had been made in September 2000. In the absence of this connection, Crown cannot be guilty of taking unconscientious advantage of any disability from which Mr Kakavas suffered as a result of his ignorance of the effect in Victoria of the NSW order. In any event, Mr Kakavas did not forfeit his winnings. Consistently with its failure to appreciate the effect of the interstate exclusion order, Crown not only allowed Mr Kakavas into the Casino, but credited him with everything he won. He forfeited nothing. He therefore suffered no loss arising from the carelessness of Crown.

28 For these reasons, when read together with those set out in the balance of this judgment, Mr Kakavas' claim must be dismissed. Mr Kakavas having admitted that, if his claim should fail, he is indebted to Crown in the sum of $1,000,000, there must be judgment on Crown's counterclaim in that sum.

29 Out of an abundance of caution, I conclude this summary by stressing not only that it must be read with the balance of the judgment, but also that this litigation is concerned with a point of equitable principle as that principle is applied by the courts. It is not concerned with matters properly within the political sphere - such as setting general policies of responsible gaming. For very good reason, these are not within the courts' field of responsibility or power.

30 Nor is a general examination of Crown's conduct within the scope of the present litigation. Crown does present itself as a world leader in responsible gambling. Its relationship with Mr Kakavas does not give one any confidence that it deserves that status. On the other hand, his is one case among many. The Court therefore has no warrant to come to any general conclusions on this topic.

31 The plaintiff, Harry Kakavas, was once among the elite of Australian patrons of gambling casinos. He was the highest of this country's high rollers. And he spread his wings. His gambling took him from the Gold Coast not only to Melbourne, Sydney, Brisbane, Adelaide and Perth, but also to Las Vegas, Hong Kong, Macau and the Bahamas.

32 Very large amounts of money were necessarily involved: over a 16 month period he turned over $1.479 billion in Melbourne alone. He enjoyed some spectacular wins. In the end, however, he lost all he won, and more. Now he claims that some of those losses should be repaid by the defendants. The first of these is Crown Melbourne Limited, which operates a casino ("the Casino") in Melbourne. The second is John Williams, one of the casino's senior executives and, between 2 September 2003 and 16 March 2007, its Chief Operating Officer - International. The third is Rowen Craigie, its Chief Operating Officer between 1 April 2000 and 8 January 2002, and thereafter a director and, until 5 March 2007, its Chief Executive Officer.

33 $1.479 billion is a huge sum to pass through the hands of an individual person in the space of some 14 months. This is a point strongly made by Mr Kakavas. It demonstrates, he claims, the extent of his addiction. He also contends that the amounts he was wagering, together with the manner in which he engaged with his favoured game of baccarat and the betting with which it was and is associated, constituted an unmistakable sign, which Crown must have noticed, that it had on its hands a patron with a very serious gambling problem. Crown, he says, made the unavoidable observation. Having observed, Crown then came to the inescapable conclusion to which that observation necessarily gave rise; and having done so, resolved to exploit unconscientiously the disability thus revealed. And Crown actively took advantage of that disability to wring $20.5m. from Mr Kakavas. He contends that it should not now be permitted to retain those ill-gotten funds.

34 In these circumstances, I have devoted a large portion of this judgment to an analysis of Crown's records of Mr Kakavas' gaming activities at the Casino. One can through such an analysis gain an appreciation of the scale and speed of the plaintiff's playing of baccarat and the betting associated with it. More importantly, one can thereby better evaluate Mr Kakavas' claim that he was exploited.

35 The analysis to which I referred in the previous paragraph is preceded by an examination of the pleadings. This enables the reader to understand how each side pitched its case as the trial began, and to follow how that case maintained its connection with, or deviated from, the evidence subsequently called. I then outline the plaintiff's history insofar as it is relevant to the issues raised by the pleadings, and consider other relevant matters. Following the analysis of Mr Kakavas' behaviour at the gaming tables, I consider the evidence going to his status as a gambler and to the disability under which, as he alleges, he suffers. Crown's knowledge of that disability and its extent is examined, as is the alleged exploitation of it, before final conclusions are drawn.

36 Mr Kakavas contends that he has been subjected to the unconscientious behaviour of all three defendants. More than that, he has succumbed to it. According to his second further amended statement of claim ("the statement of claim") he has an uncontrollable and compulsive urge to gamble. He alleges, in paragraph 4 of the statement of claim, that in 1994 he told the Casino about this problem, and sought and obtained its "assistance, advice and counselling" about means by which he could avoid the temptation of resorting to its gaming tables. One of those to whom he turned - in about late 1994 - was William Horman, Crown's General Manager, Community Affairs. Mr Horman told the plaintiff that all Australian casinos operated a self-exclusion scheme, by which patrons could apply for an order from the casino forbidding their entry.

37 The issue was, by October 1995, a particularly pertinent one. On 10 November the previous year, the plaintiff had been charged with obtaining a financial advantage by deception. He made a full confession, and had pleaded guilty to having defrauded Esanda Finance Corporation Ltd of the sum of $286,125.65. That money, the plaintiff asserted both to the authorities and in the particulars under paragraph 4(2) of his statement of claim, had been used for gambling; and the episode was evidence of his being in thrall to his passion for baccarat. In those circumstances, and with a prison term being a distinct possibility when Mr Kakavas came up for sentence, the obvious step was to self-exclude. Any plea in mitigation would seem hollow unless the plaintiff, before the plea was heard, had removed himself from the temptation to repeat the fraud.

38 It was against this background that, on or about 8 November 1995, Mr Kakavas voluntarily applied to Crown for a self-exclusion order prohibiting him from entering, or remaining in, the Casino. The application was successful (as it was bound to be). As is asserted by paragraph 5 of the statement of claim, it was followed by a self-exclusion order issued by Crown. It is not in contention that the order was issued on 8 November. It is also accepted by all parties that Mr Kakavas did not gamble at the Casino again until June 2005, a period of almost 10 years.

39 Although the plaintiff was charged in November 1994, there followed a very long delay before he was sentenced. A principal reason for this - one not pleaded, but revealed in the evidence - was a deterioration in the mental health of the plaintiff. It was not until 23 January 1998 that Mr Kakavas was sentenced to two years' imprisonment, 20 months of which was suspended. He was released on 23 May 1998. On 3 June that year, he wrote to Crown with a request that his self-exclusion order be revoked. He pleads in his reply to Crown's amended defence to the second further amended statement of claim that the application was made at the suggestion of Mr Horman.

40 The application was successful. It was, nevertheless, a Pyrrhic victory. On 19 June 1998, at the same time that Mr Kakavas was handed the documents that confirmed the revocation of the self-exclusion order, Crown served him with a notice that his licence to enter or remain on any part of Crown's premises, including the Casino, had been withdrawn for an indefinite period.[4]

41 The facts surrounding the revocation of the self-exclusion order and the withdrawal of licence are not in dispute. Indeed, the plaintiff's written application for revocation of his self-exclusion is a document upon which (in paragraph 6(b) of its defence) Crown relies. It contains an acknowledgement that Crown had not encouraged Mr Kakavas to make the application, and that he would contact Crown immediately if, at any time, he had any concern about his decision to have the self-exclusion order revoked, or about his use of Crown's gaming facilities. It also releases Crown from any liability which may otherwise arise in connection with the revocation or the plaintiff's use of Crown facilities.

42 Mr Kakavas does not, in his reply or otherwise, contest the allegations made by Crown about the wording of the application to revoke. Nor is there any challenge to the propositions, put in paragraph 6 of Crown's defence, that the application was accompanied by an opinion in support provided by a consultant psychologist named Timothy Watson-Munro, and that, at the time the application was made, the plaintiff was facing a charge of armed robbery. In his reply, however, the plaintiff pleads - as was the fact - that this charge was dismissed at the conclusion of his committal proceeding in late 1998.

43 The statement of claim (by paragraph 8) then turns to September 2000. In that month, as the parties accept, the Chief Commissioner of Police of New South Wales, through a delegate, issued an order excluding the plaintiff from entering or remaining in the Star City Casino in Sydney. At that time, such an order had no impact on interstate casinos. On 19 June 2002, however, s. 12 of the Gaming Legislation (Amendment) Act 2002 came into operation. It introduced into the Casino Control Act the concept of an "interstate exclusion order", or "IEO", into which category the New South Wales order of September 2000 squarely fell. By this means, Mr Kakavas became subject to an IEO, and also became thereby subject to the statutory regime applicable to it. Among other things, he was from 19 June 2002 (and remains) prohibited from entering or remaining in the Casino, and Crown was (and is) obliged to include his name in a constantly updated list of names of persons who are so prohibited. The prohibition remains in place until revoked by the person who imposed it. Until that time, no promotional material relating to the Casino may knowingly be sent or directed "by any means" to the excluded person.[5]

44 Another effect of an IEO (or any other exclusion order) was pleaded by all parties - in paragraph 10(8) of the statement of claim, and paragraph 10(b) of each of the defences. It was also closely examined by both sides in submissions in this case. If, after 1 July 2004 (incorrectly said in the statement of claim to be 19 June 2002), a person gambles at a casino from which he or she is excluded then, by s. 78B(2) of the Act, all winnings paid or payable to that patron must be forfeited to the State (for payment into the Community Support Fund under the Gambling Regulation Act 2003).

45 Although the allegations of self-exclusion (made in paragraph 11 of the statement of claim) are not admitted, the plaintiff in fact (as I find) made an application to self-exclude from Jupiters Casino on the Gold Coast and from the Treasury Casino in Brisbane on 6 August 2000; from the Burswood Casino in Perth on 6 April 2001; and from the Sky City Casino in Adelaide on 7 September 2004. He was in each case successful, as he was bound to be.

46 According to the statement of claim, from about July 2004 Mr Kakavas has suffered from a psychiatric condition known as "pathological gambling". This is said to be "characterised by a continuous impairment of his ability to control the frequency with which he gambled and the amount of money that he wagered."[6] It is also alleged that "the plaintiff's ability to make rational decisions concerning the frequency with which he gambled and the amount of money that he wagered was significantly impaired." While not admitting the plaintiff's condition, the defendants do accept that, after July 2004, Crown was "aware that there was literature identifying a condition described as pathological gambling".[7] The individual defendants make a like, but not identical, admission.

47 Paragraph 15 of the statement of claim makes allegations about the width and breadth of the defendants' knowledge. It covered, according to the plaintiff, all the pleaded facts going to the plaintiff's gambling history with Crown, his relationships with senior Crown officers, his self-exclusion from Crown and other casinos, and his exclusion from the Star City Casino - together with the legislatively-imposed consequences of the latter exclusion. The defendants, in response, admit knowledge only of the plaintiff's patronage of the Casino, his self-exclusion and its revocation, and the withdrawal of his licence. In his defence, Mr Craigie answers the allegations made against him in paragraph 15A of the statement of claim, a paragraph directed specifically to him, by disavowing knowledge of any of the details of either the self exclusion or its revocation; and he adopts the same approach to the allegation that he knew about the withdrawal of licence. He also limits his admission about knowledge of the plaintiff's patronage of Crown; he accepts no more than that he knew that it commenced "some time prior to 2004".[8]

48 By paragraph 16A, the statement of claim next alleges that, during the first half of 2004, the plaintiff lost "enormous" amounts of money while gambling recklessly and excessively in Las Vegas. This, according to the statement of claim, "was indicative of a person suffering from pathological gambling" with its consequent loss of ability to control the frequency, and the amounts, with which he gambled. The defendants admit that the plaintiff gambled at the place and during the period specified, but do not otherwise make any admissions to these allegations.

49 Details of the extent of the defendants' knowledge about Las Vegas, about the plaintiff's exploits there, and about his vulnerability as a pathological gambler, are the subject of paragraph 16 of the statement of claim. It is a long paragraph, and it makes many allegations. Among them is the charge that each of the defendants knew not only of the fact of the Las Vegas visits and their purpose, but also of the reckless and excessive gambling in which Mr Kakavas then indulged, and of the special disability - pathological gambling, with all its associated symptoms and behaviours - which was indicated by this reckless and excessive conduct. The defendants further knew that the plaintiff had previously sought Crown's assistance in overcoming his problem gambling, had self-excluded as a means to that end, and as a result of his compulsion to gamble had defrauded Esanda. They knew that he "would be vulnerable to approaches by the defendants to recommence gambling at the Casino, and would be easily exploited into recommencing gambling at the Casino."[9] They knew that he did not seek to have restored his right to enter the Casino. If he did return, he would, as the defendants knew, engage in extravagant gambling over an extended period. In particular they knew that, were he permitted to place bets as high as $300,000 per hand, the dam would burst; and money - his money, in "enormous amounts"[10] - would flow into the depths beyond, where Crown would be waiting to gather it in. In these circumstances, he was - again, as the defendants knew - unable to meet the requirements which applicants for revocation of self-exclusion orders must meet; in particular, that Crown be provided with a letter from a properly qualified expert to the effect that his gambling problems had been overcome.

50 Paragraph 16 then turns to the Star City exclusion. The defendants, it claims, knew about it. They also knew that, as a consequence of that exclusion and of the relevant legislative amendments, the plaintiff was not only prohibited from entering the Casino, but also that all his winnings there would be forfeited to the State.

51 Consistently with their position in relation to paragraph 16A of the statement of claim, the defendants admit none of this, except their knowledge of the Las Vegas gambling and except to the extent that relevant admissions have been made elsewhere in their pleadings. They likewise deny the allegations contained in paragraphs 17 and 18 of the statement of claim.

52 Those paragraphs are preceded by the heading "The scheme designed to lure the plaintiff back to the Casino". Paragraph 17 alleges that, in or about late 2004, the defendants devised and gave effect to a scheme "to exploit and take advantage of the fact that the plaintiff suffered or may have suffered from pathological gambling ... in order to induce [him] to recommence gambling at the Casino". Crown, in its defence, seeks to meet this head-on. It alleges that, in or about late 2004, Mr Kakavas took the initiative by himself applying for re-admission.

53 It is not in dispute that such an application was made, and that it was accompanied by two letters. One was dated 9 December 2004 and signed by Mr Kakavas. It is set out in the particulars under paragraph 18 of the statement of claim. In it, Mr Kakavas expresses a wish to once again be permitted to enter the Crown precinct, states that he no longer has any problems with his gambling, and refers to "a letter from my psychiatrist/psychologist" which, it says, is "enclosed".

54 In fact, no letter was enclosed. Nevertheless, a Gold Coast psychologist did provide a letter, albeit that she was not Mr Kakavas' psychologist, and albeit that she never made any assessment of him. In a letter dated 23 December 2004 from a psychologist named Janine Brooks, Crown was told that the plaintiff presented to her on 20 December 2004. He sought an assessment but, since she had never seen him before, she declined to give one. She did, however, state that Mr Kakavas "explained that he was a compulsive gambler between the years of 1990 to 1998". Since that time, he had turned his life around. The letter continued: "He states that he has conquered the gambling problem and if he ever had a relapse of this compulsion he would again self-exclude himself from the Casino".

55 Both sides rely on this correspondence. The plaintiff contends that the 9 December letter was composed by Crown and presented to him for signature at Coolangatta airport. He signed it not because it was true, but because Crown had indicated to him that it was part of the necessary preliminaries for his return. And it was, as he alleges in paragraph 4 of his reply, prepared as part of the exploitative scheme described in paragraph 17 of the statement of claim. The letter of 23 December from Ms Brooks was forwarded by him to Crown because that too, having been obtained at the suggestion of Crown, was part of the process decreed by Crown to be necessary. Even so, its terms were not such as to support an application to be allowed to return to the Casino as a patron, and it therefore should not have been employed as if it did.

56 Crown, by contrast, puts the correspondence forward to bolster its assertion that, far from being unwilling, or even reluctant, to return to the Casino as a patron, Mr Kakavas asked Mr Horman to effect the revocation of Crown's withdrawal of his licence, and used the letters in support of this approach. In its answer to the allegation in paragraph 18A that Crown knew of the deficiencies in Janine Brooks' letter, Crown asserts that it was written to support the plaintiff's application to revoke the withdrawal of his licence to enter the Casino, and obtained by him for that purpose. Otherwise, the defendants deny the allegations in that paragraph (which, as I note in passing, follows paragraph 18, whereas paragraph 16A precedes paragraph 16; and this explains the order in which the allegations they make are dealt with here).

57 I referred in paragraph [43] above to the fact that (by s. 78A of the Casino Control Act) a casino operator must not knowingly direct any promotional material to anyone subject to an exclusion order (which now includes an IEO). Paragraph 19 of the statement of claim alleges three separate breaches of this provision. One was constituted by an invitation to attend the 2005 Australian Men's Open Tennis final. Crown responds with a denial; but neither the fact of the visit nor the fact that it was Crown which issued the invitation (whether on its own initiative or at the request of Mr Kakavas) was in dispute at the trial. I therefore take it that Crown simply denies the characterisation of the invitation as "promotional material". It is not alleged that Mr Kakavas gambled when at the Casino on that occasion. On the contrary, the undisputed evidence is that he did not. Indeed, Mr Kakavas in his reply asserts that "Crown did not permit the plaintiff to gamble at the Casino until about 24 June [11]05".11 He and friends of his were, however, not only provided with tickets to the tennis final, but also (or so he alleges) received complimentary accommodation, food and drink at the Casino, and the use of a limousine.

58 The second of the three allegations of breach is pleaded by paragraph 19(2) of the statement of claim. It is there alleged that, during the visit to the Open, Mr Kakavas at the invitation of Crown and in breach of ss. 77 and 78 of the Casino Control Act, entered the Casino's private gaming salons. These sections forbid a person the subject of an exclusion order from entering or remaining in a casino, and require Casino officers to remove such a person should he or she enter.

59 Each defendant denies each element of this (the second) allegation.

60 Crown also denies the third "promotional" allegation. It is made by paragraph 19(3), and is that, in breach of s. 68 of the Casino Control Act, lines of credit were - on specified dates - extended to the plaintiff. Then, by paragraph 20A, the plaintiff claims that, in order to induce him to continue to gamble at the Casino, Messrs Craigie and Williams approved an application made by him on 2 July 2005 for a cheque cashing facility, and subsequently approved his applications for changes to that facility.

61 Crown's response to these allegations is elaborate, and is set out in paragraph 19(c) of its defence. It there pleads (in effect) that, pursuant to s. 68, it is entitled to establish a deposit account to which are credited deposits made by the patron in whose name the account is held. Crown is thereafter entitled to issue to the patron either money or gaming chip purchase vouchers not exceeding in value the amount in credit; and it may also issue such vouchers to the patron in exchange for a cheque of equivalent value. These entitlements were, on Mr Kakavas' application, exercised in relation to him on a number of specified occasions.

62 One of these occasions was on 2 July 2005. The plaintiff then (according to paragraph 19(c)(iv) of Crown's defence) made an application for a "cheque cashing or facility limit change". This, on its acceptance by Crown, re-activated a cheque cashing facility which in 1994 had been established for Mr Kakavas. Having done that, Crown accepted a cheque from the plaintiff drawn in the sum of $345,000, and issued him with gaming vouchers to that value. On 4 July, after Mr Kakavas had "made a telegraphic transfer of funds to the first defendant", Crown returned his $345,000 cheque.

63 The plaintiff in his reply and defence to counterclaim takes issue with this account. The story, as recounted in paragraph 10 of that pleading, is that on 1 July or thereabouts, he transferred $1m to Crown as the pool from which he intended to fund his gambling. It is known in the industry as "front money". The immediate source of these funds was Mr Kakavas' account with the Commonwealth Bank. A standard "Premium Player Agreement" was then made by him with Crown. It did not include the provision of a cheque cashing facility, the benefit of which Mr Kakavas therefore did not then have.

64 According to the reply and defence to counterclaim, with some added colour injected during the trial, the plaintiff had, by the morning of 2 July, lost both his front money and an additional $200,000 which Crown had furnished to him as a rebate on his losses. But Crown's blood was up - or, as the plaintiff contends, it wanted Mr Kakavas to continue his run of bad luck. So Howard Aldridge, a Crown executive who at that time was standing in for John Williams, approached the plaintiff with a question: "How much money could he [the plaintiff] kick in to continue gambling?" Mr Kakavas replied that he could contribute $345,000. Mr Aldridge said that, if he made that contribution, which should be by bank cheque made payable to "PBL Finance", Crown would add "the same amount as gambling credit". This would give Mr Kakavas $690,00 with which to continue his gambling.

65 The reply goes on to allege that the plaintiff fell in with this plan. On that morning, 2 July 2005, the plaintiff handed to Crown a bank cheque made out as requested. He was then provided with gaming chip purchase vouchers and chips valued at $690,000. He subsequently did Crown the favour of losing the lot. Before the bank cheque was presented for payment, however, Mr Kakavas paid, by other means, the full amount of $690,000. The PBL cheque was for this reason returned to him.

66 The individual defendants do not plead to paragraphs 19(1) or 19(2) of the statement of claim. They do, however, respond to the allegation made in paragraph 20A that they approved Mr Kakavas' application for a cheque cashing facility, and thereafter approved a series of financial transactions to which he was also a party. They each admit that they were among those Crown employees who between July 2005 and May 2006 were authorised to give such approval, and that they subsequently did so in accordance with Crown's standard operating procedures (which, according to particulars supplied by all three defendants, had been approved by the Victorian Commission for Gambling Regulation or "VCGR"). Crown makes like admissions. All three defendants otherwise deny the allegations made in paragraph 20A.

67 Other inducements - in addition to the tickets to the Australian Open, the invitation to visit the private gaming salons, and the extension of credit - are alleged by paragraph 20 of the statement of claim to have been proffered to the plaintiff by Crown. They include the use of the Crown jet on approximately 30 occasions (including trips to Manila); receipt of boxes or carry bags of cash (on about 11 occasions, the amounts ranging from $30,000 to $50,000); and complimentary accommodation, food, drink, tickets to "events" (a soccer match in May 2006 between Australia and Greece is mentioned in the particulars), butler services and "limousine transportation". The particulars also specify an arrangement pursuant to which Crown promised that for every $100,000,000 turned over by the plaintiff, up to $400,000,000, Crown would give Mr Kakavas $100,000.

68 Crown admits much of all this: the jet (14 - not 30 - occasions, plus two Manila flights and one internal Philippines journey); tickets to events; and food, beverages, limousine transport, accommodation and butler services. It admits, in addition, that cash was paid as alleged, although it explains those payments in terms of complimentary allowances to which Mr Kakavas was contractually entitled. The allegations made by paragraph 20 of the statement of claim are otherwise denied.

69 Harry Kakavas was, from September 2000, subject to an interstate exclusion order. From 19 June 2002, he was thereby, and by force of s. 77(3) of the Casino Control Act, forbidden to enter or remain in any casino. It is alleged by paragraph 21 of the statement of claim, and denied by paragraph 21 of the first defendant's defence, that Crown nevertheless procured his entry into the (forbidden) territory of its Casino.

70 From the allegations in paragraphs 17-20 of the statement of claim, the plaintiff proceeds to an assertion that, induced by the conduct of Crown as described in those paragraphs, he recommenced gambling on about 24 June 2005 and continued to gamble at the casino until "about August 2006".[12] Crown in response admits that the plaintiff gambled at the Casino between 24 June 2005 and 17 August 2006, but denies the inducement.

71 The plaintiff and Crown experienced both sunlight and sorrow during those 16 months. In the end, however (as, in effect, paragraph 23 of the statement of claim asserts) the plaintiff paid a net $36,712,717.00 (approximately) for the pleasure of losing bets while being a Crown VIP; and Crown benefited in the same sum for the pleasure of having him as a patron. Crown demurs. According to its defence, the true figure is $20,539,484. This is calculated on the basis that Mr Kakavas' gross losses amounted to $30,216,720, but he received rebates totalling $9,677,236. The individual defendants plead the same figures. In paragraph 13(1)(b) of his reply, the plaintiff reduces the amount of the claimed net loss to "approximately $30 million."

72 The next allegation in the statement of claim is to be found in paragraph 24 and falls under s. 2.3.5 of the Gambling Regulation Act 2003. It is that, by devising the (alleged) scheme to lure the plaintiff to the Casino by the exploitation of his special disability, and by putting it into effect, Crown engaged in ill-practice. The consequence of this is spelt out in the section. It is that Crown is taken as having obtained those winnings by false pretences with intent to cheat or defraud - something Crown denies.

73 Mr Kakavas' status as an excluded person is the subject of paragraph 25 of the statement of claim. The plaintiff there alleges that ("in circumstances where Crown was aware of this matter and the plaintiff was not aware of this matter") Crown failed to tell him that, being the subject of an IEO, it was unlawful for him to gamble at the Casino.[13] Nor did Crown provide him with the (very important) information that, if he entered the Casino and, while there, gambled and won, he would forfeit his winnings to the State. To add insult to these injuries, Crown procured Mr Kakavas' re-entry "when it knew that there was no material from a suitably qualified professional person supporting the plaintiff's ability to control his gambling urges and condition, and that the plaintiff had not satisfied any of Crown's own requirements for revocation of a self-exclusion order."[14] At the same time, "Crown procured and encouraged the plaintiff to gamble at the Casino when it knew of the plaintiff's condition and gambling history."[15] As a particular of this knowledge, the statement of claim alleges that, during a conversation with the plaintiff "in about the middle of August 2006, Williams on behalf of Crown told the plaintiff to have a rest from gambling and seek professional help."[16] The paragraph concludes with the statement that among the "special inducements" offered by Crown were cash payments and "the ability to wager bets of $300,000 per hand and a rebate of 20% on all losses."

74 Of the three defendants, only Crown makes a substantive response to any of this. The others simply contend that these allegations are not directed at them. Crown, however, admits that it did not bring to the attention of the plaintiff either the unlawfulness of his gambling at the Casino, or the requirement that he forfeit his winnings. It contends that it was not required to do so. It otherwise denies the allegations contained in paragraph 25 of the statement of claim. In his reply, the plaintiff refers to the provisions of ss. 76(1) and 78AA(2) of the Casino Control Act which imposed relevant duties on Crown in relation to the plaintiff as a patron who was subject to an interstate exclusion order.

75 Under the heading "Unconscionable Conduct", which appears above paragraph 26 of the statement of claim, the plaintiff alleges (and each of the defendants deny) that, because he suffered from the condition known as pathological gambling, and from the impairments associated with it, he "was at a special disadvantage in his dealings with Crown in that his ability to make decisions and judgments as to what was in his own best interests, and to act accordingly was significantly impaired."[17] Each of the defendants either knew this or "knew of facts which would cause a reasonable person to form the opinion that it was more probable than not that the [pleaded] facts ... were true."[18] Crown's conduct was therefore both unconscionable at common law and in contravention of s. 51AA of the Trade Practices Act 1974 (Cth). Had it not been for such contravention, Mr Kakavas would not have entered the Casino, would not have gambled, and would not have lost.

76 Each defendant seeks to answer the proposition that the plaintiff was prohibited from entering or remaining in the Casino. Each seeks, in paragraph 31A of the relevant defence, to do so by alleging that, if he was so prohibited, then each time he entered the Casino between January 2005 and August 2006 he was in breach of the Casino Control Act - and for that reason disentitled from obtaining any relief "in respect of gaming losses he [then] incurred". In his reply, Mr Kakavas alleges that he told Crown of his exclusion from the Star City Casino: he told Mr Horman about this on about 14 November 2000, and on 22 December that year Mr Horman forwarded (by email) the same information to Mr Craigie. Again, in late 2004 or early 2005, Mr Kakavas (as he contends) spoke to Mr Williams about his Sydney exclusion. He had a like conversation with Mr Horman at about the end of January 2005.[19]

77 The statement of claim concludes with allegations that, in contravention of the Trade Practices Act, each of the two individual defendants aided, abetted, counselled or procured, and was directly and knowingly concerned in, Crown's breaches of the Act. These allegations are denied.

78 The first defendant has a counterclaim. It opens with a reference to its 2006 "cheque cashing facility". This, it alleges, had certain terms which governed its operations. These are set out at paragraph 34 of the pleading. These, however, do not appear to be particularly relevant. The cause of action upon which the counterclaim is based is simply that, on or about 11 August 2006, "Crown accepted a cheque from the plaintiff made payable to Crown in the amount of $1,000,000 ... and issued to the plaintiff gaming chip purchase vouchers of [an equivalent value].[20] On presentation, however, the cheque was dishonoured. Crown therefore claims the sum of $1,000,000, together with interest at the appropriate rate calculated in accordance with the cheque cashing facility.

79 The plaintiff admits that the $1,000,000 has not been paid, but denies any liability to do so.

80 On 30 June 1994, the Casino opened its doors for the first time. Construction of the building which was to become its permanent home was not then complete, so the Crown Galleria was pressed into temporary service.

81 Harry Kakavas was one of Crown's first patrons. On 6 July 1994, he was provided by Crown with a cheque cashing facility (with a limit of $30,000). At about the same time he was issued with an identification number (no.1558) which he thereafter retained throughout his patronage. It was also about this time that he first met the second defendant, John Williams, who was then a trainee blackjack dealer as well as a host in one of the Galleria's more refined gaming areas: the Oak Room, where gentlemen were required to wear a jacket and tailored trousers.

82 The evidence is that the plaintiff's gambling had already spilled into trouble. As he told a consultant psychologist, Mr Tim Watson-Munro, in early 1994 he had gambled and lost some $110,000 of his father's money; and in May that year he commenced, and over a three month period continued, to defraud Esanda Finance Corporation Ltd of a total of about $286,000.

83 It was not long before the fraud was discovered. On 10 November 1994, Mr Kakavas was interviewed by the Victoria Police. His evidence is that, during the interview, he made "full and frank admissions". Moreover, following that interview, he (as he said in his evidence) told Mr Howard Aldridge - who was then the manager of VIP casino operations - about his involvement in the fraud, and that he was not in a position to pay about $47,500 then owing to Crown. He also told Mr Aldridge that the fraud had been committed "because I had a gambling problem and I found it very, very difficult to resist the temptation of the gaming tables."[21] Mr Aldridge maintained that he was unable to recall speaking to the plaintiff in October and November 1994 about the latter's paying three cheques totalling $47,500,[22] although he agreed that it was his role at the time to deal with such matters. He denied that the plaintiff told him anything about having a gambling addiction; nor did he have any involvement in the plaintiff's self-exclusion application.[23]

84 The plaintiff was duly charged. He was, however, granted bail - one of the conditions of which was that he not enter the Casino. For reasons not explained to me, this condition was subsequently removed; and Mr Kakavas took advantage of his new birth of freedom. He resumed his gambling career at Crown. Consistently with the dictates of fate, he continued to lose.

85 It was at Crown, in early 1995, that the plaintiff first met Mr Bill Horman, who was then Crown's Head of Security. Mr Horman had been asked by Crown's chairman, Mr Lloyd Williams, to deal with Mr Kakavas after the latter had filed a subpoena for Mr Williams to give evidence at the application to vary his bail conditions. Mr Horman's account of his first contact with the plaintiff was in the following terms:

The initial contact involved me introducing myself to Mr Kakavas, telling him what my role was, advising him that I understood that he had subpoenaed the chairman and that the chairman wanted me to deal with him and deal with the matter.[24]

86 It is submitted on behalf of the plaintiff that Mr Horman was so often the point of contact between Crown and Mr Kakavas that the former's knowledge "was the company's knowledge under the primary rules of attribution."[25] I accept that that is so. What Mr Horman knew about the plaintiff, Crown also knew. The same is true of the second and third defendants (Messrs Williams and Craigie) as well as Mr Aldridge. In 2004, Mr Aldridge was Crown's Senior Vice-President of Domestic Marketing.

Plaintiff's Self Exclusion from Crown and Reports of Mr Watson-Munro

87 Meanwhile, back in 1995, the criminal trial lay somewhere over the horizon. A firm of solicitors (Pryles & Defteros) were retained to act for the defence. On 8 November 1995 the plaintiff applied for self-exclusion from the Casino.[26] The application was witnessed by Mr Peter Pryles of that firm, and by Mr Horman. The self-exclusion order was made by Mr Horman that same day, and served at 5.10pm in the presence of Mr Pryles.[27]

88 There is some debate about who suggested the self-exclusion process, and in particular, the role that Mr Horman played. According to the plaintiff, it was at one of the three or more meetings which the plaintiff had with Mr Horman during 1995 that the latter told him about Crown's self-exclusion program. Mr Kakavas gave evidence about the discussion which followed. He said:

I basically opened up my heart to him and basically explained to him that I was borrowing funds that I couldn't repay, that I was stealing money that I should not be stealing and I said to him, "Bill, I don't know what to do, I feel trapped" and at one of those meetings during the course of 1995 he said, "Harry, we have an exclusion program at the Casino." By this time of course I had no idea what an exclusion program was because I had never self-excluded myself ever before from any venue. Mr Horman went on to say that the Casino offered ... a self-exclusion program to problem gamblers and he thought it would be a good idea if I was part of that program.[28]

89 Mr Horman denied that he and the plaintiff discussed any gambling problem the latter might have had, or that Mr Kakavas ever said that he had an addiction to gambling.[29] In relation to how the subject of the self-exclusion process arose, Mr Horman gave the following evidence:

I recall being contacted by Mr Defteros. He explained to me that he was acting for Mr Kakavas. He asked me to explain the self-exclusion program at one time and I went through that in detail with him. He also, and it could have been a further conversation, asked me if I would be prepared to go to his office for the purpose of carrying out the self-exclusion process.[30]

Mr Horman later gave a description in a memorandum prepared in 1998 consistent with his evidence about these events.[31] Mr Horman recalled that, at the meeting on 8 November 1995, Mr Defteros said something to the effect that the self-exclusion order would be put by way of mitigation at the plaintiff's forthcoming trial.[32]

90 On 19 September 1995, Pryles & Defteros referred Mr Kakavas to Mr Tim Watson-Munro. The plaintiff thereafter attended sessions with his new therapist "on a fairly regular basis".[33] In a report dated 12 March 1996 and addressed to the solicitors, Mr Watson-Munro wrote that Mr Kakavas first presented to him with a history of being charged with serious theft by deception "arising from a severe and untreated, until recent times, gambling addiction"[34] which had reached a "severe and pathological level".[35] He also suffered from significant emotional problems to the extent that at times he was in such a state of agitation that communication with him was difficult. In Mr Watson-Munro's opinion, the criminal charges faced by Mr Kakavas were brought about by "the delusional belief that he would be able to gamble his way out of debt and repay his father, as well as the capital that was fraudulently obtained from Esanda Finance."[36] He expressed the view that the plaintiff had made "some progress in relation to facilitating a remission in his gambling addiction during the course of treatment" and noted that he had received "some counselling from Mr Bill Horman ... and through discussions with him and myself have a complete ban placed upon his attendance at the Crown Casino and other casinos around Australia." [37]

91 According to the plaintiff, he told Mr Watson-Munro (and the other psychologists he consulted) that he was banned from the Casino and he had "asked Mr Horman if he could ban me from the other casinos throughout Australia."[38] He denied saying that he had banned himself from every casino in Australia. However, he agreed that he lied to Mr Watson-Munro when he told the psychologist that, over the previous twelve months, he had managed to curtail his gambling activities.[39]

92 In a further report, on this occasion dated 12 June 1996, Mr Watson-Munro recorded that the plaintiff had undergone treatment with a Dr Parekh at the Melbourne Clinic at Vaucluse Hospital. This included the administration of Valium. Mr Watson-Munro continued:

On a more positive note, it would appear that [Mr Kakavas] has continued to refrain from his strong desire to [gamble], suggesting that with ongoing treatment his prognosis is reasonable in relation to this consideration.[40]

93 Despite an annotation on Mr Watson-Munro's reports asking that they not be disclosed to the client without the author's permission, the plaintiff gave evidence that he saw both of these reports on about the dates they bear.[41]

94 According to the plaintiff, Mr Horman suggested that he see a psychologist, Dr Jack Darmody,[42] who was running a program for problem gamblers which was funded by Crown and known as the "Crown Assistance Program".[43] Mr Horman's evidence was that he did no more than hand the plaintiff a Crown Assistance Program brochure which had a contact telephone number on it. While Dr Darmody was likely the person "on the end of the phone of the number provided",[44] his name did not appear on the brochure, although Mr Horman may have mentioned his name during discussions held in Mr Defteros' office.[45] I accept that Mr Horman was instrumental in pointing Mr Kakavas in Dr Darmody's direction. At all events, the plaintiff saw Dr Darmody at least twelve times, at intervals of roughly a week or a fortnight, about his gambling problems. I am satisfied that Crown was the vehicle through which contact was first made.

95 Dr Darmody prepared two reports for Pryles & Defteros. They are dated, respectively, 17 July 1996[46] and 29 July 1996.[47] The plaintiff asserted in cross examination that they are, in part, fundamentally false - and that he takes responsibility for it. He says that he lied to Dr Darmody about the success of his treatment.[48] Dr Darmody's reference in his first report to the plaintiff's "considerable progress ... in that he is now abstaining from gambling" was, according to Mr Kakavas, wrong: far from abstaining from gambling, he continued (he said) to indulge throughout the period of his treatment.

96 Mr Kakavas contends that he had a motive for his mendacity. He wanted to continue to gamble,[49] and he feared that, if he told the truth, steps would be taken to force him to stop. Be that as it may, both Dr Darmody and Mr Watson-Munro were satisfied that an adjournment of his plea would afford him an opportunity to receive more intensive treatment. Dr Darmody was, in addition, of the view that further delay would enable Mr Kakavas to benefit from regular attendance at Gamblers Anonymous, and restore to Esanda the funds stolen from it.

97 In his second report Dr Darmody notes that, in the context of the plaintiff's anxiety and agitation, Mr Kakavas expressed "a fear of having no control over his life at the moment" and had an impaired ability to "address issues rationally and logically." He continued:

Until he is able to demonstrate the ability to address all aspects of his defence and maintain his emotional control while still accepting the fact that a custodial sentence is a possible outcome, I believe he will be unable to give detailed and reliable instructions to his legal representatives. It is difficult to attach any time interval to the change process, but I would suggest a delay until at least early October will be necessary.

98 Despite this, Dr Darmody expected that the plaintiff would "soon be able to approach the future with a much higher level of emotional control." He also noted that Mr Kakavas' motivation to abstain from gambling was "supported by his request to be banned from all major casinos in Australia." According to the plaintiff, this was a request that he had made to Mr Horman, even though he knew that in order to be banned he had to make his request to each and every casino in question.[50]

99 The plaintiff saw each of Dr Darmody's reports at about the time they were prepared. He also asserted that he not only showed them to Mr Horman but, because the latter indicated an interest, discussed them with him. Whether that discussion included references to what Mr Kakavas now claims were their false assertions about his abstinence from gambling is something he did not address in his evidence. I do not believe this. It seems to me to be highly unlikely that the plaintiff would have confessed to Mr Horman that Dr Darmody's optimistic assessments of Mr Kakavas' progress were based upon a body of lies consistently told to the psychologist. If, during treatment, Mr Kakavas' gambling continued unchecked, then he would not have refrained from telling his counsellor while at the same time confessing all to his confidant.

100 For his part, Mr Horman denied ever seeing any of the reports prepared by Dr Darmody - or, for that matter, any of those prepared by Mr Watson-Munro and Mr Healey.[51] I accept Mr Horman's evidence on this point. He also said that, although the plaintiff told him that he was under Dr Darmody's care, he never discussed the psychologist/patient relationship in detail. He did, however, speak to Dr Darmody from time to time about patients, including the plaintiff, who had consulted the psychologist under the Crown Assistance Program; but issues of confidentiality prevented any descent into detail. Mr Horman agreed that he knew that Mr Kakavas was seeing Dr Darmody regularly, but pointed out that - as he understood it - this was as a private patient, and therefore at the plaintiff's expense.[52]

101 During his cross examination it was put to Mr Horman that a reference to "update re Dr J Darmody" in notes he made of a conversation with the plaintiff on 14 August 1996 supported the plaintiff's evidence that he kept Mr Horman informed about the treatment he was receiving. Mr Horman's evidence about this entry, which in general I believe, was as follows:

I don't recall any details other than he had seen Mr Darmody and he went on to say he had seen someone else but at that stage, as my notes indicate, I was unable to continue [writing] details of what was being said and he went on to another topic.

...

I wrote "update" because he started to say he had been talking to Dr Darmody. I wrote the word "update".

Q: Mr Horman, "update" was your summary of what had happened, wasn't it?

A: No, it was my starting of what he may have been going to go on and talk about but didn't and went on to another matter which was another person who at that stage I couldn't even recall or record who [it was] and he then went on to a different topic.[53]

102 Mr Horman said that he and the plaintiff discussed the latter's admission to the Melbourne Clinic at the Vaucluse Hospital, but no mention was made in that context of any gambling problem.[54] The discussions they had related to why Mr Kakavas had either refused to go to the Melbourne Clinic, or went and refused to stay. The admission to that clinic was to deal with the plaintiff's mental and emotional state.[55] Mr Horman explained:

At the time I had concerns about his mental well-being. He displayed a number of symptoms which caused me concerns. He was also making serious threats against various people. He was also talking about self-harm or committing suicide.[56]

The plaintiff agreed in cross examination that while at Vaucluse Hospital, Dr Parekh was treating him for depression and anxiety, and was not treating him for any issues concerned with problem gambling.[57]

103 By a letter dated 24 August 1996, Dr Darmody referred the plaintiff to Mr Bernard Healey, a clinical psychologist who specialised in gambling related diseases. The letter referred to the plaintiff's "difficulties which have arisen as a result of an addiction to gambling." While Dr Darmody expressed the view that Mr Kakavas then exhibited "less emotional fragility" than when first seen, it was Dr Darmody's opinion that the plaintiff needed continuing treatment from someone who could represent him in court when his plea was heard.[58] Mr Healey gave evidence that he has dealt with around 1,000 problem gamblers over the course of 40 years of practice, a number of whom were referred to him "from the legal system where they had been involved in acts of dishonesty and fraud and had to face court in relation to those matters."[59] Around 50% of his work comprises giving evidence in court and providing reports for that purpose. Many of those court appearances and reports have been provided in support of a plea in mitigation of sentence. He agreed in cross examination that he could be described as "a psychologist who specialises in the forensic area".[60]

104 The plaintiff first consulted Mr Healey on 29 July 1996. In an unaddressed report prepared on 9 June 1997,[61] the psychologist noted that, at the time of his initial presentation, Mr Kakavas was too stressed and excitable to undergo testing. Subsequent consultations and testing took place through the remainder of 1996 and into early 1997. The result, according to Mr Healey, was "significant progress" and "continuing steady recovery ... strengthened over time." Mr Healey nevertheless concluded, on the basis of these consultations and after reading the police record of interview, that the plaintiff had become "a classical pathological gambler" who was "still very vulnerable to the lure of addictive activity and the precarious solace and support it provides". He also described the "illusion of control" which led the plaintiff to continue to gamble, despite substantial wins, in the hope that he could achieve the "big win" to enable him to repay the funds obtained from his father and from Esanda. He noted that the plaintiff's addiction -

... will remain with him for many years to come, that he will need to be very vigilant. There remains a residual level of anxiety, and a hypomanic trend still, which in the past had reached distressing proportions, where he had great difficulty controlling the impulsivity associated with his excitability, which of course was significantly exacerbated by the 'hype' of the casino environment.[62]

Mr Healey also observed that the plaintiff "has come to realise that any thought or suggestion of gambling is unacceptable in his case". Not only that, but he had taken steps to enforce a self imposed ban on casino attendance. As one result, "he hasn't gambled again", while as a second he was making restitution to Esanda. Mr Healey thought it significant that the plaintiff was "devastated by his actions to the extent where he voluntarily had himself banned from all casinos throughout Australia".

105 Having been told by Mr Healey that he was a classic pathological gambler, Mr Kakavas continued to see him for treatment "many, many, many times"[63] (in cross examination, however, Mr Healey accepted that no consultation took place between 9 June 1997 and the following November).[64] Mr Healey wrote a further report dated 15 January 1998, in which he recorded that Mr Kakavas had had telephone contact on several occasions and that he "has not been involved in any kind of gambling, indeed, his attitude, his more settled functioning and clearer objectives were seen as being consistent with absent gambling and maintained insight into the nature of his addiction."[65] Mr Healey described the plaintiff as being "at peace with himself" and having a "more settled lifestyle" and steady work.

106 The plaintiff acknowledged seeing these reports at about the time they were issued. Although he agreed that the statement, in the first of the two, that he had voluntarily banned himself from all Australian casinos was wrong, he did not bring the inaccuracy to Mr Healey's attention. He denied, however, being its source. Moreover, and notwithstanding his concealment of the fact from Mr Healey, he continued to gamble at Jupiters Casino on the Gold Coast throughout 1996 and 1997.[66] On 12 January 1998 he was at the Star City Casino for the same purpose [67].

107 By these actions, Mr Kakavas not only gave the lie to the Healey reports, but also exhibited behaviour which made a mockery of his relationship with his psychologist. He contends that this merely demonstrates the truth and extent of his illness. Indeed, if the evidence given by Mr Kakavas at this trial is to be believed, about the only statement in either report which was true was the reference to settled work. The plaintiff agreed that he had employment with a friend at the time. Contrary to the information given to Mr Healey, however, he was continuing to gamble, although not at Crown.[68]

108 Under cross examination, Mr Healey gave some important evidence. He agreed that, in June 1997, he formed the view that the plaintiff had learned "a valuable technique to prevent the exploitation of impulses to gamble ... not necessarily to control them but certainly to prevent their fulfilment."[69] This conclusion was, Mr Healey said, based on information given to him by the plaintiff, who told him about seeking to self exclude from all Australian casinos. Although Mr Healey understood (incorrectly as it turns out) that the plaintiff had ceased to gamble, his evidence was that he nevertheless continued to regard the plaintiff not only as a pathological gambler,[70] but uppermost in the scale of those who were.[71]

109 The reports prepared by Mr Healey were provided to Judge Wodak during the plea in the County Court on the plaintiff's behalf in relation to the eight counts of obtaining property by deception. Although he did not give evidence at the plea or attend court, Mr Horman prepared a statement that may have been (but perhaps was not) tendered.[72] In that statement Mr Horman refers to concerns he had "over a period of time" in relation to the plaintiff's well-being, including him speaking of committing suicide. He raised these with Mr Kakavas' solicitors, and later with Mr Watson-Munro. Under the heading "Self-Exclusion" Mr Horman stated:

Knowing of Mr Kakavas' inclination for gambling and what appeared to me to be his state of mental health, I suggested to both him and his solicitors that he should consider making application to have himself Self-Excluded from the Casino ...

I also made arrangements for him to receive counselling from Dr Jack Darmody from Access Programs who has extensive experience in dealing with persons with problems associated with gambling activities.[73]

In very early days I had sincere concerns in relation to the state of his mental health. In more recent times his mental well-being, accepting that I do not [have] any professional qualifications in this field (but I've been around for a while and dealt with many persons under various stressful situations in various mental conditions), appears to be greatly improved and stable.[74]

110 Mr Horman gave evidence that at that time he did not have a view about whether the plaintiff was a pathological gambler, although he knew he had "an inclination to gamble."[75] He did not think that he had an addiction to gambling or an inclination to gamble uncontrollably.[76] He maintained that the plaintiff did not mention to him any gambling problems during their various discussions at this time; his focus was on "other matters that seemingly were more pressing to him." And while Mr Horman was aware that Mr Kakavas was consulting with Dr Darmody, Mr Watson-Munro and Mr Healey, he said he did not know "if one or any of the three of them were treating him for other issues outside of gambling."[77]

111 Judge Wodak sentenced Mr Kakavas on 23 January 1998. In his sentencing remarks his Honour noted that it was not in issue that Mr Kakavas gambled a substantial part of the $305,900 loan funds at Jupiters Casino and at the temporary Crown Casino. He took into account as material factors in sentencing that Mr Kakavas had "demonstrated a number of positive signs of rehabilitation".[78] Those positive signs included partial restitution of the funds obtained from Esanda, remorse, his employment for two years, his ongoing treatment and his self-exclusion order. His Honour made it clear that if the plaintiff were to avoid a relapse, "you must remain vigilant and disciplined."[79] Mr Kakavas was sentenced to two years imprisonment, eighteen months of which was suspended. The effect was that he served four months. At the plaintiff's request, Mr Horman visited him twice during that period to discuss the possibility of an early release.[80]

112 Mr Kakavas was released from prison on or about 23 May 1998. He gave evidence that within days of his release he arranged to meet Mr Horman to seek his assistance in relation to information he received while he was in gaol that the police suspected him of involvement in another serious crime. This is a reference to an armed robbery in which the plaintiff and others were said to have been involved; and there was a suggestion that Mr Kakavas had gambled the proceeds at the Star City Casino in Sydney on the same evening as the offence. It took place on the Shark Fin restaurant, owned by Mr Jimmy Sui, a tenant of Crown and a high roller gambler who played in Crown's Mahogany Room. As a result of this incident there was (it was said) evidence of considerable animosity between the plaintiff and Mr Sui. Mr Kakavas told Mr Horman that he was innocent, and asked him if he would inform the armed robbery squad that he (the plaintiff) would be happy to be interviewed about the matter. The plaintiff, who was then living with his parents in Caulfield, said he was concerned to avoid a raid. Mr Horman agreed to speak to the armed robbery squad on his behalf. In the upshot, Mr Kakavas was charged with armed robbery, although at the subsequent committal hearing those charges were dismissed.

113 Following his release from gaol the plaintiff also sought to have his self-exclusion order revoked. The resultant Application for Revocation of Self Exclusion was dated 26 May 1998 but signed by the plaintiff on 3 June 1998. Among the matters to which the plaintiff was said to have agreed by signing the application was a requirement that he provide to Crown a written report from a suitably qualified professional advising that he did not have a gambling problem.[81] It also included not only an acknowledgement that Crown did not encourage him to seek the revocation but also an authority for Crown to discuss with any psychologist or psychiatrist who had provided a written report the grounds and circumstances surrounding his original application for self exclusion. It continued:

You have given this matter careful consideration and will contact Crown Limited immediately, if, at any time, you have any concerns about your decision to have your Self-Exclusion Order revoked and your use of Crown Limited's gaming facilities.
You agree to release and indemnify Crown Limited, its employees, agents and contractors from any liability which may arise in connection with the revocation of the Self-Exclusion Order and your use of Crown Limited's gaming facilities.[82]

This is an important document. It is strongly recommended that, prior to signing this document - below - you discuss this matter with your legal advisor, counsellor and members of your family if you have not already done so.

114 In support of that application, the plaintiff contacted Mr Watson-Munro and told him that he wanted to be allowed back into the Casino primarily for entertainment purposes. He asked whether Mr Watson-Munro would provide Crown with a relevant psychological assessment. During the subsequent consultation, Mr Watson-Munro took the plaintiff through the application for revocation of self-exclusion, which the plaintiff then signed on 3 June 1998. Mr Watson-Munro also provided a report dated 3 June 1998 addressed to Crown's Incidents and Exclusions Supervisor, Mr Jack Troost, in which he stated that since the time when the plaintiff had applied for the self-exclusion:

... Mr Kakavas has involved himself in intensive psychotherapy with me. Treatment has been very successful in the context of Mr Kakavas now no longer feeling the pathological compulsion to gamble which had plagued him in earlier times.[83]

He stated that he now feels far more relaxed about the prospect of social gambling and as a consequence of therapy, feels that he now has both the insight and requisite behavioural skills to maintain his involvement at the Casino at no more than that of a recreational gambler.[84]

115 The plaintiff said that he gave the signed application and the report to Mr Horman and asked him for his support in order to revoke the self-exclusion. Mr Horman explained that there was a process to be followed. It included consideration by a committee of which he was a member. On 8 June 1998 Mr Horman prepared a memorandum to Mr Troost which he copied in to a number of other Crown officers, including Mr Aldridge.[85] While Mr Horman noted that the plaintiff had received what he described (in inverted commas) as "treatment" from Mr Healey and Dr Darmody, the general tenor of the memorandum is sceptical of the plaintiff's claim to have a gambling addiction for which he was receiving such "treatment". In the memorandum, Mr Horman referred to a conversation he had with the plaintiff that day in which Mr Kakavas asked him to "put in a word for him with Mr Troost". The memorandum continued:

... and he went on to explain and threaten that if Crown denies his request for revocation, he will then sue Crown for "breach of a duty of care" in that it was aware of his substantial losses at Crown, should have been aware of his "obvious gambling addiction" and were negligent in not taking steps to prevent his further deterioration and losses.

Mr Kakavas, many months ago, mentioned to me that he was aware that a "solicitor was going to sue Adelaide Casino for breach of its duty of care" in not assisting him to avoid his substantial gambling losses due to his serious gambling problem - so the thought of such an action is not new to Mr Kakavas.[86]

It may not be particularly smart to threaten, with a claim for negligent failure to act upon an obvious gambling addiction, the very body from whom you seek permission to gamble. Nevertheless, Mr Horman then described the plaintiff as "a very clever and devious person" and added:

I further suspect that he very shrewdly uses his claim to be "addicted to gambling" in anticipation of having a "ready plea" in mitigation if he is detected or charged with any offence.[87]

The memorandum concluded by cautioning that any Crown officer dealing with Mr Kakavas needed to be alert to the prospect that their conversation would be taped by the plaintiff.

116 The plaintiff denied making the statements attributed to him by Mr Horman, although he agreed he did say that he would sue Crown for discrimination.[88]

117 Mr Horman prepared another memorandum on 11 June 1998 summarising a telephone conversation he had with the plaintiff the previous day. Mr Kakavas, he said, had been "very agitated" and threatened to sue Crown if it did not revoke his self-exclusion order. Mr Horman attached and referred to a newspaper article mentioning a duty of care alleged by patrons seeking to sue casinos. He also noted that the plaintiff had threatened to invite the media to Crown if the decision in relation to his application for the revocation of the self-exclusion order was not hurried up.[89]

118 It is clear from the 8 June memorandum that Mr Horman had reservations about the extent of Mr Kakavas' gambling problem. It is also clear that he had doubts about the credibility of Mr Watson-Munro's 3 June 1998 report. These doubts are evident in a memorandum which Mr Horman wrote to Mr Troost on 28 December 1998. After a reminder about the existence of that report, Mr Horman continued:

At the time I mentioned that I knew Mr Tim Watson-Munro fairly well over a period of many years. You may recall my suggestion at the time was not to accept the report on its face value and to "go behind" the report and query with Mr Tim Watson-Munro some bases of his conclusions and recommendation.[90]

119 On its face, this passage fails to disclose the source of Mr Horman's concern. In his 3 June report, Mr Watson-Munro refers to both "the pathological compulsion to gamble which had plagued [the plaintiff] in earlier times" and to the "very successful" treatment he had subsequently undergone. If regard were had only to the quoted passage, Mr Horman might have either of the statements in mind as not to be taken at face value. It was submitted on behalf of the plaintiff, however, that Mr Horman was here rejecting the opinion of Mr Watson-Munro that the plaintiff no longer felt the pathological compulsion to gamble as a result of his treatment. The December memorandum, it is said, "reveals Mr Horman's continuing concerns and belief about Mr Kakavas' gambling problem".[91]

120 Mr Horman rejected this when it was put to him in cross examination. He said that his concerns were raised by the statement by Mr Watson-Munro in the opening sentence of the report that the plaintiff "has been an ongoing client of mine for the past 4 years". This made him uncomfortable. He was surprised Mr Watson-Munro had not given an indication that he had been treating the plaintiff for years when Mr Horman contacted him about his concerns about Mr Kakavas' mental health.[92]

121 I was not impressed with much of the evidence given by Mr Horman. This is an example. It may be that the witness was confused; but whether it was confusion or an inability to identify the truth, Mr Horman's reference to the period during which Mr Kakavas was a patient of Mr Watson-Munro was in my opinion a red herring. I find that, in fact, he regarded the 3 June report as unsatisfactory because he did not believe that Mr Kakavas had ever felt the pathological compulsion to gamble.

122 The plaintiff gave evidence that on or about 18 June 1998, Mr Horman asked him to come to a meeting at the new Casino complex. At that meeting Mr Horman was accompanied by another man (it seems this was Mr Troost). Mr Horman handed the plaintiff a letter revoking the self exclusion order.[93] Almost immediately, however, Mr Horman gave him a second letter, which withdrew his licence to enter or remain in the Casino or on Crown premises.[94] The plaintiff said he was outraged. He stormed off.

123 The second letter incorrectly refers to a conversation on 19 February 1998 concerning the withdrawal of licence (the "WOL"). After the plaintiff pointed this out to Mr Horman during a subsequent telephone call, Mr Horman sent a letter dated 23 June 1998 correcting the error.[95] For present purposes, that error is immaterial.

124 The original WOL letter notes that the period of prohibition is indefinite, although Mr Horman indicated that the plaintiff could contact him to have it reviewed after six months. Mr Horman also wrote:

For the sake of the record, the withdrawal of your "licence" has not occurred in response to the revocation of your Self-Exclusion Order.

Whilst there is no obligation to provide any reason for the withdrawal of your "licence", and there are a number, one matter you will appreciate is the recent matter before the Court involving the owner of a restaurant who is a tenant of and frequent visitor to the Crown entertainment complex. I understand that a condition of your bail is that you are not to contact witnesses. Clearly your attendance at the complex could create some difficulties.[96]

125 The plaintiff said that after cooling off, he telephoned Mr Horman the next day or a few days later to express his anger and dissatisfaction. The plaintiff's account of his reasoning during this interaction was curious. He complained that Crown was happy to allow known criminals, as he described them, to use its facilities, while he had "one conviction for a fraud related offence which is completely consistent ... with my gambling addiction".[97]

126 If this is a truthful account of their conversation, it is no surprise that Mr Horman was not persuaded. A well-run casino has good reason to exclude those who have a known gambling addiction. But it is for that very reason that the account should not be accepted as accurate. Mr Kakavas had enough common sense to know that it would do him no good to tell Mr Horman that he was addicted to gambling. More consistent with reality is Mr Kakavas' agreement in his evidence that Mr Horman did suggest to him that, because he was facing the charge of armed robbery, "it wasn't satisfactory for me to attend the Casino."[98] Subsequent conversations with Mr Horman failed to persuade him that Mr Kakavas should be permitted to enter Crown premises.

127 During this period the plaintiff also made contact with a Crown employee, Mr Ishan Ratnam, whom he knew through their mutual friend, Mr Tony Khoury. From 28 November 1994 until 1 January 1997, Mr Ratnam was a manager of one or more bars located at the Galleria site where the original Casino was located. One of his roles was as Mahogany Room service manager. He first saw the plaintiff in November 1994 in the Mahogany Room. He was not involved in the plaintiff's self-exclusion, or in his application for revocation of that self-exclusion order, or the imposition of the WOL.[99] According to Mr Ratnam, on two occasions during the second half of 1998 the plaintiff asked him whether he could talk to Mr Horman about the plaintiff being able to come back to Crown. Mr Ratnam declined on the ground that the matter had nothing to do with him.[100]

128 In the meantime, the plaintiff had applied to have his self exclusion at Jupiters Casino revoked. This application was supported by a one paragraph letter from Mr Watson-Munro dated 10 August 1998[101] in which he stated that the plaintiff had been an intermittent client for some years "in the setting of a prior addiction to gambling". As a result of treatment, he said, the plaintiff had "better insight into his problems and of significance, the stressors which were previously responsible for his tendency to gamble have now been addressed. In this setting there is nothing at a clinical level to preclude him visiting Jupiters Casino for recreational gambling from time to time when he is in Queensland." The application was granted on 19 August 1998.[102]

129 In a letter dated 7 December 1998, which the plaintiff wrote to Mr Horman, he referred to the basis for the WOL in the following terms:

It was Crown's decision not to allow me access to the Casino citing a matter which was going before the courts for judgment as not the only reason but somewhat the major one for not granting me access to any area of the Casino.[103]

No mention is made of the plaintiff having any problem with gambling. Indeed, he concludes the letter by stating:

I wish to be granted access to the Casino to enjoy its facilities. It is my wish to resolve any differences amicably. I do not seek to cause trouble or embarrassment. My business is both welcomed and is sought after by every other casino in Australia. If Crown Casino continues to discriminate against me by taking a negative view to my attendance, I will use every available legal forum to obtain fairness and justice.

130 A meeting of Crown officers, including Mr Horman and Crown's then Senior Corporate Solicitor, Mr Alex Mathey, was held on 10 December 1998 to discuss the plaintiff's request. They decided not to revoke the WOL. When this news reached Pryles & Defteros, the firm sent a letter dated 15 December 1998 to Crown seeking details of the decision.[104] Not surprisingly, given the stance taken by the plaintiff at this time, no mention was made of any gambling problem on his part. Nor is there any hint of problem gambling being an issue in Mr Mathey's reply dated 17 December 1998.[105] Instead, Mr Mathey's remarks are entirely consistent with Crown being concerned about the disruption the plaintiff's presence might cause. He notes that if Mr Kakavas were to enter the premises:

... he may be subject to actions by the Victoria Police together with Crown including but without limitation for trespass to land. I point out that Crown has revoked your client's licence pursuant to its common law rights as occupier and not under the provisions of the Casino Control Act 1991 or otherwise.

131 Mr Mathey also asked that any further communications take place directly between himself and the plaintiff's solicitors, rather than by the plaintiff contacting Crown officers.

132 On 30 March 1999 Pryles & Defteros sent a further letter to Mr Mathey on behalf of Mr Kakavas seeking permission for the plaintiff to enter "Crown premises and in particular the restaurant entertainment complex".[106] Mr Defteros explicitly eschewed any request to enter the Casino area. Having received no response from Mr Mathey, the plaintiff telephoned Mr Horman in the first half of April 1999. According to a Horman memorandum dated 16 April 1999 to Mr Mathey, the plaintiff threatened that if Crown did not revoke the WOL "to enable him to go to the various restaurants and nightclubs", he would engage senior counsel and sue Crown. Mr Horman noted, "Interestingly he claimed that he does not want to have access to the gaming floor. However, later in the conversation he made the comment that once he gets into part of the complex it will be hard for Crown to justify keeping him out of the gaming floor."[107] Mr Horman conceded during cross examination that he did not believe Mr Kakavas' disavowal of any desire to enter the gaming area.[108]

133 In his evidence about this conversation, the plaintiff said that Mr Horman raised three outstanding issues that continued to be of concern. One was that Mr Kakavas might be directly presented by the DPP on the armed robbery charge after the magistrate dismissed the charge at the committal. Further, Mr Horman was still concerned that the plaintiff might have an altercation with Mr Sui if allowed back into the Crown precinct. And finally, said the plaintiff, Mr Horman told him he "was convinced I had a gambling problem" and thought returning to the Casino would not be right.[109] For his part, Mr Horman denied expressing concern about any gambling problem. He also denied saying that it would not be right for the plaintiff to return.[110]

134 On this last issue, I prefer the evidence of Mr Horman. In his evidence, Mr Kakavas could not initially remember what the "third point" was; and Mr Horman was unlikely to say anything which would undermine the decision to revoke the self-exclusion order.

135 It appears that Mr Mathey initially misfiled the letter from Pryles & Defteros.[111] Having had the letter brought to his attention by Mr Horman, Mr Mathey wrote to the firm on 22 April 1999, again confirming the continuation of the WOL and reiterating that Mr Kakavas should not communicate directly with Crown officers.[112] On this second point he was wasting his breath. Despite the warning about direct communication, Mr Kakavas on 6 July 1999 again contacted Mr Horman directly and said that for business reasons he needed to be able to return to Crown by 22 January 2000.[113]

136 In 1999 the plaintiff was working for a large real estate development company, Avonwood Homes, in Narre Warren. Towards the end of 1999 the plaintiff became a "buyer's advocate", seeking out opportunities for people wanting to buy properties primarily on the Gold Coast and in Melbourne. He started selling his services to people on a commission basis, charging 2% of the purchase price. At first he conducted this business personally; later he operated through a company, Elite Property Investment Group Pty Ltd. Initially he earned in the order of $100,000 to $150,000 per annum. Doubtless this helped fund gambling every couple of months at Jupiters Casino on the Gold Coast and at The Treasury Casino in Brisbane as well as at Star City Casino in Sydney,[114] using "a gaming bank ... of maybe $5,000 or $10,000, something to that effect".[115] The funds came either from his employment or as borrowings from friends.

137 Throughout the latter part of 1999 and early 2000 the plaintiff continued to gamble at Jupiters Casino, at the Treasury and at Star City Casino. In August 2000, however, he applied to exclude himself from Jupiters Casino.[116] By this time the plaintiff had met Fleur Anderson (whom he married in November 2006), although he did not then tell her about his gambling. He was also spending a great deal of time on the Gold Coast with his business. There is provision on the application form for a reason for the exclusion, but it was left blank by Mr Kakavas. He gave evidence about the reason for this application in the following terms:

Because as I said previously, I started to [spend] a lot more time on the Gold Coast and I knew I had a gambling problem and I wanted to protect myself from that gambling problem ... . I had made a decision at that time that the Gold Coast would be my base, my business was flourishing, I was buying and selling property very successfully and I knew my Achilles heel was the gambling and I wanted to ban myself from the nearest facility.[117]

The Exclusion Order was made on 6 August 2000.[118]

138 On or about 28 September 2000 the NSW Chief Commissioner of Police directed that Mr Kakavas be excluded from Star City Casino.[119] The plaintiff maintained that he did not receive the letter announcing this until late October or early November 2000. It had been addressed to him at his parents' Victorian home. He pointed to an entry in his diary for 3 November 2000 which read, "What a shock! Received exclusion notice today from Star City 'unbelievable'."[120]

139 The plaintiff initially gave evidence in chief that a further entry in his diary for 5 November 2000, "Rang B. Horman re Crown matter", related to a conversation during which he told Mr Horman about the Star City development.[121] He acknowledged that this differed from the second further amended statement of claim, which pleads that the relevant conversation occurred on 20 October 2000.[122] The pleading sets out the substance of the conversation as:

Plaintiff: Bill, I can't believe that the Sydney Chief Commissioner has excluded me without giving me any reasons.

Horman: Harry, there's not much you can do about it.

The plaintiff's amended reply fixes the date at 14 November 2000.[123] The Defendants submit that the plaintiff failed to swear up to the pleaded conversation.[124]

140 The plaintiff's evidence was that he sought Mr Horman's assistance to discover why he had been excluded by the NSW Commissioner of Police, but Mr Horman told him "he thought they would never divulge that reason to me, it was a private matter."[125] Later, however, the plaintiff acknowledged that the diary note suggests that he only spoke to Mr Horman on 5 November in relation to his exclusion from Crown and not from Star City. Nonetheless, he was adamant that he did mention the Star City exclusion to Mr Horman and sought his assistance at some time in November 2000.[126]

141 Mr Horman agrees that he did speak to the plaintiff in November 2000. His recollection, he said, was that while discussing whether Crown would revoke the WOL, the plaintiff said that he did not agree with a proposal made by a good friend of his, Bill McHarg, that he be allowed to return to Crown on a limited basis which excluded the gaming floor. He again threatened to sue Crown if it refused to allow him to return. During a conversation on 14 November 2000, of which Mr Horman kept notes,[127] Mr Kakavas also referred to the Star City exclusion and threatened to sue both that casino and Crown.[128] The substance of the conversation is referred to in an email sent by Mr Horman a few days later to the Casino Crime Unit in which he wrote that the plaintiff,

... was on the phone again earlier this week telling me that he is not going to take Bill McHarg's advice re HK's status here.

HK yelled again he is going to take on Star City all the way through to the High Court if he has to and he has (his words) no problem with joining Crown in the action and taking Crown to the High Court as well.[129]

142 According to the plaintiff, when on 5 November 2000 he discussed his exclusion from Crown, he told Mr Horman that he would like to return. He outlined his circumstances in the following terms:

I told him how I had steady employment, I told him that I was rebuilding my life. I told him that I would not be ... coming down for gambling purposes, I just wanted to be able to use the facilities because I had re-established a business relationship with people and I felt awkward and strange that I wasn't able to at least enter the Casino where I could use their restaurants, and there was one other reason ... too ... . At that particular time ... because I was back in the full swing of real estate there was a company in Melbourne by the name of Burgess Rawson and they were conducting regularly ... in the Crown rooms, not the gambling areas, they were conducting what's called bulk auctions. They would be auctioning sometimes up 30, 40, 50 properties at a time. As I was trying to become a buyer's advocate I needed to attend these auctions to either bid on behalf of my clients and provide some advice on behalf of my clients, and I felt like a moron that I couldn't attend and I was embarrassed to say to people I can't attend and I didn't know the answer why.[130]

He then threatened again to take action against Crown.

143 Mr Horman made notes of the 5 November 2000 conversation, and subsequently prepared a four page memorandum of the same date directed to Crown officers, including Messrs Mathey, Troost, Aldridge and Craigie.[131] According to the memorandum, the plaintiff told Mr Horman that he was "now financially very sound" in his business of purchasing property and building units. He claimed he had "about $15m stock on the go".

144 I accept the accuracy of these comments in the memorandum, largely because the plaintiff in cross examination acknowledged that he may have said these things.[132] Mr Horman then records the plaintiff threatening to "take Crown on" and saying he had the financial means to take legal action. However, if Crown were to revoke the WOL, the plaintiff would not take such action or go to the media. He told Mr Horman that even if the revocation were to take effect he did not intend to enter the Crown complex. Mr Horman expressed doubt about this assertion, writing: "I expect that he would want to attend Crown as I've been informed that he has recently been excluded from Star City Casino."[133] The memorandum also includes a detailed background briefing, in which Mr Horman described the self exclusion from Crown in 1996 as "possibly ... a defence ploy (as I understand that whilst self-excluded from Crown he continued to visit Jupiters and Star City casinos) for his then pending County Court trial."[134]

145 Mr Horman acknowledged that the information about the Star City exclusion did not come from Mr Kakavas during that conversation.[135] Mr Myers submitted that this was significant: it demonstrates, he argued, that Mr Horman was obtaining information about the plaintiff's status, and in particular his interstate exclusions, from his own sources.

146 Mr Craigie, who at this time was Crown's Chief Operating Officer, acknowledged that he must have received and read a copy of this memorandum, although he said he could not recall it.[136] In particular, he could not recall the reference to the Star City exclusion.[137] He could not remember taking any action as a result of receiving this document, nor did he ask Mr Horman any questions about it; he was content to let the other recipients deal with the matter.[138]

147 Relying on diary entries in the court book,[139] the plaintiff thought that on or about 5 or 6 December 2000 he asked Mr Bill McHarg, a close personal friend and mentor who also knew Mr Horman, to speak to the latter on his behalf.[140] Mr Kakavas first met Mr McHarg, then the Managing Director of Colliers Jardine, in 1991. They have since remained friends. The evidence is clear, however, that the plaintiff was prepared to exploit his mentor by accepting his help while not keeping him fully informed. Thus, although he had a hidden agenda which would undermine his friend's position, he allowed Mr McHarg to press Mr Horman for permission to return to those parts of Crown's premises that were not part of the Casino itself. Mr McHarg was prepared to do this because it was in conformity with his view that the plaintiff must not gamble. But the plaintiff had a different end in mind. He described it in the following terms:

I asked Mr McHarg to see if he could get me into the entertainment areas first because Crown Casino was being very difficult and didn't want me coming into the Casino for gambling, so I was trying to break the ice by trying to get into the entertainment area first.[141]

148 In another aspect of his evidence that does not support his credibility, Mr Kakavas said that he did not ask Mr McHarg to emphasize that he was a wealthy and successful property developer; if Mr McHarg told Mr Horman that the plaintiff was "travelling well", that was not something Mr Kakavas told him to do.[142] Yet this was one of Mr Kakavas' strong points; and, as is apparent from his willingness to use a friend in pursuit of a strategy designed to thwart that friend's concern about his return to gambling, the plaintiff was similarly prepared to play every card he could if he thought that would advance his purpose. Mr McHarg was not called as a witness.

149 Mr Horman gave evidence that he spoke to Mr McHarg about the plaintiff on several occasions during 2000. He recalled that Mr McHarg was keen to see the plaintiff return to the Crown complex, but conceded that Mr McHarg was "equally keen not to see him resume gambling".[143]

150 Mr Horman did meet with Mr McHarg, who told him that Mr Kakavas was successful in his business and wanted to return to Crown, "not for the purpose of gambling but for the purpose of business and speaking with clients."[144] Mr McHarg mentioned that the plaintiff had self-excluded from Jupiters Casino. Mr Horman also described the substance of this conversation in an email sent on his behalf to Mr Craigie and to Mr Andrew McDonald, at the time either Crown's head of surveillance or head of table games. The email was dated 22 December 2000 and, so far as is relevant, was in the following terms:

He [Mr McHarg] confirmed that Harry K. has recently been successful in a number of property projects and is "cashed up" - and indicated that he is concerned that Harry K., although he is saying he does not want to be able to return to Crown for gambling purposes and counselled Harry to that effect. Harry rejected a possible compromise raised by Mr McHarg that he again self-exclude himself from Crown if Crown was prepared to agree to his request that the withdrawal of his licence be revoked.[145]

Mr Horman also noted in that email that the plaintiff:

... was recently excluded from Star City by the requirement of the NSW Police Commissioner. Interestingly, Mr Kakavas was recently self-excluded from Jupiters.[146]

151 Mr Craigie could not recall reading this email. However, during cross examination he conceded an obvious point: if he did read it, he was at that time and by that means alerted to the plaintiff's potential gambling problems.[147]

152 Mr Horman's knowledge of the Jupiter exclusion is also apparent from the contents of an email that he sent on or about 10 November 2000[148] to Detective Sergeant Murray Aldred, who was in charge of the Casino Crime Unit. In that email Mr Horman correctly recorded that:

... the position from Jupiters is:

* self-excluded on 281297

revoked on 190898

* self-excluded on 060800

self-exclusion still current (101100)[149]

153 The approach by Mr McHarg did not bear fruit. The plaintiff therefore instructed Mr Defteros to take action in relation to both the Crown WOL and the Star City exclusion. According to his diary this occurred on 3 January 2001.[150] He also left a message for Mr Horman informing him that he had taken this step.[151] Letters were subsequently sent by Pryles & Defteros on behalf of their client on or about 25 January 2001 to Mr Horman and to the NSW Police Commissioner.[152] The letter to Mr Horman, couched as a request, sought an indication of whether the plaintiff would be allowed to enter the complex "to attend the restaurants, bars and cinemas without any access to any of the gaming venues."

154 On or about 1 February 2001, Mr McHarg sent a note to Mr Horman attaching a newspaper article about the plaintiff and his activities in the Gold Coast property market. It was headed "Hey, big spender". Mr McHarg's note reads:

Harry has made the application for limited entry as you suggested, I can't foresee any downside.

The enclosed article describes his new role in property - he has a feel for it & is doing very well.[153]

155 The reference in this note to "the application for limited entry" is curious. It was not explored in the evidence. If the plaintiff did indeed make the application to which Mr McHarg refers, then it would be important to know what became of it. If he did not, the proper inference is, it seems to me, that he was interested in returning to Crown, but only on the basis that he could gamble when he did.

156 It was put to Mr Horman that it was he who suggested that the "application for limited entry" be made. He could not recall doing so, but conceded that it was possible.[154]

157 Following the conversations between Messrs Horman and McHarg, the plaintiff said that he made no further attempt to persuade either Mr Horman or anyone else at Crown to let him come back. By that stage, he said, he had come to the conclusion that Crown would never accept him as a patron, "so ... I formed the view that I was just wasting my time and I never once after that made a request to be allowed in to the Casino for gambling purposes after 2001."[155]

158 The plaintiff nonetheless continued to gamble elsewhere. In 2001 his gambling pursuits took him to the Burswood Casino in Perth, to the Adelaide Casino, perhaps to one of the casinos in Tasmania, and to the casino in Townsville.

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Judgment (1253 paragraphs)

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