…
(g) a person who is at or in the vicinity of the casino and is an agent of the casino operator or a casino employee must not induce patrons to enter the casino or take part in gaming in the casino…"
30 Section 70 creates an obligation on the holders of the casino licence not to induce patrons to take part in gambling at the casino and failure to do so will be considered a contravention of a condition of the licence. It does not seem that this section is intended to apply to persons who attend the casino and are subject to inducements but rather it is intended to establish whether a casino operator has complied with the conditions of its licence and if it hasn't it is liable to a penalty. Section 70 may be considered with regulation 20. While the plaintiff's case in relation to s 70 is weak, I cannot conclude that it is untenable or hopeless. For the reasons given in para (28) of my judgment, it is my view that the plaintiff's claim in respect of s 70 of the Act should not be struck out and it should be allowed to proceed to trial.
31 The defendants submitted that the claim in negligence is for pure economic loss and there is no recognised category of case which establishes that a duty of care exists and on this basis the statement of claim should be struck out. According to the defendant, because the loss is pure economic loss, the fact that it is foreseeable that someone who gambles money at a casino might lose money is insufficient to impose a duty of care. According to the defendant, there has to be something more than the foreseeability of loss from the plaintiff being a patron at the casino to establish a duty of care. It could be argued by the plaintiff that he claims not only economic loss in the sense referred to by the defendant but by reason of his psychiatric condition has suffered loss of commissions or wages. If that be the case, it has not been pleaded properly. The plaintiff is not just claiming purely economic loss but also alleges that his anxiety and depression was caused by the defendant's alleged negligence.
32 In relation to a claim for economic loss caused by negligence the High Court in Bryan v Maloney (1995) 182 CLR 609, (Mason CJ, Dean and Gauldron JJ) at p 618 held:
"…the field of liability for mere economic loss is a comparatively new and developing area of the law of negligence. In that area, the question whether the requisite relationship of proximity exists in a particular category of case is more likely to be unresolved by previous binding Authority with the consequence that the "notion of proximity … is of vital importance". As Stephen J indicated in Caltex Oil (Australia Pty Ltd v The Dredge "Willemstad" , it is the "articulation", in the different categories of case, "of circumstances which denote sufficient proximity" with respect to mere economic loss, including "policy considerations", which will gradually provide "a body of precedent productive of the necessary certainty". Inevitably, the policy considerations which are legitimately taken into account in determining whether sufficient proximity exists in a novel category will be influenced by the courts' assessment of community standards and demands.
One policy consideration which may militate against recognition of a relationship of proximity in a category of case involving mere economic loss is the law's concern to avoid the imposition of liability "in an indeterminate amount for an indeterminate time to an indeterminate class". Another consideration is the perception that, in a competitive world where one person's economic gain is commonly another's loss, a duty to take reasonable care to avoid causing mere economic loss to another's person or property, may be inconsistent with community standards in relation to what is ordinarily legitimate in the pursuit of personal advantage. The combined effect of those two distinct policy considerations is that the categories of case in which the requisite relationship of proximity with respect to mere economic loss is to be found are properly to be seen as special. Commonly, but not necessarily, they will involve an identified element of known reliance (or dependence) or the assumption of responsibility or a combination of the two."
33 In Hill v Van Erp (1996-97) 188 CLR 159, the High Court considered the concept of proximity where the loss was an economic one. The concept of proximity as an identifier of a duty of care at common law has been subject to recent judicial criticism - see Kirby J in Pyrenees Shire Council v Day (1998) 192 CLR 431.
34 In relation to whether it can be argued that there is proximity between the parties, this enquiry is directed to the relationship between the parties. It involves the notion of nearness or closeness, and embraces physical proximity (in the sense of space and time) between the person or property of the plaintiff and the person or property of the defendant, circumstantial proximity and causal proximity. The plaintiff submitted that on the facts pleaded in this case the requirement of proximity in the relationship between the plaintiff and the defendant is satisfied. According to the plaintiff, at the times when the tort is alleged to have occurred there was undoubtedly physical proximity between the plaintiff and the defendant, its servants or agents. The plaintiff was gambling in premises under the exclusive care, control and management of the defendant. The defendant through its servants or agents is alleged to have induced the plaintiff by speaking to him, physically supplying him with complimentary products, services and privileges and providing a cheque cashing facility and alcohol at the premises in question.
35 According to the plaintiff circumstantial proximity is also present on the facts pleaded in the statement of claim. At the relevant time there was a relationship between the casino as provider of gambling facilities, services and alcohol on the one hand and the plaintiff as a consumer of such facilities, services and alcohol on the other. The plaintiff submitted that there are causal connections between the acts of the defendant complained of in the statement of claim (namely inducing the plaintiff to gamble and allowing him to gamble whilst intoxicated from alcohol provided by the defendant to him on its premises) on the one hand and the injuries and economic loss which he suffered in consequence of such acts on the other.
36 The plaintiff also submitted that another factor in favour of the existence of the necessary proximity on the facts pleaded is the circumstance that the class of persons (of which the plaintiff is one) to whom the duty is owed by the operator of the casino is readily ascertainable; it consists of all patrons who are permitted entry to the casino in question. According to the plaintiff even if this were a case of pure economic loss the fact that the defendant through its servants or agents, as the controller and manager of the casino had the knowledge or means of knowledge that the plaintiff as a particular person, not merely as a member of an unascertained class, would be likely to suffer economic loss as a consequence of the casino's negligence, would be a factor in favour of the recovery of damages for pure economic loss.
37 I accept that from the plaintiff's submissions referred to above, it is arguable and that there is a relationship of proximity that can be seen as special as between the casino licence operator and the gambler who is offered with inducements in excess of that which can be expected in the commercial world and allows or encourages a gambler to continue to gamble while he is intoxicated.
38 The defendant also submitted that there is no arguable duty of care and no breach concerning the offering of inducements. According to the defendant the offering of inducements is an ordinary part of commercial activity and there is no duty of care on a casino operator to refrain from inducing people to come to the premises to gamble there. This in my view does not take into account the duty of care a casino operator may owe to a person who is intoxicated and induced to gamble. Regulation 20 prohibits certain inducements and specifically refers to the provision of liquor free of charge. The defendant may owe a greater duty of care where the patron is heavily intoxicated, his reasoning is impaired and he does not appreciate the consequences of offering inducements where the defendant knows the plaintiff is heavily intoxicated maybe considered to go beyond ordinary commercial activity.
39 It can also be argued that the risk of a psychiatric injury and economic loss to a patron of the defendant's casino as a result of a failure to take reasonable care by the casino operator was reasonably foreseeable by a reasonable person in the position of the defendant. It can also be argued that the risk of injury was not far fetched or fanciful.
40 It is my view that the plaintiff's claim in negligence cannot be said to be hopeless or untenable and it should be permitted to proceed to trial.
41 Finally the defendant submitted that para (8)(c) of the statement of claim which refers to the inducement of supplying a cheque cashing facility for the plaintiff, should be struck out because s 75 permits such a facility. Section 75 does permit a cheque cashing facility but it is argued that this facility although permitted, is one of the factors that formed part of the inducement. It should be allowed to go to trial.
42 In the light of Brennan J's comment in Maloney that liability for mere economic loss is a comparatively new and developing area of the law in negligence and Master Allen's (as he then was) comments in Contribution Fund of Australia, I take into account the court should be particularly astute not to risk stifling the development of the law and this is a further reason why the claim should be permitted to go to trial.
43 I turn now to the defendant's submission in relation to the inadequacy of the pleading. The onus is on the plaintiff in the statement of claim to set out the facts upon which the defendants can become aware of the precise allegations made against them and hence what is it that they have to meet. If a fact is material, it must be pleaded and not merely referred to in particulars - see H 1976 Nominees Pty Ltd v Galli Ltd & Quarries Ltd (1979) 30 ALR 181 at 186 and 187.
44 In relation to the pleading of negligence, the defendant submitted that the pleading of duty of care in para (10) of the statement of claim was inadequate. The defendant also submitted that para (13) as currently pleaded is inadequate because no factual basis has been pleaded for the award of aggravated damages and these damages are generally not available in negligence. Also the defendant submitted that facts which found the claim for exemplary damages (also in para (13) of the statement of claim) should be pleaded. In relation to interest the defendant says that the plaintiff's claim for interest on the whole of the awards from 1 January 1997 to date of judgment is not supported by any facts and should be struck out.
45 In relation to whether the duty of care is sufficient, paragraphs (1) to (4) of the statement of claim pleads that the defendant carries on business as the operator of a casino licence and in 1996 and 1997 operated premises trading as Sydney Harbour Casino and as from about November 1997 it operated from Pyrmont trading as Star City. Paragraph (7) pleads that the plaintiff was a patron of both the Harbour Casino and the Star City Casino. It is clear that the alleged duty of care that is pleaded is one arising between the operator of a casino licence and a patron. Whether such a duty of care exists is a matter for legal argument. Paragraph (10) is properly pleaded.
46 I turn to the difference between aggravated and exemplary damages which was discussed in Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 at 149 Windeyer J said:
"aggravated damages are given to compensate the plaintiff when the harm done to him by a wrongful act was aggravated by the manner in which the act was done: exemplary damages, on the other hand, are intended to punish the defendant, and presumably to serve one or more of the objects of punishment - moral retribution or deterrence."
47 In relation to aggravated damages, the defendant referred to a passage in Halsbury's Laws of Australia ((1999) edition Reed International Books trading as Butterworths at para 135-595). This passage states that aggravated damages are recoverable in trespass, defamation, conspiracy, malicious prosecution and inducing breach of contract. It does not refer to breach of statutory duty but in a recent Court of Appeal decision Collings Constructions Co Pty Ltd & Anor v ACCC (1998) 43 NSWLR 131 (referred to later in this judgment) it was held that aggravated damages can be awarded for breach of statutory duty. However Halsbury states that the absence of any element of damage at large will generally exclude an award of aggravated damages in negligence.
48 The passage cites Kralje & Anor v McGrath & Anor [1986] 1 All ER 54 as authority for this proposition. Kralje concerned an obstetrician who negligently delivered the plaintiff's baby who was a twin. The baby Daniel died as a result of injuries 9 weeks after birth. At p 61 Woolf J (as he then was) held that it would be wholly inappropriate to introduce into claims for breach of contract and negligence the concept of aggravated damages. His Honour's reasoning was as follows. If aggravated damages were to apply in this situation of a doctor not treating a patient in accordance with his duty, whether under contract or in tort, then he would consider that it must apply in other situations where a person is under a duty to exercise care. It would be difficult to see why it could not even extend to cases where damages are brought for personal injuries in respect of driving. If the principle is right, a higher award of damages would be appropriate in a case of reckless driving which caused injury than would be appropriate in cases where careless driving caused identical injuries. Such a result seemed to him to be wholly inconsistent with the general approach to damages in this area, which is to compensate the plaintiff for the loss that she had actually suffered, so far as it is possible to do so, by the award of monetary compensation and not to treat those damages as being a matter which reflects the degree of negligence or breach of duty of the defendant. Thus it would appear that aggravated damages are not available in claim for negligence.
49 In order for the defendant to meet the plaintiff's claim for exemplary damages the matters which found this claim should be pleaded. The claim for exemplary damages as currently pleaded cannot be sustained and should be struck out. However it is my view that the plaintiff should be afforded a further opportunity to replead these claims for damages provided he included the alleged factual bases for the alleged entitlement.
50 Aggravated damages can be awarded for breach of statutory duty but as previously stated it depends on the wording of the statute as to whether a breach will found an action and whether the remedy is available. If the statute does supply a remedy, the presumption is to use the remedy supplied (Halsbury's Law of Australia (1996) (Butterworths Vol 124 at para 385-580).
51 In Collings, the Court of Appeal awarded aggravated damages for breach of statutory duty because s 87 of the Trade Practices Act 1974 (Cth) should not be narrowly interpreted as a measure of damages in tort or contract, but provided for compensatory damages and aggravated damages are compensatory in nature (see Cole JA with whom Stein JA and Sheppard AJA agreed at p 156G). The nature of s 87 of the Trade Practices Act is very different from that of ss 70 and 163 of the Casino Control Act.
52 As the claim for aggravated damages is currently pleaded, it is difficult to see how this claim can be sustained and it should be struck out. Perhaps the plaintiff is alleging that the actions of the defendant in allowing the plaintiff to continue to gamble while intoxicated and suffer further losses aggravated his psychiatric condition. If this is the case, it should be pleaded.
53 Lastly, in relation to interest it is claimed from 1 January 1997 which dates from about the time that the plaintiff first attended the casino. The defendant does not know whether the interest is claiming for gambling losses or some other loss eg., past loss of wages or commissions due to the plaintiff's alleged psychiatric condition, nor does it know at what rates interest is claimed, whether it is at Supreme Court rates in accordance with Schedule J or market rates. It is my view the claim in relation to interest as currently pleaded should be struck out. The plaintiff should be given a further opportunity properly plead its claim in relation to interest.
54 It is also my view that the plaintiff should properly plead the amount of the gambling loss and how this amount is calculated. Accordingly, paragraphs (12)(a), (13) and (14)(b) of the statement of claim filed 8 September 1998 should be struck out. The plaintiff should be given a further opportunity to properly replead these paragraphs in an amended statement of claim.
55 The defendant was unsuccessful in relation to its attempt to have the plaintiff's claim for breaches of statutory duty and negligence struck out. It was legal argument directed to the strike out that took most of the court's time. However, the defendant has had a small measure of success as the plaintiff has been ordered to replead certain paragraphs of the statement of claim. In these circumstances it is my view that the appropriate order for costs is that costs be costs in the cause.
56 The orders I make are: