Preston v Star City Pty Limited

Alexander Preston (Plaintiff) PARTIES :

Star City Pty Limited (Defendant) JUDGMENT OF : Master Harrison

Mr P Semmler QC with Mr J Keesing and Mr J Naiman COUNSEL : (Plaintiff)

Mr J Campbell QC with Mr S Gageler (Defendant) Gells Sydney (Plaintiff) SOLICITORS : Norton Smith & Co, Sydney (Defendant) CATCHWORDS : Strike out statement of claim Supreme Court Rules - Pt 15 r 26 Casino Control Act 1992 (NSW) Liquor Act 1982 (NSW) ACTS CITED : Liquor Act 1912 (Qld) Motor Traffic Act 1909 (NSW) Interpretation Act 1987 (NSW) Trades Practices Act 1974 General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 Air Services Australia v Zarb (NSWCA unreported, 26 August 1998) Dey v Victoria Railway Commissioners (1948-49) 78 CLR 62 General Steel and Webster & Anor v Lampard (1993) 177 CLR 598 Gibson v Parkes District Hospital (1991-92) 26 NSWLR 9 Sovar v Henry Lane Pty Limited (1966-67) 116 CLR 397 Stubbs v NRMA Insurance Ltd (1997) 42 NSWLR 550 Chordas v Bryant (Wellington) Pty Limited (1988) 20 FCR 91 CASES CITED : Soutter v P & O Resorts Pty Limited & Anor (unreported, Court of Appeal Queensland 13 March 1998) Abela v Giew (1965) 65 SR (NSW) 185 Bryan v Maloney (1995) 182 CLR 609 Hill v Van Erp (1996-97) 188 CLR 159 Pyrenees Shire Council v Day (1998) 192 CLR 431 H 1976 Nominees Pty Ltd v Galli Ltd & Quarries Ltd (1979) 30 ALR 181 Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 Collings Constructions Co Pty Ltd & Anor v ACCC (11998) 43 NSWLR 131 Kralje & Anor v McGrath & Anor [1986] 1 All ER 54 DECISION : See para 56

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20334/98 - ALEXANDER PRESTON v STAR CITY PTY LIMITED

JUDGMENT (Strike out statement of claim) 1 MASTER: By notice of motion filed 15 December 1998 the defendant seeks to have the statement of claim struck out or alternatively that paras (5), (6), (8) and (9) of the statement of claim be struck out pursuant to Part 15 r 26 of the Supreme Court Rules. The argument is essentially a legal one. 2 By statement of claim filed 8 September 1998 the plaintiff alleges that he was a patron of the casinos operated by the defendant trading as Sydney Harbour Casino and Star City Casino between about November 1996 to approximately March 1998. 3 Between January 1997 and approximately March 1998 the plaintiff alleges that the defendant breached its statutory duties and was negligent by inducing the plaintiff to gamble in its casino particularly when he was intoxicated. The particulars given for the breaches of duty of care and/or negligence and offering of inducements are similar. The inducements are alleged to be informing the plaintiff that if he remained a "high roller" patron of the casino the defendant would make available to the plaintiff or his nominees business contracts for the benefit of the plaintiff in the form of a contract for designs of merchandise bearing the logo of Star City and other designs; a contract for the purchase of works of art for Star City premises; a contract for supply of a painting; a Christmas gift package for all VIP members (approximately 12,000 to 15,000); appointment as a licensee to manufacture and sell products bearing the logo of Star City; supplying complimentary products, services and privileges to the plaintiff and supplying a cheque cashing facility for the plaintiff. The plaintiff claims that he suffered gambling losses of in excess of $3,000,000 (although this amount does not appear in the statement of claim it has been particularised), depression and anxiety. In addition, he claims aggravated and exemplary damages and interest. No defence has been filed. 4 Part 15 r 26 of the Supreme Court Rules provides: "(1) Where a pleading - (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;

(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or

(c) is otherwise an abuse of the process of the Court, the Court may at any stage of the proceedings, on terms, order that the whole or any part of the pleadings be struck out.

(2) The Court may receive evidence on the hearing of an application for an order under subrule (1)." 5 In General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 Barwick CJ, who heard the application alone, at p 29 stated: "Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed." 6 Barwick CJ referred to Dixon J's passage quoted at p 130. "It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of cause of action - if that be the ground on which the Court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense." 7 In a recent decision in Air Services Australia v Zarb (NSWCA unreported, 26 August 1998) Rolfe AJA found it useful to remind himself of the highly demanding test imposed on a party seeking summary judgment. His Honour referred to Dey v Victorian Railway Commissioners (1948-49) 78 CLR 62, General Steel and Webster & Anor v Lampard (1993) 177 CLR 598. 8 Master Allen (as he then was) in Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at pp 373-374 said: "…It is not by any means rare in the history of the development of the common law that a high appellate court, in enunciating a novel development in the law, albeit one avowedly based on a miscellany of old cases, has chosen to use general words of imprecise limits in meaning to facilitate the arrival, in later cases, of the final form of the development without the need to overrule what earlier had been stated. That being so I am of opinion that a court at first instance should be particularly astute not to risk stifling that development of the law by summarily throwing out of court actions in respect of which there is a reasonable possibility that it will be found, in the development of the law, still embryonic, that a cause of action does lie. The risk of injustice to the plaintiff, which summary termination of his claim would entail, is real. One cannot predict, with firm assurance, what the future holds as the final formulation of the new development." 9 This passage was quoted with approval by Justice Badgery-Parker in Gibson v Parkes District Hospital (1991-92) 26 NSWLR 9 at p 35. 10 The defendant submitted that the plaintiff's claim for breaches of statutory duty should be struck out. According to the defendant, the Casino Control Act 1992 (NSW) (the Act) operates to make lawful the conduct of gaming in a casino. This is done on the basis that there is only one casino, the Casino Control Authority (the Authority) is paid casino duty, and a casino benefit levy, and extensive and minute controls are imposed on all aspects of the casino. The objects of the Authority are set out in s 140 of the Act (to which I will refer later in this judgment) and the functions of the Authority are set out in s 141 of the Act. Section 141 (4) specifically states that the Authority in the exercise of its functions is not required to observe the rules of natural justice (except to the extent that it is specifically required to do so by the Act). However, the Authority has wider obligations to report to Parliament that do most statutory authorities - see s 154. 11 According to the defendant the Act is unique. The extent to which the courts have power to intervene in the operations of the casino has been referred to in the Act. The court can grant an injunction, at the suit of the Authority, concerning contraventions of the Act, or contraventions of a condition of the licence. There is no specific power for an individual to seek damages. According to the defendant, the powers of the Authority are so extensive, and the nature of the legal obligations that are imposed on the casino operator are so closely defined that the statute cannot be constructed as intending to give a private right of action for damages in addition to any obligation which are expressly imposed on the operator. 12 The plaintiff has specifically pleaded two breaches of statutory duty namely breaches of ss 70 and 163 of the Act. 13 In relation to the law as to whether a breach of the statutory duty gives rise to a private right the parties referred me to Sovar v Henry Lane Pty Limited (1966-67) 116 CLR 397 and Stubbs v NRMA Insurance Ltd (1997) 42 NSWLR 550. In Sovar Kitto J at p 405 stated: "…The intention that such a private right shall exist is not … conjured up by judges to give effect to their own ideas of policy and then 'imputed' to the legislature. The legitimate endeavour of the courts is to determine what inference really arises, on a balance of considerations, from the nature, which it is directed, the nature of the conduct prescribed, the pre-existing state of the law, and, generally, the whole range of circumstances relevant upon a question of statutory interpretation." 14 The above quote was cited with approval in Stubbs at p 555. 15 The plaintiff submitted that in ascertaining whether the breaches of statutory duties confer private rights is to be considered in the light of policy decisions made in relation to the Act. The plaintiff's counsel referred me to portions of the report entitled "Inquiry into the Establishment and Operation of Legal Casinos in New South Wales" by The Honourable Sir Laurence Street AC KCMG dated 27 November 1991 (the report) and the second reading speech in relation to the Casino Control Bill in the Legislative Assembly on 5 March 1992 (the second reading speech). At para 4.4.23 of the report, Sir Laurence Street referred to the impact of problem gambling on individuals and families. There was evidence made available to him which revealed that the impact of problem gambling on individuals and families is significant. Numerous submissions from churches and other institutions and individuals also expressed strong views regarding the consequences of introducing casinos. Some were opposed to casinos on moral grounds alone. Many were concerned about the social harm caused by gambling in the community. Sir Laurence Street, after having discussions with counsellors, Gamblers Anonymous and Gam-Anon members, and obtaining evidence from other experts and from the academic literature took heed of these expressions of concern. Sir Laurence Street referred to and was satisfied that for the problem gambler, for his or her family and close associates and for society at large, there are serious human costs. 16 At p 69 at paras 4.6.12 and 4.6.13 Sir Laurence Street refers to junkets and other inducements. At para 4.6.13 he says that many casinos provide inducements to gamblers to attract them to casinos or, keep them there or once there to keep them gambling. These include free transportation, free meals, drinks and accommodation. Concerns had been raised that these inducements play on a problems gambler's delusions of grandeur and assist in the loss of control. Gamblers Anonymous members confirmed that casinos would go to great lengths to hold onto a "good loser". Sir Laurence Street suggested that these were strong reasons for developing guidelines in regard to the provision of inducements generally and he recommended that the Authority give consideration to this. 17 At para 4.7 Sir Laurence Street commented upon the statutory objects of the Authority. He said that the draft Bill conferred extensive powers on the Authority. He commented that there was no express reference to what may be called the humanitarian aspects of operating casinos. He suggested that the objects of the Authority be extended to include ensuring that the consumer protection initiatives be introduced, and that all reasonable steps should be taken to contain and control the potential of casinos to cause harm to the public interest and to individuals and families. It can be argued that as a result of Sir Laurence Street's recommendation, s 140(d) was included in the Act. 18 At p 516 of the Hansard Report Mrs Cohen who was the then Chief Secretary and Minister for Administrative Services (Chief Secretary) referred to benefits to the community that the casino would bring. She referred to employment opportunities both through the construction and operation of casinos and she said that one could see that the casino would be of value to New South Wales. However, she recorded that the government had been concerned about the social impact of the legal casino gambling and the very fact that it established the public inquiry was testimony to this. She acknowledged that gambling related problems exist in our community and that is the unfortunate reality. 19 The Chief Secretary referred to Sir Laurence Street's recommendation that the draft legislation be amended to widen the objects of the proposed Authority to ensure that all reasonable steps be taken to contain and control the potential of casinos to cause harm to the publics' interests and to individuals and families. She predicted that whilst it was impossible to estimate the exact numbers that would be affected the introduction of legal casinos would increase the number of problem gamblers and increase the demand for social and related services. The Chief Secretary suggested that this was a logical conclusion for Sir Laurence to draw and that the government did not shy away from that reality and was prepared to tackle the problems. She listed the steps to be taken including the introduction of guidelines to cover inducements provided by casino to gamblers. The plaintiff also referred to an article written by Robert Solomon and John Payne entitled "Alcohol Liability in Canada and Australia: Sell, Serve and be Sued" which was published in Tort Law Review November 1996 at p 188. 20 Firstly I turn to consider s 163 of the Act. The relevant parts of that section state: "163 Conduct in casino

(1) A casino operator must not: (a) permit intoxication within the gaming area of the casino , or

(b) permit any indecent, violent or quarrelsome conduct within the gaming area of the casino , or

(c) permit an intoxicated person to gamble in the casino. Maximum penalty: 100 penalty units.

(2) A member of the staff of a casino must not: (a) sell or supply liquor to an intoxicated person who is in the gaming area of the casino, or

(b) permit an intoxicated person to gamble in the casino . Maximum penalty: 20 penalty units.

(3) If a person within the gaming area of a casino is intoxicated, the casino operator is taken to have permitted intoxication within the gaming area unless it is proved that the casino operator took all reasonable steps to prevent intoxication within the gaming area." 21 As previously stated s 140 sets out the objects of the Authority. One of the objects of the Authority is to obtain and administer systems for the licensing, supervision and control of the a casino. Subsection 140(d) places an obligation on the Authority to contain and control the potential of a casino to cause harm to the public interest and to individuals and families. Regulation 20 provides: "20 Certain inducements prohibited

(1) A casino operator, a casino employee or an agent of the casino operator must not provide a casino patron with liquor free of charge (or at a substantial discount) unless the liquor is provided in accordance with any direction that the Authority may from time to time give to the casino operator for the purposes of this clause. Maximum penalty: 50 penalty units.

(2) Subclause (1) does not apply in respect of liquor provided to a casino patron in: (a) an area of the casino designated (in the plans, diagrams and specifications for the time being approved by the Authority under section 65 of the Act) as other than the general casino area, or (b) a part of the general casino area that is for the time being reserved (as indicated by means of ropes and signs) for the use of certain casino patrons only." 22 The statement of claim as currently pleaded does not allege a breach of Regulation 20. 23 The defendant submitted that even if it were to be accepted that the purpose of s 163 included protecting the intoxicated person from financial loss, it does not follow that a private right of action is to be implied. The defendant suggested that the circumstances where the courts have recognised an implied right to bring an action for damages for breach of statutory duty have mainly been in the area of regulation of standards of work where employees suffer physical injury. According to the defendant where a casino is open to the public there are no particular class of persons who are sought to be protected by s 163. This is a requirement for the existence of an action for breach of statutory duty. On the other hand the plaintiff submitted that proper construction of s 163 is not directed only at patrons of the casino but is plainly intended to be for the benefit and protection of a particular class of persons namely those who gamble or continue to gamble while intoxicated. 24 The defendant asserted that an analogous provision to s 163 is s 125(3) of the Liquor Act 1982 (NSW) which states "a person (whether or not he or she is a licensee) shall not, on licensed premises, sell or supply liquor to any person who is at the time, in a state of intoxication." Section 125(3) is similar to s 46 of the Liquor Act 1912 (NSW) which provided "If any licensee permits drunkenness … to take place in his licensed premises he should be liable … to a penalty." 25 The defendant referred to the authorities of Chordas v Bryant (Wellington) Pty Limited (1988) 20 FCR 91 at 102 and Soutter v P & O Resorts Pty Limited & Anor (unreported, Court of Appeal, Queensland 13 March 1998). In Chordas the full Federal Court considered whether s 79 of the Liquor Ordinance conferred a private right of action for damages. The Federal Court of Appeal referred to Sovar and then said that s 79 appeared in an ordinance which was intended to protect the public interest by regulating the sale of intoxicating liquor, so as to protect those who by over indulgence or because of youth or mental ill-health are at risk from its abuse. The court referred to Abela v Giew (1965) 65 SR (NSW) 185 where it was held that a breach of like regulations, those made under the Motor Traffic Act 1909 (NSW), did not confer any private right of action upon persons injured by reason of a breach thereof. The court concluded that for similar reasons s 79 did not confer a private right of action for damages resulting from its breach. Section 79 was enacted in the general public interest not for the protection for persons who may be injured by the conduct of intoxicated persons. 26 In Soutter the court interpreted s 78 of the Liquor Act 1912 (Queensland). The appellant was struck while standing on a dance floor by an energetic dancer. It held that in the present case it may well have been reasonable to treat the statute as intended to protect a particular class of persons, namely the respectable patrons of the licensed premises, from harm or annoyance as may be caused by the presence of disreputable characters, thieves drunkards and so forth. But the court held that it appeared a difficult step to go further to say that one should impute to the legislature an intention to grant a civil cause of action. One of the reasons for the reluctance to do so was that the categories of people who are to be kept off the premises are rather broadly indicated and that it was hardly to be expected a licensee would be able to discern without considerable investigation whether any of the customers on the premises from time to time might fall within one of the categories and it held that the provision in question did not rise to a civil action for its breach. 27 The plaintiff alleges that he became intoxicated to such an extent that he was physically sick in the toilets and fell over in the VIP room. It is my view that it is arguable that the liquor cases can be distinguished in that the liquor legislation is concerned with the consumption of alcohol not problems that can be caused when the consumption of alcohol is combined with gambling in a casino. It can also be argued that s 163 is directed to a particular class of persons namely those gamblers who are intoxicated and not the public at large. The difficulties experienced by an intoxicated gambler have been referred to in policy documents and the second reading speech relating to the Act. 28 As to whether a breach of s 163 gives rise to a private right, it is necessary to consider s 163 in the light of the other provisions of the Act including s 143(d) which specifically refers to one of the objects of the Authority as being to contain and control the potential of the casino to cause harm to the public interest and to individuals and families. Section 163 (and s 70) of the Act may be considered in the light of the policy considerations such as the second reading speech and the report that gave rise to those provisions (see s 34 of the Interpretation Act 1987 (NSW)). Also, an intention to create a private right may arise on a balance of considerations and a whole range of circumstances. Without those facts and circumstances and the conduct of the parties being known, I cannot conclude that the plaintiff's argument in relation to s 163 action is untenable. Further, the obligation and responsibilities that casino operators and the Authority to have towards patrons particularly in circumstances where the patrons become intoxicated and continue to gamble have not been the subject of judicial determination. For these reasons, the argument that a breach of s 163 may give rise to a private right should be permitted to go to trial 29 I turn now to s 70 of the Act which provides: "70 Conduct of gaming

(1) It is a condition of a casino licence that the following provisions are complied with in the casino and the casino operator is to be considered to have contravened that condition if they are not complied with:

… (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:

(1) The defendant's notice of motion filed 15 December 1998 is dismissed.

(2) Paragraphs (12)(a), (13) and (14)(b) of the statement of claim are struck out. The plaintiff has a further opportunity to replead his claims in respect of aggravated and exemplary damages, interest and gambling losses.

(3) The plaintiff is to file and serve an amended statement of claim within 28 days.

(4) Costs of the motion are costs in the cause. **********

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