(Rule 19(e), like rule 19(f), is concerned with a "Syndicate Entry" and may be ignored.)
43 There is also a provision concerned with inconsistency between the content of a "Ticket" and the content of Lotteries' computer records. Rule 6(e) provides:
"In the event that the details recorded on the Player's or Syndicate Player's Ticket are not consistent with the details held by the Licensee by way of Computer Records then the latter shall apply to the exclusion of the former and shall determine what Prize, if any, the Player or Syndicate Player shall be entitled to and the Player or Syndicate Player shall be bound by any such determination."
44 The definition of "Computer Records" in rule 1(a) is:
"'Computer Records' means the sum of information which is provided to the Licensee by way of the Licensee's central processing computer equipment in respect of a Player or Syndicate Player and in respect of details of:
(1) a Player's Entry in a Game of OZ Lotto;
(2) a Syndicate Entry and a Syndicate Player's Syndicate Entry Share in a Game of OZ Lotto; and
(3) where appropriate a Player's entry in a Game of Promotional OZ Lotto."
45 The rules contain provisions excluding liability of Lotteries and agents in certain circumstances. It will be necessary to consider these, as well certain other rules not so far mentioned, as particular issues are addressed.
Did Mr Reinhold have an "Entry" for the six winning numbers?
46 As I have said, allocation of and entitlement to prizes under the Oz Lotto Rules is by reference to "Entries" (although, as will be seen in the discussion of rule 14(l), the ability to produce a "Ticket" and to quote its TSN is a prerequisite to actually obtaining a prize). To succeed in his principal claim (that is, the claim to be paid the prize of $200,000,000), Mr Reinhold must show that he had an "Entry" consisting of the game numbers in one of the game panels appearing on the face of Ticket B, being the six numbers drawn in Oz Lotto Draw 605.
47 An "Entry" is a set of game numbers that satisfies the several criteria in the rule 1(a) definition of "Entry", that is
(a) the numbers "have been recorded in the central processing computer system";
(b) the numbers "have been selected by way of an Entry Form or Automatic Entry";
(c) the numbers "(subject to Rule 6(e)) have been imprinted on the same numbered line on a Ticket"; and
(d) a "Fee" has been paid in respect of the numbers.
48 There is no issue about criterion (b) and criterion (d), so far as the game numbers on Ticket B are concerned. It is not in dispute that, since Ticket B was an "Autopick" ticket, the numbers on it were selected by "Automatic Entry", as defined by rule 1(a). Nor is it disputed that a "Fee" was paid by Mr Reinhold in respect of the numbers on Ticket B. He paid $14.80 to Ms Macdonald when she handed him Ticket B.
49 Lotteries accepts that, immediately after the issue of Ticket B and the recording in Lotteries' computer system of the particulars recorded at 10.17.47am (see paragraph [11] above), Mr Reinhold had an "Entry" consisting of or relating to the game numbers on Ticket B. Lotteries contends, however, that Mr Reinhold no longer had such an "Entry" at the time of the draw and that, for that reason, he was not entitled to a prize.
50 This raises questions about the time at which "Entries" come into existence and their duration. Having regard to rules 12(a) and 12(b), it is clear that the "Entries" to be taken into account for the purpose of determining and allocating prizes for a particular draw are those subsisting at the time of the draw. The rules appear to reflect no explicit concept of cancellation or withdrawal of an "Entry", as distinct from a "Ticket" - although there is a concept of cancellation of "Numbers in a Game of OZ Lotto". This is dealt with by rule 6(g) which, broadly speaking, is concerned with a case where a terminal at an agency has caused game numbers to be entered in the central computer but payment for the relevant entry or ticket has not been forthcoming. It is recognised that, in such a case, the agent may "cancel the Numbers before the Drawing".
51 Despite the absence from the rules of any explicit concept of cancellation of an "Entry", it seems to me that cancellation or withdrawal of a "Ticket" (rules 6(f) and 11(j)) carries with it the consequence that the "Entry" with which the "Ticket" is connected will also be cancelled or withdrawn. A "Ticket" is, after all, "the official confirmation that a Player has submitted an Entry" and a completed entry form is, after acceptance and processing, "evidenced by the issue of" a "Ticket" (rule 6(c)), so that cancellation or withdrawal of a "Ticket" necessarily entails cancellation or withdrawal of the "official confirmation" of the submission of the relevant "Entry" and of the document by which acceptance and processing of the relevant entry form are "evidenced".
52 As I have said, Lotteries contends that Mr Reinhold had no "Entry", in respect of the game numbers on Ticket B, when the relevant draw occurred. This is because criterion (a) and criterion (c) were, at that point, not satisfied.
53 As to criterion (a), the game numbers on Ticket B were recorded in the central processing computer equipment at 10.17.47am on 19 September 2005. In that way, criterion (a) was at that point satisfied. At 10.21.50am, however, another entry was made which referred to the same numbers and, in its last line, included the word "CANCEL" in block letters. The recording of the numbers in the central processing computer equipment after 10.21.50am was therefore a twofold recording the net effect was to record the numbers as cancelled. Implicit in the concept of recording with which criterion (a) is concerned is, it seems to me, the notion that the recording will be one which treats the numbers as operative and extant. A twofold recording having the net effect I have mentioned does not satisfy that concept. From the point at which the "CANCEL" notation was entered in respect of the game numbers on Ticket B, those numbers were, in the relevant sense, no longer "recorded in the central processing computer system".
54 As to criterion (c), the position at the time of the draw was that Mr Reinhold continued in possession of the piece of paper referred to as Ticket B. The game numbers printed on that piece of paper at the time of its creation continued to be printed on it at the time of the draw. To that extent, those game numbers satisfied criterion (c) at the time of the draw - subject, however, to the force of the qualifying words "subject to Rule 6(e)". Rule 6(e) is concerned with inconsistency between the "details" on a person's ticket and the "details" in Lotteries' computer records. In the case of such inconsistency, the details in the computer records prevail and are determinative of prize entitlement. Game numbers must be regarded as such "details".
55 The qualification expressed by the words "subject to Rule 6(e)" indicates that printing of the relevant game numbers in the specified way on a "Ticket" is not, of itself, necessarily sufficient to supply the element of "Entry" with which criterion (c) is concerned. That element will exist only if there is printing of that kind on a "Ticket" and, in addition, rule 6(e) has not operated to deal with a situation of the kind with which that rule is concerned. The continued existence of the printing does not satisfy criterion (c) once rule 6(e) has operated in a case of relevant inconsistency.
56 An inconsistency of the kind dealt with by rule 6(e) arose at 10.21.50am on 19 September 2005. Before that point, the "details" as to game numbers recorded on Ticket B corresponded with the "details" as to operative game numbers recorded in Lotteries' computer system which constituted the "Entry" reflected by Ticket B. But that correspondence ceased at 10.21.50am. If, after that point, Ticket B was still properly regarded as a "Ticket", as defined by the rules, the situation was one in which, although the relevant game numbers continued to be physically visible on the "Ticket", the "subject to" qualification operated to preclude their still being regarded as printed on a "Ticket" at the time of the draw, so that criterion (c) was no longer satisfied when the draw occurred.
57 Having regard to the provisions of the rules as a whole, the result is that, at the time of Oz Lotto Draw 605 on 20 September 2005, the game numbers in fact printed on the piece of paper I have called "Ticket B" no longer constituted an "Entry" for that draw. This is because those game numbers were no longer recorded in Lotteries' central processing computer system and because rule 6(e) had accordingly intervened to preclude their continuing to be regarded as printed on a "Ticket".
58 For reasons of policy which are not difficult to understand, the rules afford paramount force to the content of Lotteries' computer records. No "Entry" can exist in respect of game numbers which, at the time of the draw, are not recognised as operative game numbers in those computer records. And this is so whatever might appear on the face of a document that is, or has been, a "Ticket" showing of the game numbers constituting the "Entry". Where, as in a case such as the present, game numbers have been entered in the computer system and other criteria have been satisfied so as to create an "Entry" consisting of those game numbers, a subsequent entry in the computer system causing the numbers to be no longer operative game numbers means that there is thereafter no such "Entry". The cause of or reason for the removal or reversal is irrelevant to the question whether the "Entry" subsists, even though it might have other consequences under the contract between Lotteries and the person who had the "Entry".
59 Because of the paramount force given to the content of Lotteries' computer records and the consequent absence of any "Entry" for the game numbers appearing on Ticket B at the time of Oz Lotto Draw 605, Mr Reinhold cannot succeed in his primary claim to recover, as a matter of contract, the prize of $2,000,000 that would have been payable had there been a single "Entry" for Oz Lotto Draw 605 consisting of those game numbers.
The rectification claim
60 It is the contention of Mr Reinhold and the Newsagents that, if the outcome on Mr Reinhold's principal claim is as I have just stated, the computer records of Lotteries should be rectified in exercise of equity's jurisdiction to rectify instruments. It was apparently accepted that Lotteries' computer records are, for these purposes, an instrument and that the jurisdiction to rectify is available accordingly. I therefore do not pause to consider that matter.
61 The essence of the claim, as articulated by Mr Kelly SC on behalf of the Newsagents in submissions adopted by Mr Simpkins, is that the entry at 10.15.15am on 19 September 2005 relating to Terminal 3 (that is, item 2 at paragraph [11] above) should, as to the whole of its substantive content, including the game numbers, be deleted and there should be inserted in its place all of the substantive content of the entry at 10.21.50am (that is, item 5 at paragraph [11] above). In that way, the player identification details and game numbers referable to Ticket B should be recorded in place of the player identification and ticket identification details and game numbers referable to Ticket A and those substituted particulars would stand uncancelled as the content of the computer record referable to Ticket A.
62 The approach to be taken to a rectification claim of this kind is the subject of comment in several of the judgments in Pukullus v Cameron [1982] HCA 63; (1982) 150 CLR 447. Wilson J said (at CLR 452):
"The case raises no issue as to the principles which govern the rectification of a contract. Those principles are not in dispute. There need not be a concluded antecedent contract, but there must be an intention common to both parties at the time of contract to include in their bargain a term which by mutual mistake is omitted therefrom: Crane v Hegeman-Harris Co Inc [1939] 1 All ER 662 at p.664; Slee v Warke (1949) 86 CLR 271 at p.280; Joscelyne v Nissen [1970] 2 QB 86, at p.98; Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336, at p.350. So long as there is a continuing common intention of the parties, it may not be necessary to show that the accord found outward expression, notwithstanding the views expressed to the contrary in Joscelyne at p.98, and Maralinga at p.350. The opposing view is argued by Mr Bromley QC in an article in the Law Quarterly Review vol 887 (1987) p.532. It is unnecessary to pursue the distinction in the present case because the representation of the respondent and its acceptance by the appellants plainly established such an accord. The second principle governing the rectification of a contract which is material to this case is that which requires the plaintiff to advance "convincing proof" that the written contract does not embody the final intention of the parties. The omitted ingredient must be capable of such proof in clear and precise terms. The Court must not assume for itself the task of making the contract for the parties."
63 Brennan J said (at CLR 456):
"Although the remedy of rectification is no longer held to depend upon proof of an antecedent concluded contract, Slee at p.280; Maralinga at p.336, it is necessary to show a concurrent intention of the parties, existing at the time when the written contract is executed, as to a term which would have been embodied in the contract if the parties had not made a mistake in expressing their intention. Proof of such an intention is necessary to 'displace the hypothesis arising from execution of the written instrument, namely, that it is the true agreement of the parties' Maralinga at p.351."
64 To these observations may be added that of Mason J in Maralinga Pty Ltd v Major Enterprises Pty Ltd [1973] HCA 23; (1973) 128 CLR 336 at CLR 350:
"What is of importance is that the purpose of the remedy is to make the instrument conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately. And there has been a firm insistence on the requirement that the mistake as to the writing must be common to the parties and not merely unilateral, except in cases of a special class to which I shall later refer.
It is now settled that the existence of an antecedent agreement is not essential to the grant of relief by way of rectification. It may be granted in cases in which the instrument sought to be rectified constitutes the only agreement between the parties, but does not reflect their common intention ( Shipley Urban District Council v. Bradford Corporation [1936] Ch 375; Slee v. Warke (1949) 86 CLR 271). But this circumstance does not affect what I have already said."
65 Where there are several parties, rectification will be ordered only if it is clearly shown that all of them shared an intention not accurately recorded or implemented by the relevant instrument.
66 The simple proposition upon which Mr Reinhold and the Newsagents rely in pursuing the rectification claim is that it was, on the morning of 19 September 2005, the common intention of Mr Reinhold, Lotteries and the Newsagents that Ticket A and the computer entries it reflected should be cancelled and that Ticket B and the computer entries it reflected should remain extant and operative.
67 Lotteries seeks to resist the rectification claim on several grounds. First, Lotteries says that the common intention of the three parties was merely that Mr Reinhold should have one set of game numbers participating in Oz Lotto Draw 605 and that it was, on 19 September 2005, a matter of complete indifference to all of them which particular numbers should participate. The parties' common intention was, according to Lotteries, met and satisfied by Mr Reinhold's participation in respect of the game numbers on Ticket A.
68 Lotteries further says that it was the common intention of the parties that any entitlement of Mr Reinhold to a prize would be determined by the game numbers shown by Lotteries computer records to be allocated to him and that those numbers and their effect for prize purposes would prevail over the content of any ticket held by Mr Reinhold.
69 I do not think that these submissions can be accepted. If one leaves to one side the intention of Lotteries and concentrates on the intentions of Mr Reinhold and the Newsagents, it is to my mind clear that they attached significance to the game numbers on Ticket B to the exclusion of those on Ticket A. The whole purpose of the acts of the Newsagents' employees and Mr Reinhold while he was at the shop was to put him in a position where he had a set of game numbers evidenced by a complete and regular ticket. Mr Reinhold, it may be accepted, did not turn his mind to the content of the computer records and questions of discrepancy between those records and the ticket he took home with him. Had it been the game numbers on Ticket A, rather than those on Ticket B, that attracted the $2,000,000 prize, Mr Reinhold, holding Ticket B in his hand, would have been astonished by the suggestion that he had won that prize.
70 Mr Reinhold, in any event, could not have obtained a prize in respect of the game numbers on Ticket A. Various provisions within rule 14 say what must be done to obtain or claim a prize. Under rule 14(l), a claim for a prize under any of the earlier provisions of rule 14 must be accompanied by certain "particulars", including "the Ticket Serial Number" (rule 14(l)(ii)) and "the Ticket" (rule 14(l)(v)). Because he was never given Ticket A (which was retained by the Newsagents) and because he had no way of knowing the TSN of Ticket A (which did not print), Mr Reinhold could never have satisfied those conditions. For the same reason, he did not satisfy the criteria in paragraph (2) of the definition of "Player" (see paragraph [40] above) in respect of the game numbers on Ticket A. At no stage, therefore, did Mr Reinhold become a participant in the relevant game of Oz Lotto in relation to the Ticket A game numbers. It is therefore wrong to suggest that the chance he wished to purchase accrued to him because the game numbers on Ticket A continued to be recorded in Lotteries' computer records at the time of the draw.
71 While selection of the particular game numbers in the first instance was a matter of indifference to all parties, the intention of Mr Reinhold, at least, could only have been that his participation in the draw would be solely by reference to the game numbers appearing on Ticket B, being the ticket he was given and with which he left the shop. The intention of the Newsagents, in my view, must have been the same.
72 Lotteries, on the other hand, was not a participant in the events at the newsagency on the morning of 19 September 2005. Lotteries' intention about which ticket was to be cancelled and which was to stand was formed and shaped, in the first instance, by what Mr Cardwell was told on the telephone by Ms Skinner and, in addition, by the procedures Mr Cardwell undertook in response to Ms Skinner's request for guidance. Lotteries did not have any independent desire or intention of its own in that respect.
73 Lotteries raises another matter. It contends that the contract between itself, the Newsagents and Mr Reinhold was, of its nature, not such as to allow rectification of the kind Mr Reinhold and the Newsagents seek.
74 I have already outlined the statutory context in which the Oz Lotto Rules are made and operate. A person who buys an Oz Lotto ticket elects to become subject to a pre-ordained contractual regime the terms of which are fixed by and pursuant to a statute. The statute cannot be changed excepted by Parliament. The rules themselves cannot be changed by Lotteries except as approved by the Minister. Combined action of Lotteries, an agent such as the Newsagents and a subscriber or player such as Mr Reinhold cannot alter the terms of a contract to which they have become parties by the processes culminating in an "Entry" as defined by the rules. As Clarke JA pointed out in Brown v Petranker (above), the parties are not free to negotiate their contract. They must contract on the pre-ordained terms or not at all and, as Clarke JA also observed, the "presumed intention of the parties" plays no part in the process of construing the contract.
75 It was submitted by Mr Gleeson SC on behalf of Lotteries that the contract is accordingly similar to the constitution of a company which, by s 140(1) of the Corporations Act 2001 (Cth), has affect as a contract between the company and each members, between the company and each director and the secretary and between a member and each other member. A company's constitution will not be rectified according to equitable principles of rectification. The reason is that which precludes implication of terms from extrinsic circumstances, as explained by Steyn LJ in Bratton v Seymour Service Co Ltd v Oxborough [1992] BCLC 693 at 698:
"Here, the company puts forward an implication to be derived not from the language of the articles of association but purely from extrinsic circumstances. That, in my judgment, is a type of implication which, as a matter of law, can never succeed in the case of articles of association. After all, if it were permitted, it would involve the position that the different implications would notionally be possible between the company and different subscribers. Just as the company or an individual member
cannot seek to defeat the statutory contract by reason of special
circumstances such as misrepresentation, mistake, undue influence and duress and is furthermore not permitted to seek a rectification, neither the company nor any member can seek to add to or to subtract from the terms of the articles by way of implying a term derived from extrinsic surrounding circumstances."
76 Both rectification and implication depend on findings about intentions. Each is concerned with "a deficiency in the expression of the consensual agreement": Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337 per Mason J at CLR 346. In relation to intentions underlying a company's constitution, Ipp JA, in National Roads and Motorists Association Ltd v Parkin [2002] NSWCA 153; (2004) 60 NSWLR 224 at [81], quoted the following passage from the speech of Lord Macmillan in Egyptian Salt and Soda Co Ltd v Port Said Salt Association Ltd [1931] AC 677 at 682:
"... It must be borne in mind that the purpose of the memorandum is to enable shareholders, creditors and those who deal with the company to know what is its permitted range of enterprise, and for this information they are entitled to rely on the constituent documents of the company. They have not access to other sources of information such as the antecedent transactions which the learned judge invokes, and have no means of knowing, for example, 'that the intention of the promoters that the company should not export salt was known to the defendant
company,' a circumstance which the learned judge adduces. The intention of the framers of the memorandum must be gathered from the language in which they have chosen to express it."
77 These observations are, of course, concerned with the intentions of "the framers" of a company's constitution. But they apply also to the intentions of persons later becoming bound. As Steyn LJ pointed out, the intrusion of the intentions of the company and one subsequent subscriber for or transferee of shares might mean that implications arose inconsistent with those arising from the intentions of the company and another subscriber or transferee, so that conflicting implications competed for supremacy. In the case of a company constitution, as in the case now before me, it must be presumed that the parties intended simply to subject themselves to the pre-ordained regime, so that their rights and obligations would be as dictated by that regime, without elaboration or qualification peculiar to the particular case. Certainly Lotteries cannot have intended that inconsistent intention involved in a course of dealing at a suburban newsagency should be accommodated.
78 I accept the submission made on behalf of Lotteries that, since hundreds of thousands of people participate in Oz Lotto draws, it cannot be accepted that the statutory contract is to apply differently to different participants according to such intentions inconsistent with the pre-ordained regime as may be manifested from time to time by individuals at newsagencies and other outlets throughout New South Wales. The contractual regime is fixed in advance. A participant cannot participate except in accordance with the pre-ordained terms, whatever may be the actual intention of that participant, the agent through which he or she becomes a participant or Lotteries itself. Among the statutory terms is the term which makes the contents of Lotteries' computer records determinative, regardless of subjective intentions inconsistent with that content.
79 In this respect, the circumstances of this case bear a distinct similarity to those before the Supreme Court of the Northern Territory in Coolibah Pastoral Co v Commonwealth (1967) 11 FLR 173. The claim there was a claim for rectification of a pastoral lease granted under Crown lands legislation. The statutory process entailed issue by the Administrator of a notice containing the proposed lease terms. An applicant could then accept or reject the proposal contained in the notice. In case of acceptance, the Minister was bound to grant a lease on the terms in the notice. Blackburn J held that the procedure left no room for the inclusion of terms which were agreed or intended by the parties but not expressed in the notice. There, as here, the terms to apply as between the parties were fixed in advance by a process of external prescription admitting of no common intention beyond that reflected by the terms so fixed.
80 The contract, of its nature, and by its terms, is one that cannot be affected by the parties' intentions. Those intentions play no part in discovering the meaning of the contract. Nor can they cause any term to be implied or lead to the rectification of an instrument created in accordance with the contractual provisions.
81 I mention, in addition, another matter raised by Lotteries, namely, that the $2,000,000 that would have been paid as prize money had Ticket B and its related Entry not been cancelled had, by the time Mr Reinhold submitted his prize claim, come to be included in the prize for the next draw: see paragraph [14] above. That draw proceeded accordingly and the augmented prize of $4,000,000 was paid. I accept the submission by Lotteries that the prejudice and loss to Lotteries that would follow from subsequent rectification in Mr Reinhold's favour as now sought would militate against the exercise of equity's discretion in favour of decreeing rectification.
82 The rectification claim does not succeed.
The breach of contract claims, the claims in negligence and the cross-claims
83 The next question is whether a breach of contract occurred when Ticket B was cancelled. It is, as I have said, accepted that, immediately after the issue of Ticket B and the recording on Lotteries' computer system of the particulars recorded at 10.17.47am on 19 September 2005, Mr Reinhold had an "Entry" consisting of or relating to the game numbers on Ticket B. I have found that he no longer had that "Entry" at the time of the draw. The "Entry" ceased to exist when the "CANCEL" notation was recorded against the relevant particulars in Lotteries' computer system at 10.21.50am. Furthermore, I have noted that the rules reflect no concept of cancellation or withdrawal of an "Entry" but work on the basis that cancellation or withdrawal of a "Ticket" (both recognised concepts) will result in cancellation or withdrawal of the "Entry" the submission of which is the subject of "the official confirmation" constituted by the related "Ticket".
84 It must follow that, if the game numbers that make up an "Entry" are treated as cancelled in Lotteries' central computer records as a result of cancellation or withdrawal of a "Ticket" in conformity with the rules, the elimination of the "Entry" will be consistent with and authorised by the rules. But if there is, within the rules, no warrant for the cancellation or withdrawal of the "Ticket" and the consequent recording of the relevant game numbers as cancelled, the elimination of the "Entry" will be inconsistent with and unauthorised by the rules and will constitute a breach of contract.
85 Mr Reinhold pleads such a breach of contract. He alleges that it was a term of the contract to which he, Lotteries and the Newsagents were parties that his "Ticket" or "Entry" would not be cancelled by Lotteries or the Newsagents without instructions to that effect from him; that Lotteries and the Newsagents (or Lotteries or the Newsagents) - the latter acting either alone or as agents of Lotteries - purportedly cancelled Ticket B and the "Entry" reflected by it, and did so without his instructions; and, if that cancellation was effective, there was a breach by both Lotteries and the Newsagents of the pleaded term of the contract.
86 Mr Reinhold also advances claims in tort. In relation to Lotteries, Mr Reinhold pleads a duty to take reasonable care in and about cancelling Tickets and Entries and providing information for the purpose of enabling Tickets and Entries to be cancelled.
87 Mr Reinhold pleads a duty of care in negligence on the part of the Newsagents by which the Newsagents were required to take reasonable care in and about issuing Ticket B to Mr Reinhold and recording the Entry and cancelling any ticket issued; also to take reasonable care not to cancel Ticket B or the related Entry where the Newsagents had not been requested by Mr Reinhold to do so.
88 In addressing the breach of contract claims and the claims in negligence, it is necessary at the outset to focus on the actions of Lotteries on the one hand and the Newsagents on the other. The circumstance that caused Mr Reinhold's participation in Oz Lotto Draw 605 in respect of the game numbers on Ticket B to be discontinued was the removal of the "Entry" reflected by Ticket B from Lotteries' computer records. The immediate cause of that removal was the keying in of a TSN on a terminal at the Newsagents' premises and the activation of a cancellation accordingly. Those acts were acts of the Newsagents, through their employee, Ms Skinner. But Ms Skinner would not have performed the acts resulting in removal of the Ticket B "Entry" from Lotteries' computer records unless Lotteries had given her over the telephone the number that she used as the TSN when activating the cancellation through the terminal at the Newsagents' premises.
89 If the Newsagents committed a breach of contract or were negligent because of the acts of Ms Skinner that were the immediate cause of the removal of the "Entry" reflected by Ticket B, there will be an issue as to the responsibility of Lotteries to protect the Newsagents against the consequences of the wrong done by them. That issue is raised by the Newsagents' cross-claim by which they plead implied terms of their agency agreement with Lotteries that Lotteries would provide proper instructions to the Newsagents as to cancellation of tickets and would adhere to its own procedures to ensure that tickets were not improperly cancelled. The Newsagents also plead a duty of care on the part of Lotteries towards the Newsagents in respect of these matters.
90 Lotteries, in turn, maintains a cross-claim against the Newsagents. It relies on provisions of the agency agreement, including provisions requiring the Newsagents to comply with instructions given to them by Lotteries. This is relevant to instructions regarding cancellations which, as the evidence shows, were contained in "Network News" publications given by Lotteries to the Newsagents. There is also a term by which the newsagents must indemnify Lotteries against claims arising from failure or default of the Newsagents under the agency agreement. Lotteries further says that the Newsagents owed it a duty of care to exercise all reasonable skill, diligence and care in discharging their duties under the agency agreement and that it was an implied term of the agreement itself that they would do so. Lotteries therefore claims indemnity by the Newsagents.
Concurrent duties of care owed to Mr Reinhold
91 I am satisfied that each of Lotteries and the Newsagents owed Mr Reinhold a duty of care in negligence. That the relevant events occurred in a contractual context and that Mr Reinhold acquired rights in contract as against Lotteries and the Newsagents does not preclude the existence of a concurrent duty of care. Each duty of care is found whether one adopts a foreseeability approach or a proximity approach, particularly because Mr Reinhold was "vulnerable" in the sense that he was not in a position to protect himself from the want of reasonable care on the part of Lotteries or the Newsagents or both in and about the matter of ticket issue and ticket cancellation: Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180. Of necessity, Mr Reinhold relied on the accuracy and integrity of the steps taken by Lotteries and the Newsagents: Bryan v Maloney [1995] HCA 17; (1995) 182 CLR 609; Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515. Speaking of the position of a solicitor in relation to the solicitor's client and after referring to the decision of the High Court in Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539, Kirby P said, in Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 at 652:
"The attempt to limit a solicitor's duty strictly to the scope of his retainer is inconsistent with the holding of the High Court in Hawkins . It attempts to confine the duty of care to a contractual format. But as the majority established in that case, that duty lies also in tort. The consequences of tort liability may not be the same as of contractual liability. Although the contract of retainer will be an important indicium of the nature of the relationship
which gives rise to the common law duty of care (as the minority held in Hawkins ) it will not chart exclusively the perimeters of that duty. Deane J pointed out (at 579) that, depending upon the circumstances of the particular case, the duty may require the taking of positive steps " beyond the specifically agreed professional task or function ", where these are necessary "to avoid a
real and foreseeable risk of economic loss being sustained by the client".
92 In the case of Lotteries, the context in which dealings take place indicate that the contractual duties emerging from the rules are supplemented by a duty of care in negligence to administer the rules in a careful and prudent way, including by adhering to such policies and procedures as Lotteries itself has seen fit to adopt for the purpose of ensuring the due and proper implementation of the rules. Such a duty will, depending on circumstances, be owed to the relevant player or subscriber, or to the relevant agent or to both those persons. Lotteries operates in an environment where its actions and its adherence to both the rules and the policies and procedures that underwrite and supplement the rules are potentially the source of detriment to agents and to subscribers.
93 In the case of the Newsagents, the concurrent duty of care will include a duty to persons buying lottery tickets to exercise reasonable care and skill in executing and fulfilling orders placed by those persons: see Rickard Constructions Pty Ltd v Richard Hails Moretti Pty Ltd [2006] NSWCA 356 at [183].