Kakavas v Crown Melbourne Limited [2013] HCA 25

The High Court has unanimously dismissed an appeal from a decision of the Court of Appeal of the Supreme Court of Victoria. The High Court agreed with the Supreme Court that Crown Melbourne Limited did not act unconscionably by allowing the appellant to lose large sums of money gambling at its casino.

Background

The appellant was a regular visitor to Crown's casino. A high-stakes gambler, between mid-2005 and mid-2006 he turned over $1.479 billion playing baccarat. He issued proceedings in the Supreme Court of Victoria to recover his net loss of $20.5 million over that period.

The appellant claimied that Crown and its employees had engaged in unconscionable conduct contrary in violation of s 51AA of the Trade Practices Act 1974 (Cth) and under the general law. He argued that Crown had known he suffered from a gambling addiction, and had lured him to gamble at its casino by providing incentives, including rebates on losses and the use of Crown's private jet.

However, the primary judge dismissed these claims, and held that the appellant's gambling issue was not a kind of special disadvantage that rendered him susceptible to exploitation. Furthermore, Crown had not sought to exploit any disadvantage from which the appellant may have suffered.

The appellant appealed to the Court of Appeal, which found that he had failed to demonstrate that the primary judge's conclusion was in error, or that the transactions between himself and Crown were unfair, unjust or unreasonable. The Court upheld the primary judge's finding, saying that the appellant had presented himself as "a successful businessman entirely capable of making decisions in his own interests," and that Crown was entitled to accept the appellant as he presented himself.

High Court Decision

On appeal in the High Court, the appellant focused his argument on the allegation that Crown had exploited his inability, by reason of his pathological gambling addiction, to make decisions in his own interests.

The High Court dismissed this argument, concluding that the appellant's attempt to invoke principles of unconscionability failed. The Court declined to find that the appellant was at special disadvantage which made him susceptible to exploitation by Crown. Despite his gambling addiction, he was capable of rational decision-making, and Crown did not knowingly victimise the appellant by allowing him to gamble.

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