Case: Reynolds v Katoomba RSL All Services Club Ltd [2001] NSWCA 234 ; (2001) 53 NSWLR 43
Outcome: applied
On all occasions on which Mr Foroughi entered the gaming areas of Star City after 18 May 2004, he did so in knowing breach of the terms of his voluntary exclusion order. His claims for damages are contrary to the principle of individual autonomy which underlies the common law's view as to the limits of legal responsibility for pure economic loss: see for example Reynolds v Katoomba RSL All Services Club Ltd [2001] NSWCA 234 ; (2001) 53 NSWLR 43 at [48] [49]. 6 Nevertheless, Mr Foroughi asserts that Star City owed him a duty of care, the content of which is not entirely clear, but which appears to have been to take reasonable steps to prevent him from entering the gaming areas of the casino and/or to remove him from the casino. Mr Foroughi also contends that express misleading representations, said to be in trade or commerce, were made to him by an employee of Star City when he was being escorted from the casino after the voluntary exclusion order was made. 7 The representations for which Mr Foroughi sues for damages under ss 52 and 82 of the Trade Practices Act (1974) (Cth), as amplified in his oral evidence, are said to have been to the effect that: &#8226; Star City had 5,000 surveillance cameras in the casino which would be able to detect Mr Foroughi if he entered the gaming areas; and &#8226; as soon as practicable after it became known to Star City that Mr Foroughi was in the casino, Star City would remove him from the premises. 121 The question of whether a registered club owed a duty of care to a member who it knew, or ought to have known, to be a problem gambler, to protect the person against financial loss from gambling was considered by the NSW Court of Appeal in Reynolds v Katoomba RSL. The Court (Spigelman CJ, Powell and Giles JJA) was unanimous in holding that no such duty was owed. 122 Chief Justice Spigelman observed that, save in an extraordinary case, an example of which he was unable to conceive, economic loss occasioned by gambling should not be accepted to be a form of loss for which the law permits recovery. 125 The following paragraphs of the conclusion of Spigelman CJ are instructive and I will set them out in full: 47 The discussion of vulnerability in... Perre v Apand Pty Ltd... and the authorities cited therein, place considerable emphasis on the practical inability of the injured party to take steps to protect him or her or itself, whether because of ignorance of the risk or otherwise. There was no such practical inability in the present case. 48 It may well be that the appellant found it difficult, even impossible, to control his urge to continue gambling beyond the point of prudence. However, there was nothing which prevented him staying away from the club. The suggested duty on the club to advise him to resign his membership emphasises the point. He could have resigned at any time. The requests to refuse to cash cheques when asked, did not shift his personal responsibility for his own actions to the club. There was no reason for the club to honour one request rather than the other. 49 In my opinion this combination of circumstances is such that no duty of care was owed of the character for which the appellant contended. The risks were obvious. As Gleeson CJ said with respect to the analogous situation of a participant in sport: "The only way to avoid risk of injury is not to play" ( Agar v Hyde at 563 [18].) The Appellant must accept responsibility for his own actions. There was no duty of care. There was no unconscionable conduct. The appeal should be dismissed with costs." 126 In Reynolds v Katoomba RSL , the Court refused to recognise a duty of care notwithstanding the trial judge's finding that the club knew that the plaintiff and his father had asked the club to prevent him from gambling to excess, in particular by refusing to cash cheques: see at [4] [6], [44] and [49]. 127 In my view the present claim is indistinguishable from the decision of the Court of Appeal in Reynolds v Katoomba RSL which I respectfully follow. While it is true that the question of whether a duty of care exists must depend on all the circumstances of the case, the claimed duty in the present proceedings is on an even weaker foundation than that which was relied upon by the plaintiff in Reynolds v Katoomba RSL . 128 Here, Mr Foroughi expressly and voluntarily undertook responsibility for his own conduct in agreeing not to enter the gaming areas of Star City and to seek assistance and guidance of a qualified and recognised counsellor. 129 More recent authority does not assist Mr Foroughi's claim. In Preston v Star City Pty Limited (No 3) [2005] NSWSC 1223 , Hoeben J permitted a claim in negligence to proceed to trial because the allegations went beyond those made in Reynolds v Katoomba RSL. The claim was that Star City knew of the plaintiff's problem and actively encouraged and exploited it. No such claim is made in the present proceedings. 141 The present case bears no resemblance to the factual findings made by Judge Naughton in American Express International v Famularo (unreported, District Court of NSW, Norton DCJ, 19 February 2001). In any event, Powell JA doubted the correctness of that decision in Reynolds v Katoomba RSL at [115].