Reported Decision : (2001) Aust Torts Reports 81-624 53 NSWLR 43 New South Wales Court of Appeal CITATION : REYNOLDS v. KATOOMBA RSL ALL SERVICES CLUB LIMITED [2001] NSWCA 234 FILE NUMBER(S) : CA 41030/99 HEARING DATE(S) : 02/05/2001 JUDGMENT DATE : 20 September 2001 PARTIES : Christopher Reynolds (Appellant) Katoomba RSL All Services Club Limited (Respondent) JUDGMENT OF : Spigelman CJ at 1; Powell JA at 50; Giles JA at 133 LOWER COURT JURISDICTION : District Court LOWER COURT DC 2475/98 FILE NUMBER(S) : LOWER COURT Hogan A-DCJ JUDICIAL OFFICER : COUNSEL : I.D. Temby QC/J. Stoljar (Appellant) C.J. Birch SC/Ms. N. Butler (Respondent) SOLICITORS : S.J. Moran, Public Interest Advocacy Centre (Appellant) Pigott Stinson Ratner & Thom (Respondent) CATCHWORDS : NEGLIGENCE - Duty of care - Economic loss - Absence of physical injury to person or property - Licensed club - Gaming machines and other forms of gambling - Club cashing third party cheques as well as cheques drawn by member on own bank account - Proceeds of cheques used for gambling in club premises - Whether club liable to repay member amount of gambling losses - No relevant duty of care owed by club to member D Casino Control Act 1992 LEGISLATION CITED : Liquor Act 1982 Registered Clubs Act 1976 Trade Practices Act 1974 (Cth) Agar v. Hyde (2001) 201 CLR 552 American Express International v. Famularo 19 February 2001 Naughton DCJ unreported Caltex Oil (Australia) Pty. Limited v. The Dredge "Willemstad" (1975-1976) 136 CLR 529 Christopher v. The Motor Vessel "Fiji Gas" (1993) Aust Torts Reports 81-202 Crimmins v. Stevedoring Industry Finance Committee (1999) 200 CLR 1 G-NOC Corporation v. About (1989) 715 F.Supp 644 Greate Bay Hotel & Casino v. Tose (1994) 34 F 3d 1227 Hakimoglow v. Trump Mahal Associates (1990) 70 F 3d 291 CASES CITED: Hawkins v. Clayton (1988) 164 CLR 539 Kirkham v. Chief Constable of Greater Manchester Police [1990] 2 QB 283 Orange v. Chief Constable of West Yorkshire Police [2000] EWCA C 10611 Perre v. Apand Pty. Limited (1999) 198 CLR 180 Prast v. Cottesloe (2000 22 WAR 474 Preston v. Star City Pty. Limited [1999] NSWSC 1273 Reeves v. Commissioner of Police of the Metropolis [2000] 1 AC 360 Rootes v. Shelton (1967) 116 CLR 303 Tepko Pty. Limited v. Water Board (2000-2001) 75 ALJR 775; 178 ALR 634 DECISION : Appeal dismissed with costs IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41030/99 DC 2475/98 SPIGELMAN CJ POWELL JA GILES JA 20 September 2001 REYNOLDS v. KATOOMBA RSL ALL SERVICES CLUB LIMITED JUDGMENT 1 SPIGELMAN CJ: The facts and issues in this appeal are set out in the judgment of Powell JA which I have read in draft. Subject to the following additional observations, I agree with his Honour's reasons. 2 In his submissions to the Court, Mr Temby QC, who appeared on behalf of the Appellant, identified the conduct of the Respondent which was said to be in breach of duty as threefold: (i) Failure to advise him to resign his membership. This submission accepted that, for so long as the Appellant was a member, the club could not preclude his entering club premises. (ii) Failure to warn him, on each occasion that he was observed to be gambling, of the lack of prudence in his doing so. (iii) Permitting the Appellant to cash cheques on the premises and making what were said to be advances of cash to the Appellant. (A submission that the Appellant should have been prevented from using the ATM machine on the premises was withdrawn.) 3 The findings of fact by Hogan ADCJ are set out in full by Powell JA. A number of findings are particularly pertinent. 4 The trial judge found that after a certain point Mr Gianisis, the Secretary Manager of the club, ought to have been aware of the fact that the Appellant was a problem gambler. His Honour also found that the Appellant told Mr Gianisis words to the effect: "I have a problem. I can't control myself. Once I start I can't stop. Please don't cash my cheques or give me credit to start me off, even if I beg you." 5 Furthermore, his Honour accepted evidence that the Appellant's father had had three conversations with Mr Gianisis. In one he had informed Mr Gianisis that his son had a major gambling problem and was attending Gamblers Anonymous and asked him not to provide any credit at the club. Mr Gianisis replied: "Okay, that won't be a problem." On another occasion he asked Mr Gianisis not to cash any more cheques for his son and Mr Gianisis replied: "I can't do it. There is no way I can stop him. He is over 21." 6 On the third occasion, towards the end of the relevant period, the Appellant's father approached Mr Gianisis and asked him to stop cashing cheques and to bar the plaintiff from the club. Mr Gianisis replied: "I can't bar him because he hasn't done anything wrong." 7 His Honour's findings of fact about the Appellant being a "problem gambler" did not extend so far as finding that in some way he had been deprived of the ability to control his own actions. Dr Allcock was a consultant psychiatrist who gave evidence about psychiatric aspects of gambling. His Honour found: "The plaintiff, however, was a free citizen, and a member of the club. He was responsible for his own actions. I do not accept the submission that he did not have a free will to exercise. I do not understand Dr Allcock to say so, and even if he had, I would not have been persuaded." 8 The case is one of economic loss and should be decided in accordance with the guidance for cases of this character set out in the respective judgments of the High Court in Perre v Apand Pty Ltd (1999) 198 CLR 180. The Interests to be Protected 9 On the approach of Gummow J, with whom Gleeson CJ agreed with additional observations, in my opinion the Appellant fails in limine. Save in an extraordinary case, economic loss occasioned by gambling should not be accepted to be a form of loss for which the law permits recovery. I make allowance for an extraordinary case, without at the present time being able to conceive of any such case. 10 In Modbury Triangle Shopping Centre Pty Ltd v Anzil (2001) 75 ALJR 164, Gleeson CJ said at [14]: "In some cases, where there is a problem as to the existence and measure of legal responsibility, it is useful to begin by identifying the nature of the harm suffered by a plaintiff, or which a defendant is said to be liable." 11 Christopher v The Motor Vessel "Fiji Gas" (1993) Aust Torts Reports 81-202 was a case of pure economic loss. McPherson JA said at 61,967: "It remains a weakness of the common law approach that in attempting to define the limits of liability in this area it tends to concentrate on the actions of the defendant." 12 In Perre v Apand Gummow J said at [191] that there "is much to be said" for this observation of McPherson JA. His Honour added: "Rather, there first should be identified those interests which are sufficient to attract the protection of the law in this field." 13 Gummow J went on at [191] to refer to the judgment of Gaudron J in Hawkins v Clayton (1988) 164 CLR 539 including her Honour's observations at 278: "In actions in negligence for economic loss it will almost always be necessary to identify the interests said to have been infringed to determine whether the risk of loss or injury to that interest was reasonably foreseeable and whether a sufficient relationship of proximity referable to that interest was present so as to establish a duty of care." 14 In Perre v Apand Gummow J proceeded to identify the interests for which the appellant in that case sought protection. His Honour referred at [193] to the property owned by the appellants and their family companies and at [194] to the loss of sales, the incurring of expenses to mitigate loss and to the loss of income occasioned by the circumstances that had arisen in that case. His Honour said at [195]: "The business activities of these parties depended in varying degrees upon the occupation and utilisation of land and the turning of the produce thereof to effective economic account. The substance of their complaints is that the continued pursuit of those activities was impeded significantly by the denial of access to the principal and lucrative market for that produce. … the point of importance at this stage is that interests of the nature I have identified are susceptible of protection by the tort of negligence against injury, albeit economic in nature. Such injury is recognised as a kind of detriment which, if negligently caused, may attract compensation." 15 In the present case there is no interest of the character identified by Gummow J in Perre v Apand. The interest sought to be protected is the avoidance of a risk of loss of money through gambling. That risk, when it came to pass, was entirely occasioned by the Appellant's own conduct. It is not an interest which, in my opinion, the law should protect. 16 In Perre v Apand Gaudron J identified categories in which recovery for pure economic loss will be granted. Her Honour referred to the established category of negligent misstatement at [28]-[30] and concluded, at [34]-[42], that an additional category should be recognised in a case where there is a "loss or impairment of legal rights". I am unable to discern any "legal right" of the Appellant in the present case which has been impaired. The freedom to spend one's money as one chooses, is not a "right" in the sense I understand her Honour to use that word. 17 In my opinion the law should not recognise a duty of care to protect persons from economic loss, where the loss only occurs following a deliberate and voluntary act on the part of the person to be protected. There may be, however, an extraordinary case where a duty should be recognised. The present case is not such. 18 A diversity of approach appears in the judgments of Perre v Apand. A wide range of considerations were taken into account in the judgments in the High Court when determining whether a duty of care existed in the circumstances of that case. A similar range of considerations was referred to in the subsequent decision of Agar v Hyde (2000) 201 CLR 552 which, although it concerned liability for personal injury, is relevant for present purposes because of the element of knowing acceptance of risk by a would-be plaintiff. 19 Hogan ADCJ and Powell JA refer to a number of different considerations. The present case can be determined by focusing on two matters which it is convenient to describe as "Autonomy" and "Vulnerability". Autonomy 20 In Perre v Apand McHugh J said at [114]: "One of the central tenets of the common law is that a person is legally responsible for his or her choices. It is a corollary of that responsibility that a person is entitled to make those choices for him or her self without unjustifiable interference from others. In other words, the common law regard individuals as autonomous beings entitled to make, but responsible for, their own choices. The legal doctrines of duress, undue influence and criminal liability are premised on that view of the common law. In any organised society, however, individuals cannot have complete autonomy, for the good government of a society is impossible unless the sovereign power in that society has power in various circumstances to coerce the citizen. Nevertheless, the common law has generally sought to interfere with the autonomy of individuals only to the extent necessary for the maintenance of society. In the law of liability for economic loss, we have a notable example of the common law's concern for the autonomy of individuals." 21 His Honour went on to say at [115]: "As long as a person is legitimately protecting or pursuing his or her social or business interest, the common law will not require that person to be concerned with the effect of his or her conduct on the economic interests of other persons. And that is so even when that person knows that his or her actions will cause loss to a specific individual. Thus, a consumer owes no duty to a trader not to cause loss to that person by withdrawing custom. However, where other indicia of duty are present, the cloak of immunity cannot extend to conduct which cannot be fairly described as a legitimate pursuit or protection of a person's interests." 22 The significance of the common law's protection of autonomy of the individual has been forcefully restated in the joint judgment of Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde. That case concerned the liability of sporting administrators to participants in a sport. Their Honours said: "[89] … If the laws of the game define the conduct to which an adult participant consents, the law-makers should not liable because they could have made the activity that the participant chose to undertake less dangerous. The absurdity of this proposition is highlighted by the fact that, in many activities, the danger is part of the activity's attraction. The participant may therefore not have chosen to engage in the activity at all if it was less dangerous. [90] The decision to participate is made freely. That freedom, or autonomy, is not to be diminished. But with autonomy comes responsibility. To hold that the appellants owed a duty of care to Mr Worsley would diminish the autonomy of all who choose, for whatever reason, to engage voluntarily in this, or any other, physically dangerous pastime. It would do so because it would deter those who fulfil the kind of role played by the IRFB and the appellants in regulating that pastime from continuing to do so lest they be held liable for the consequences of the individual's free choice. The choices available to all would thus be diminished." 23 The court held unanimously in that case that it was not arguable that a sporting administrator owed a duty of care with respect to the promulgation of rules. 24 The significance of autonomy was also emphasised by Lord Hoffmann in Reeves v Commissioner of Police of the Metropolis [2000] 1 AC 360 at 368C-D: "… there is a difference between protecting people against harm caused to them by third parties and protecting them against harm which they inflict upon themselves. It reflects the individualist philosophy of the common law. People of full age and sound understanding must look after themselves and take responsibility for their actions. This philosophy expresses itself in the fact that duties to safeguard from harm deliberately caused by others are unusual and a duty to protect the person of full understanding from causing harm to himself is very rare indeed." 25 In that case the House of Lords was concerned with a duty to prevent a prisoner in custody from committing suicide. There was actual knowledge of risk on the part of the authorities, arising from unsuccessful attempts at suicide by the prisoner concerned. Accordingly, the case before the court was one of those "rare" cases. However, the interest being protected in that case was the risk of physical injury. Circumstances in which there is a duty to protect from the self-infliction of economic loss must, at the very least, be even rarer. Indeed, as presently advised, I am unable to conceive of such a case. 26 In many respects the tort of negligence is the last outpost of the welfare state. There have been changes over recent decades in the expectations within Australian society about persons accepting responsibility for their own actions. Such changes in social attitudes must be reflected in the identification of duty of care for purposes of the law of negligence. The recent authoritative statements in Perre v Apand and Agar v Hyde give greater emphasis, in the development of the law of negligence, to the acceptance by individuals of a personal responsibility for their own conduct, than may have been given in the past. 27 This Court should be very slow indeed to recognise a duty to prevent self-inflicted economic loss. Loss of money by way of gambling is an inherent risk in the activity and cannot be avoided. (See e.g. Rootes v Shelton (1967) 116 CLR 383 at 385 per Barwick CJ; Prast v Town of Cottesloe (2000) 22 WAR 474 at [32] per Ipp J.) Nevertheless, whether a duty arises in a particular case must depend on the whole of the circumstances, even in the case of an inherent risk. (See Rootes v Shelton (supra) at 390 per Kitto J and Agar v Hyde (supra) at [14] per Gleeson CJ.) 28 The only feature of the present case which could create a duty of care arises from the express knowledge on the part of the Respondent of the Appellant's gambling problem. Furthermore there were express requests made to the club not to permit him to cash cheques. I have set out the findings of fact above. Vulnerability 29 Knowledge of vulnerability is a pertinent factor entitled to weight when deciding whether the circumstances of a particular case create a duty. As I have noted above, in English cases concerned with suicides in custody, specific knowledge of vulnerability has been found to create a duty of care to guard even against self-inflicted harm, at least where the harm is physical injury. (Reeves (supra); Kirkham v Chief Constable of the Greater Manchester Police [1990] 2 QB 283; c/f Orange v Chief Constable of West Yorkshire Police [2000] EWCA Civ 611.) 30 Vulnerability is also relevant in establishing whether a duty to avoid pure economic loss exists. This consideration was discussed in various terms in all the judgments in Perre v Apand . 31 Gleeson CJ said: "[10] … Moreover, knowledge (actual, or that which a reasonable person would have) of an individual, or an ascertainable class of persons, who is or are reliant, and therefore vulnerable, is a significant factor in establishing a duty of care. [11] Vulnerability can arise from circumstances other than reliance. In Caltex [Oil (Australia) Pty Ltd v The Dredge 'Willemstad' (1976) 136 CLR 529] , the obvious vulnerability of a specific plaintiff was influential in a number of the judgments. This was not merely an arbitrary method of solving the problem of potentially indeterminate liability. It was an application of what Lord Oliver later discussed as the idea that in a given case, the degree (and nature) of foreseeability may have an important bearing on whether there is a duty of care." 32 His Honour went on to agree with the reasons of Gummow J and placed particular emphasis on certain matters, including: "[13] The acknowledgment, in the internal communications of the respondent, that there was a need to be careful so as not to damage the interests of those involved in potato growing on land within 20 km of a farm that might be affected by bacterial wilt, is not merely a matter of legally irrelevant prejudice. It shows actual foresight of the likelihood of harm, and knowledge of an ascertainable class of vulnerable persons." 33 Gaudron J referred to this consideration when her Honour identified the duty in a particular case as turning in part on the fact that a person said to owe the duty knew or ought to have known that the other person "is in no position to protect his or her own interests" (at [42]) and "powerless to protect their own interests" (at [41]). 34 McHugh J said: "[104] What is likely to be decisive, and always of relevance, in determining whether a duty of care is owed is the answer to the question, 'How vulnerable was the plaintiff to incurring loss by reason of the defendant's conduct?' So also is the actual knowledge of the defendant concerning that risk and its magnitude. If no question of indeterminate liability is present, and the defendant, having no legitimate interest to pursue, is aware that his or her conduct will cause economic loss to persons who are not easily able to protect themselves against that loss, it seems to accord with current community standards in most, if not all, cases to require the defendant to have the interests of those persons in mind before he or she embarks on that conduct. [105] The principles concerned with reasonable foreseeability of loss, indeterminacy of liability, autonomy of the individual, vulnerability to risk and the defendant's knowledge and its magnitude are, I think, relevant in determining whether a duty exists in all cases of liability for pure economic loss. In particular cases, other policies and principles may guide and even determine the outcome. But I do not think that a duty can be held to exist in any case of pure economic loss without considering the effect of the application of these general principles." 35 His Honour returned to the issue of "Vulnerability" later in his judgment and said: "[118] … In many cases, there will be no sound reason for imposing a duty on the defendant to protect the plaintiff from economic loss where it was reasonably open to the plaintiff to take steps to protect itself. The vulnerability of the plaintiff to harm from the defendant's conduct is therefore ordinarily a prerequisite to imposing a duty. If the plaintiff has taken, or could have taken steps to protect itself from the defendant's conduct and was not induced by the defendant's conduct from taking such steps, there is no reason why the law should step in and impose a duty on the defendant to protect the plaintiff from the risk of pure economic loss. [119] In Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [(1997) 188 CLR 241], an important factor in denying a duty of care was that the plaintiffs were sophisticated investors well able in the circumstances to protect themselves. On the other hand, this Court found a duty in Hill v Van Erp [(1997) 188 CLR 159] and in Pyrenees Shire Council v Day [(1998) 192 CLR 330] partly because of the defendant's control (and knowledge) and relative inability of the plaintiffs to protect themselves. The law of contract [120] In determining whether the plaintiff was vulnerable, an important consideration will be whether the plaintiff could easily have protected itself against the risk of loss by protective action, particularly by obtaining contractual warranties. Pecuniary losses are one of the ordinary risk of business and, for that matter, ordinary life. Business people frequently take, or are easily able to take, steps to minimise their business or economic loses. Taking these steps will often be a more efficient way of dealing with the risk of these losses than requiring defendants to have regard to the risk that others may suffer economic loss. The economic efficiency of a society requires that the person best able to deal with or avoid the consequences of an economic risk from a cost view should be responsible for the risk and its consequences. … Where another body of law can effectively deal with economic loss, a court should be slow to use negligence law to impose a duty of care on a defendant. This is particularly important where to do so would interfere with a coherent body of law in another field." 36 His Honour also said: "[125] In my view, reliance and assumption of responsibility are merely indicators of the plaintiff's vulnerability to harm from the defendant's conduct, and it is the concept of vulnerability rather than these evidentiary indicators which is the relevant criterion for determining whether a duty of care exists. The most explicit recognition of vulnerability as a possible common theme in cases of pure economic loss is found in the judgment of Toohey and Gaudron JJ in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [(1997) 188 CLR 241 at 263-264]. [126] Reliance may therefore be seen - for the purposes of duty of care - as an indicator of vulnerability: the plaintiff is specially vulnerable to the words and/or conduct of the defendant because he or she reasonably relied on the defendant. Reliance may also, of course, be relevant to causation. In terms of a duty of care, however, it is not reliance that is relevant but, its consequence, vulnerability. That is so even though in certain situations 'reasonable reliance' will be the appropriate test for determining whether the plaintiff was vulnerably exposed to harm from the defendant's acts or omissions. … [129] The degree and nature of vulnerability sufficient to found a duty of care will no doubt vary from category to category and from case to case. Although each category will have to formulate a particular standard, the ultimate question will be one of fact. The defendant's control of the plaintiff' right, interest or expectation will be an important test for vulnerability. That test was applied by Gummow J in Pyrenees where his Honour noted that like the situation in Hill v Van Erp, there was no evidence of actual reliance." 37 Under the heading "The salient features of the present case", Gummow J said: "[216] The Perres had no way of appreciating the existence of the risk to which they were exposed by the conduct of the Apand experiment and no avenue to protect themselves against that risk. They thus stood in quite a different position from that of the financier in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords which had the power to deal from a position of strength in ordering its commercial relationship with the party to whom it provided financial accommodation. Here, the relevant risks to the commercial interests of the appellants was in the exclusive control of Apand. Its measure of control was at least as great as that of the Shire in Pyrenees Shire Council v Day." 38 His Honour concluded that the combination of a range of factors, including that factor, was such as: "[217] … to bring the Perres and Apand into such close and direct relations as to give rise to a duty of care owed by Apand for breach of which purely economic loss may be recovered." 39 See also the references to vulnerability at [296] per Kirby J; the reference to a "known class" at [341] per Hayne J and references to powerlessness on the part of the appellants "to prevent the occurrence of the loss to which they were subjected" at [416] per Callinan J. 40 The issue of vulnerability also arose in Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 in which a regulatory authority was found to have breached a duty of care with respect to a waterside worker who contracted a disease by reason of exposure to asbestos. The authority was not the employer, but had a range of regulatory functions which the court found created the common law duty. 41 McHugh J, with whom Gleeson CJ agreed, said: "[51] The statutory authority owed a duty of care to the worker because it directed him to places of work where there were risks of injury of which the authority was, or ought to have been, aware and in respect of which, the authority knew or ought to have known that the worker was specially vulnerable. The worker's vulnerability arose as a result of the casual nature of his employment and his obligation to obey the authority directions as to where he worked." 42 See also at [93] and [104] per McHugh J; at [44] and [46] per Gaudron J and [233] per Kirby J. 43 McHugh J elaborated on the concept of vulnerability: "[100] Except in cases where a statutory authority has assumed responsibility, taken control of the situation or is under a statutory obligation to act, it seems an essential condition for imposing a duty of care on an authority that the plaintiff is vulnerable to harm unless the authority acts to avoid that harm. I use the term 'vulnerable' in the sense that, as a practical matter, the plaintiff has no or little capacity to protect himself or herself. In earlier cases, it was common to refer to the concept of general reliance or dependence as a necessary condition for imposing a duty of care on a statutory authority. As I remarked in Perre v Apand Pty Ltd, however, while the concept of general reliance has been criticised, properly understood, the concept was merely one way of testing for an important requirement in the determination of duty of care – how vulnerable is the plaintiff as the result of the defendant's acts or omissions. In a context of the common law liability of statutory authorities, general reliance is a combination of the requirements of the existence of powers in the statutory authority to ameliorate harm and the vulnerability of the plaintiff to that harm. In that sense it was an important element for all the justices in Pyrenees. Similarly in [Sutherland Shire Council v Heyman (1985) 157 CLR 424], it was an important, even decisive, consideration that the plaintiffs in that case were able to protect their own interests by making inquiries, requesting a certificate and retaining experts. In Yuen Kun Yeu v Attorney-General (Hong Kong) [[1988] 1 AC 175], the Judicial Committee of the Privy Council held that one of the factors relevant to denying a duty of care was that the plaintiff could have potentially protected themselves by inspecting publicly available records or consulting investment advisors. Similarly in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords, I thought that the likelihood of harm to the plaintiff was minimised by its capacity to protect itself." Conclusion 44 The trial judge found that the Respondent knew that the Appellant was a problem gambler and, in that sense, was aware of his vulnerability. Furthermore, the trial judge found that both the Appellant and his father had asked the Respondent to prevent the Appellant gambling to excess, specifically by refusing to cash cheques. 45 This knowledge and these requests, according to the Appellant's submissions in this Court, created a duty to advise the Appellant to resign from the club or to warn him whenever he appeared at the club and was gambling. There was also, it was submitted, a duty to refrain from making funds available by means of cashing his own or third party cheques. 46 This knowledge of vulnerability must be placed in a context that the duty is to prevent the self-infliction of harm by an individual whose autonomy the common law respects. It is also to be placed in the context where the Appellant had available to him other means of obtaining cash, perhaps not as immediate or convenient, but other means did exist. Furthermore, other clubs and forms of gambling were available to him. 47 The discussion of vulnerability in the judgments in Perre v Apand and Crimmins, 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 [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. 50 POWELL JA: This is an appeal from a Judgment delivered and orders made by Hogan A-DCJ on 14 December 1999, on which day his Honour dismissed with costs the proceedings which had been brought by the Appellant ("Mr. Reynolds") seeking to recover from the Respondent ("the Club") damages in respect of a variety of causes of action. 51 Although the bases upon which, in the Amended Statement of Claim (RAB 1-7) which was filed on his behalf, Mr. Reynolds sought to found his claim for damages were more extensive, in his Judgment Hogan A-DCJ recorded (RAB 14) that "as the case was finally conducted (Mr. Reynold's) claim was based upon negligence, breach of statutory duty and unconscionability" - the District Court has had the same jurisdiction as the Supreme Court in proceedings for "any equitable claim or demand for recovery of money or damages, whether liquidated or unliquidated … in an amount not exceeding $750,000" since clause (h) was introduced into s.134(1) of the District Court Act 1973 by the District Court Amendment Act 1997, that clause coming into operation on 22 August 1997. 52 In order that one might more readily understand the bases upon which Mr. Reynolds sought to advance those claims, it is necessary that there be provided a more extended history of the factual background leading up to the commencement of the proceedings than is normally called for in a case founded in negligence. 53 In July 1990, the relevance of which date will shortly appear, Mr. Reynolds was a young man a few months short of his 26th birthday, he having been born in September 1964. Although the materials which are before the Court do not indicate the extent of Mr. Reynolds' secondary education or any employment history prior to 1984, such materials as are before the Court would indicate that, in 1984, when he was 19 years of age, Mr. Reynolds commenced employment at the Katoomba Golf Club as a trainee golf professional. During his time as a trainee gold professional at the golf club Mr. Reynolds became familiar with poker machines and other forms of gambling and, so he said, on occasion he gambled recreationally at the Golf Club. After leaving the Golf Club Mr. Reynolds worked for a golf club manufacturer and, then, for a time, as a policeman. During the latter two periods, so Mr. Reynolds said, he continued to gamble recreationally. 54 In July 1990, Mr. Reynolds commenced to operate in partnership with his father ("Mr. Reynolds Senior") a milk-run which had been earlier acquired, the purchase price of the milk-run being provided by a loan from the State Bank in the name of Mr. Reynolds Senior and his wife, that loan being secured by a mortgage over their home. As, in such a case, would not be unexpected, the bank account for the business was a joint account with the State Bank to which both Mr. Reynolds and Mr. Reynolds Senior were signatories. 55 Although the milk-run business was carried on in partnership, Mr. Reynolds was responsible for its operation - and, seemingly, was intended to receive all the profits from it - since Mr. Reynolds Senior already owned and operated another business. The milk-run, which had about 8 wholesale customers and 250-300 retail customers, had a turnover of about $5,800.00 per week and returned an average weekly profit of approximately $1,300.00 per week. Customers were billed weekly and paid either in cash or by cheque, but mostly by cheque. 56 Servicing the milk-run involved wholesale deliveries being made during the morning, they being finished by about 11.00 a.m, and home deliveries being done in the mid to late afternoon and early evening commencing about 4.00 p.m. As a result, Mr. Reynolds had a lot of spare time during the day. 57 At the time when the milk-run was acquired, Mr. Reynolds was living with his parents in Katoomba. Because of the amount of spare time which he had during the day Mr. Reynolds started going to the Club for lunch. 58 In a statement (Exhibit "A" - Blue AB 72ff.) which had been prepared for use, and which was tendered, on the hearing, Mr. Reynolds wrote (inter alia) as follows: "4. … I started going to the Club for lunch and would stay about two hours at the most. There were regulars at the Club and I would socialise with a group of people I got to know well. Some of these regulars were gamblers and I also started to play the poker machines or bet on the TAB or Keno. If I had a win I would leave, but if I was losing I would stay longer. 5 When I went to the Club I obtained cash from the autoteller in the Club and had some cash on me to pay for my gambling. 6. By 1991 I was going to the Club to gamble every day. Initially I would lose around $100.00 a visit though sometimes I won, broke even, or lost less, either playing the poker machines or betting on the TAB or Keno. My losses each visit became progressively higher. 7. Around 1991 I was at the Club with my friend Donald McCliskey. He was one of the regulars at the Club that I had made friends with. While we were betting on the horses Donald got his cheque book out and told me words to the effect of 'I'm just going to cash this cheque with Mark' (Mark Gianisis was the General Manager of the club). I then replied words to the effect of 'Oh, can you do that here.'. He replied 'Yes' and left to cash the cheque. Some minutes later he returned with cash and continued gambling. I saw Donald do this on many occasions. 8. I saw Donald write out cheques on numerous occasions and go to Mark Gianisis for his authorisation. Mark Gianisis signed the cheques and then Donald went to the cashier to cash the cheque. The cashier was in the gaming room. This process usually took place while we were all in the gaming room. 9. In 1991 I approached Mark Gianisis and asked him to cash a personal cheque for me. He said 'Okay'. I made out the cheque to 'Cash' or 'Katoomba RSL' and Mark would sign the back of the cheque. I then took the cheque to the cashier to obtain the money. The cashier would not cash the cheque unless it was authorised by Mark or another member of the management of the Club." 59 Thereafter it became common for Mr. Reynolds to have personal cheques cashed for him at the Club, sometimes more than one such cheque being cashed on the same day. 60 Although, as I have earlier recorded, at first Mr. Reynolds would go to the Club only in the middle of the day, in late 1991 he commenced going to the Club in the evenings after he had finished home deliveries at about 7.00 p.m, staying at the Club until after the last race or closing time. At the same time he commenced to drink heavily and, as he recorded in his statement, when he started drinking heavily he became more reckless in gambling, chasing his losses, betting more to try to recover them and so losing more. 61 Later in his statement, Mr. Reynolds' wrote (inter alia): "17. I was gambling so much that I was regularly bouncing cheques on my account. I also had several binges of gambling. At these times I also cashed, at the Club, cheques drawn on our business account, as I did not have sufficient funds in my own account to support my need to gamble. My own account was overdrawn by several thousand dollars as the Bank had honoured some of my cheques even though there were no funds in the account. 18. Often if I drew cheques on the business account I ripped the cheque butts out of the cheque book to avoid there being a record of the cheques I had spent on gambling. I was desperate to obtain money to gamble and I hid the fact that I was taking it from the business. I would take cheques from the middle of the cheque book, remove the cheque butt, destroy other paper records and remove transactions from the computer records. 19. Around April/May 1992, I had a big gambling binge and lost between $20,000.00-$30,000.00. I remember the dates as it occurred while my parents were away on holidays at Ayer's Rock. I gambled with cash and I cashed personal cheques and cheques from the milk-run account. I was deeply depressed and suicidal when they returned. 20. As a result of the binge, in May 1992 I borrowed $25,000.00 from my cousin to put into the business to keep it going. I had not paid the milk bill for some weeks, amongst other things." 62 A schedule of payments, together with associated documents, prepared by Mr. Reynolds' solicitor for the purposes of the hearing (Blue AB 104ff) records that between 1 April 1992 and 3 July 1992 - the relevance of which latter date will shortly appear - Mr. Reynolds' personal account with the State Bank of New South Wales at its Katoomba branch was in debit, the debit rising from $2,747.66 on 1 April 1992 to $3,865.41 on 3 July 1992, the principal contributors to that increasing debit being five cheques totalling $1,500.00 debited to the account between 6 April 1992 - three cheques totalling $900.00 debited on 6 April 1992 and one cheque for $200.00 debited on 7 April 1992 - and 16 April 1992 - one cheque for $400.00. 63 The same payments schedule, and supporting documents, discloses that between 21 April 1992 and 27 May 1992, eleven cheques either drawn to cash or drawn in favour of the Club for sums totalling $9,540.00 were debited to the business account with the State Bank of New South Wales at its Katoomba branch - of those cheques, one - No. 00412444 for the sum of $1,000.00 had originally been deposited by the Club for the credit of its account with the National Bank of Australia at its Katoomba branch on 18 May 1992, was dishonoured on presentation on 20 May 1992 but later honoured on 27 May 1992. The schedule also discloses that between 11 June 1992 and 3 July 1992 seven cheques drawn on the business account either to cash or in favour of the Club for sums totalling a further $12,600.00 were debited to the business account - of those cheques, one - No. 00712000 for $2,000.00 - was originally deposited by the Club for the credit of its account with its bank on 22 June 1992, was dishonoured on 23 June 1992 and finally honoured on 3 July 1992. 64 The $25,000.00 which, so Mr. Reynolds said, he had borrowed from his cousin appears to have been part of the sum of $25,743.01 which was deposited to the credit of the business account on 21 May 1992. 65 In his statement, Mr. Reynolds further recorded: "21. When my parents returned from Ayer's Rock they discovered the size of the problem. My mother contacted Lifeline to find out about Gamblers Anonymous ('GA') and persuaded me to attend their meetings. They met once a week, on Monday nights in Penrith. My parents also attended separate meetings for the families of gambling addicts. 22. For about a month after I started at Gamblers Anonymous I did not attend the Club at all. I then started to go to the Club on Wednesday nights for the Karaoke evenings. 23. While I was going to GA I went to the Club and told Mark Gianisis that I had a gambling problem and that I had started going to GA. As part of the GA programme, I was encouraged to put in place measures that could prevent me having access to money for gambling. I told Mark Gianisis words to the effect of 'I have a problem. I can't control myself. Once I start I can't stop. Please don't cash my cheques or give me credit to start me off, even if I beg you'. His response was words to the effect of 'Yeah, OK mate'. 24. Around July 1992 my father took over the financial management of the milk-run in order to prevent me from having access to money. I was no longer a signatory for the milk-run account. For about a period of about two weeks my father came on the milk-run with (sic) taking payments from customers. He could only do this while he was on leave from his work. 25. I did not gamble at all for around 3 months after I started with GA. I was given a badge when I had not gambled for 60 days straight. I attended GA for approximately three months and then, thinking I was cured, I stopped attending GA meetings." 66 Mr. Reynolds' statement as to the conversation which he then had with Mr. Gianisis was accepted by Hogan A-DCJ, as also was his statement as to similar conversations which he had with Mr. Gianisis on later occasions (RAB 19). 67 In a statement (Exhibit "C"- Blue AB 81ff) prepared prior to and tendered at the hearing, Mr. Reynolds Senior wrote (inter alia): "4. In early 1992 a number of cheques drawn on the account were not met by the Bank but rather referred to drawer. I became concerned and confronted Chris. I said to him words to the effect of 'What is the problem? You have been bouncing cheques.' He replied that 'He had been gambling money from the business and losing'. He said to me words to the effect 'I gamble at the Katoomba RSL during the daytime. I have been using money from the business. I can cash cheques there drawn on the account'. I said to Chris words to the effect 'You've got to control yourself, you've worked hard and got the business doing well, you don't want to loose (sic) it all. You shouldn't go to the Club during the day, then you won't be tempted'. 5. Subsequent to this for a month or two I did not notice any more problems and I thought Chris' gambling was under control. However, around June 1992 there were more cheques referred to drawer and became apparent that Chris was gambling again. I had another conversation with him about stopping gambling. He would listen and appear to try to stop but the problem continued. 6. Around August 1992, I paid approximately $4,000.00 to clear Chris' personal account at the State Bank as he was overdrawn. It was clear to my wife and I (sic) that he had a serious gambling problem. 7. My wife and I were desperately trying to find a solution. She suggested that attending Gamblers Anonymous might help. My wife and I then did attend regular meetings of Gamblers Anonymous with Christopher at Penrith over a period of approximately six months in 1992 …. Whilst we were going to meeting (sic) Chris appeared not to be gambling. Eventually Chris said words to me to the effect 'Okay, I think I've beaten it, I can't keep going every Monday night to the meetings, I think I'm all right now.' We then stopped going to Gamblers Anonymous meetings. 8. Around July 1992 we were going to the Gamblers Anonymous meetings, I attended the bank where the milk-run's account was held. The Manager there was a long-term friend. I removed Chris as a signatory to the milk-run account so that he could not write cheques on it. I also asked the Manager to keep an eye on the account for me. 9. I wanted to do everything I could to prevent Chris' gambling. Around June 1992, I telephoned the secretary manager of the Club, Mark Gianisis. I said words to the effect of 'My son Christopher has a major gambling problem and is attending Gamblers Anonymous. I would appreciate it if you would not provide any credit to Chris at the Club. I would also like for you to call me when Chris goes to the Club so that I can come and pick him up'. Mr. Gianisis said words to the effect 'Okay, that won't be a problem'". 68 Despite Mr. Gianisis' denial of having had any conversations with Mr. Reynolds Senior, Hogan A-DCJ was disposed to accept the evidence of Mr. Reynolds as to this conversation and as to later similar conversations (RAB 19). 69 The matters to which I now refer cast more than a shadow of doubt over Mr. Reynolds' assertion that he did not gamble at all for around 3 months after he started with Gamblers Anonymous. 70 In his statement Mr. Reynolds said: "27. Soon after this I started gambling excessively again. I continued with the same methods of financing my gambling, namely cashing personal cheques and using cash. As I could not write cheques out from the business account and I had limited funds in my own account I decided to ask Mark Gianisis if I could cash third party cheques. 28. Around late 1992 or early 1993 I asked Mark Gianisis if he would cash a cheque from one of my milk-run clients. I approached Mark and said to him words to the effect of 'Can you cash this if I sign the back?'. He looked at it and said 'OK'. He agreed to cash other third party cheques on subsequent occasions. Third party cheques were drawn by customers of the milk-run and were generally payable to B.J. and C.J. Reynolds Milk Suppliers. These cheques were usually for larger amounts up to $1,000.00. They were mostly from the wholesale customers of the milk-run. They included A & S Cheeseman who had the handy store, W. Barrett who also had the handy store before the Cheesemans, A & M. Hair Pty. Ltd who had the Little Company Guest House, B.R. & D. Goodman who had a service station, K & B Carstairs Pty. Ltd. who had the Alpine Motor Inn, the Blue Mountains City Council, G & M Bechara Pty. Ltd who had a service station, the Ampol Service Station at Leura, and the Wentworth Area Health Service which ran the Blue Mountains District Anzac Memorial Hospital. 29. The third party cheques were made out to C.J. Reynolds and B.J. Reynolds, C.J. Reynolds or Reynolds Milk Supplies. Mark Gianisis only required me to endorse these cheques (on the back) and never queried the fact that the cheques were made out in favour of joint payees. He got me to write on the back of the cheque 'Please Pay Cash to Katoomba RSL Club'. He then signed the back of the cheque and I would take it to the change counter. They would check that he had signed the back and then pay me the amount of the cheque. 30. As well as cashing cheques, Mark Gianisis also provided me with credit. On a few occasions I borrowed directly from Mark Gianisis. I would say words to the effect of 'Can you lend me $500 to $1,000?'. He would agree and then loan (sic) me amounts usually between $500 to $1,000. I am not sure if these sums came from the Club or if they personal loans from Mark (sic). A few times when I got loans from Mark he took me into the office area away from the crowds. Then he actually gave me the money himself. 31. This pattern of using cash, personal cheques and third party cheques to finance my gambling at the Club continued for the rest of 1993 and much of 1994." 71 The payments schedule to which I have earlier referred reveals that the first third party cheque which was endorsed by Mr. Reynolds was one for $115.00 drawn by A & M Hair and deposited to the credit of the Club's account with its bank on 10 August 1992, that cheque being followed by one for $140.00 drawn by Alpine Motor and deposited to the credit of the Club's account with its bank on 15 September 1992, one for $47.95 drawn by A & M Hair and deposited to the credit of the Club's account with its bank on 6 October 1992, by one for $660.00 drawn by the Wentworth Area Health Service and deposited to the credit of the Club's account with its bank on 16 October 1992 and another for $869.30, also drawn by the Wentworth Area Health Service and deposited to the credit of the Club's account with its bank on 30 November 1992. 72 Although the payments schedule does not record any personal cheque or cheque drawn on the business account between 3 July 1992 and the end of December 1992, it does record that, on 7 January 1993, four cheques, one for $200.00 and three each for $300.00 drawn by Mr. Reynolds on his account with the State Bank of New South Wales at its Katoomba branch were deposited by the Club to the credit of its account with its bank. Two further cheques, one for $1,000.00 and the other for $100.00 drawn by Mr. Reynolds on his account were deposited by the Club for the credit of its account with its bank on 13 January 1993, but they were dishonoured, as were two further cheques, one for $1,000.00 and the other for $500.00 drawn by Mr. Reynolds on his account and deposited by the Club to the credit of its account with its bank on 14 January 1993. 73 Despite Mr. Reynolds' assertion (para. 21 (above)) that the pattern of using cash, personal cheques and third party cheques to finance his gambling at the Club continued "for the rest of 1993 and much of 1994", the payments schedule reveals only five third party cheques negotiated to the Club in the period 1 January 1993 to the end of October 1993, they being a cheque for $150.00 drawn by one Hands deposited by the Club to the credit of its account with its bank on 7 January 1993, a cheque for $200.00 drawn by W. Barrett deposited by the Club to the credit of its account with its bank on 11 February 1993, a cheque for $750.00 drawn by the Wentworth Area Health Service and deposited by the Club to the credit of its account with its bank on 22 February 1993 and two cheques, one for $140.00 drawn by K. & B. Castairs, and the other for $240.00 drawn by the Blue Mountains District Anzac Memorial Hospital, deposited by the Club to the credit of its account with its bank on 7 June 1993. What, in the schedule, appears to have been a third party cheque for $2,627.00 deposited by the Club to the credit of its account with its bank on 24 February 1993 is said by Mr. Reynolds Senior (Blue AB 83) to have been a cheque paid by him to the Club to clear his son's then debt to the Club. 74 It is difficult to determine from the payments schedule the nature of some of the amounts said to represent moneys paid by Mr. Reynolds to the Club for gambling purposes and debited to Mr. Reynolds' then account with the Advance Bank at its North Sydney branch between 7 January 1993 and the end of October 1993. Five amounts appear to represent the proceeds of cheques - for $50.00, $20.00, $200.00, $200.00 and $300.00 deposited by the Club to the credit of its account with its bank on 27 August 1993, 3 September 1993, 14 September 1993 and 21 September 1993 ($200.00 and $300.00) respectively - while eleven sums - $50.00, $50.00, $100.00, $200.00, $300.00, $50.00, $200.00, $100.00, $50.00, $100.00 and $300.00 debited to that account on 13 August 1993, 8 September 1993, 15 September 1993, 16 September 1993 ($200.00 and $300.00), 18 September 1993 ($50.00 and $200.00), 6 October 1993 and 21 October 1993 ($50.00, $100.00 and $300.00) - are noted in the relevant bank statements (Blue AB 197-203) as "RTL TRN Katoomba RSL Club Katoomba", a notation to be contrasted with "WDL ATM 99 Katoomba Street, Katoo" which latter notation would clearly indicate a withdrawal made at a bank's automatic teller machine; perhaps the notation "RTL TRN" records the use by Mr. Reynolds at the Club of a Bankcard in order to obtain cash or records an EFTPOS debit. 75 In his statement (Blue AB 78-80) - which appears to contain a number of inaccuracies - Mr. Reynolds continued: "32. During 1993 and 1994 the Club still continued to cash my personal cheques … Sometimes I would write a cheque knowing that I did not have sufficient funds in my account. On these occasions I asked Mark Gianisis to hold the cheques for several days before cashing them so that I could put money into my account. On other occasions the Club would cash the cheque anyway and it would often bounce. 33. Mark Gianisis was still the person I dealt with most consistently. A couple of times Mark Gianisis would refuse to give me credit or cash cheques. He would say words to the effect of: 'No, you've bounced a couple of cheques, you owe us money, we're not going to cash anymore (sic) until you've paid up'. However there was no consistent limit that he placed on me in terms of the amounts of money that I could run up as a debt to the Club. 34. On 25 November 1993 I asked the Club to cash two cheques in the sum of $1,000 during the course of my visit. The cheques were drawn from my personal cheque account and made out to cash. The cheques were subsequently dishonoured and I therefore owed the Club $2,000 plus $18.00 in dishonour fees for the two cheques. 35. I repaid this debt to the Club by instalments. A running total was maintained by Jean Field at the Club on a small piece of paper indicating payments made, and attached to the front of the cheques and the dishonour notices. They also issued me with receipts for part-payments of the debt. They were attached as part of the bundle. I cannot recall whether receipts were issued for the other payments made. 36. I repaid this debt over a period of 2½ months, although my credit arrangement was not suspended during this period." 76 The two cheques, each drawn to "cash" were deposited by the Club to the credit of its account with its bank on 30 November 1993 and were dishonoured on the following day. The $2,018.00 representing the amount of the cheques and the dishonour fee on each was not repaid by Mr. Reynolds in full, only $1,218.00 being repaid by instalments of varying amounts paid in March, April, May and June 1994 - the balance of $800.00, as I will later show, formed part of a cheque for $6,800.00 paid by Mr. Reynolds Senior to the Club in early August 1994. 77 In his statement, Mr. Reynolds continued: "37. In November 1993, I borrowed $10,000 from my former employer, Keith Knox, to help cover my gambling losses. 38. On 27 November 1993 I had a bad bust at the Club. Mark Gianisis cashed two separate cheques for me, both in sums of $1,000 which I lost on Keno. I then wrote another cheque for $1,000 for the Club to cash, knowing that I had no funds left in my account to cover it. I told Mark Gianisis words to the effect of 'I don't have enough money in my account to cover the cheque, but can you give me another $1,000 and hold the cheque until later'. He said words to the effect of 'Yes'. I wrote four more cheques, three in sum (sic) of $1,000 and one in the sum of $2,000, which were also cashed on the understanding that they could not be presented until I had funds in my account. All these funds were used to play Keno. Each cheque was signed on the back by Stuart Fitzgerald, the bar manager. This authorised the change bar to credit me with the money to play Keno. 39. My father found out that I owed the Club this $6,800 about one week later. 40. I ended up owing the Club a debt of $8,000, as I incurred further debts in addition to the $6,000 I already owed. Mark Gianisis contacted both myself and my father about this debt several times, asking when it was going to be paid. I managed to pay $1,200 of the debt in small repayments. 41. In mid-July 1994 the milk-run was sold for $65,000. My parents had put up their home as surety when we borrowed from the State Bank at Katoomba for the business. They sold the milk-run to pay off the loan and clear their home. 42. I did not return to the Club to gamble. I stopped gambling in approximately May 1994 …" 78 In his statement (Blue AB 83-84) Mr. Reynolds Senior wrote: "16. In November 1993 I approached Mr. Gianisis in person. I said words to the effect of 'Would you please stop cashing cheques for Chris. You are breaking the law by cashing third party cheques at the Club. You are also breaking the law by holding Chris' cheques knowing that there are no funds in the account. I don't think you are allowed to cash cheques in the excess (sic) of $200.00 for members in any one day'. In saying that I was in part basing it on my understanding of what was done at the Katoomba Golf Club where I was a Director at one stage and was in part bluffing. Mr. Gianisis said words to the effect of 'I don't know anything about those laws'. I then said words to the effect of 'Can you bar Chris from the Club please?'. He said words to the effect of 'I can't bar him because he hasn't done anything wrong'. 17. In late 1993 or early 1994 Keith Knox, an old friend of mine, called me and told me that he had lent Chris around $10,000. He said that Chris had originally been repaying him but that he had not made repayments for several months. I told Keith that I would start making the payments. 18. In mid-1994 I was forced to sell the milk-run business as a result of the problems caused by Christopher's gambling. I had to sell it at a loss, for an amount less than it was worth. I had to sell it to account for the gambling debts incurred by Christopher. As the loan I had obtained in order to buy the business was secured over our house I could not risk further losses. 19. On 5 August 1994 I attended Katoomba RSL to pay them an amount in excess of $6,000 to account to cheques of Chris' that he had left with them and which remained uncashed and a couple of cheques that had bounced. When I attended to do so I spoke to the assistant manager at the Club, Mrs. Jean Field, about the matter. I said words to the effect of 'You can't cash anymore (sic) cheques, I can't continue to pay'. She said words to the effect of 'I am sorry for the way things have gone, but I have no control over it, credit facilities are at the discretion of the secretary manager, Mr. Gianisis'." (The cheque given by Mr. Reynolds to the Club on 5 August 1994 was for the sum of $6,800.00 (Blue AB 235) and was deposited by the Club to the credit of its account with its bank on 9 August 1994 (Blue AB 231)). 79 Although, as I have earlier noted (para. 22 (above)), the payments schedule records that a small number of third party cheques endorsed in favour of the Club were cashed between 1 January 1993 and the end of October 1993, the pattern changed - albeit but for a comparatively short period of time - in November 1993. Between 9 November 1993 and 7 December 1993, twenty-four cheques for sums totalling $21,426.58 which had been endorsed by Mr. Reynolds to the Club were deposited by the Club to the credit of its account with its bank. The payments schedule discloses no further third party cheques endorsed to the Club by Mr. Reynolds. 80 The payments schedule for that period - by which time Mr. Reynolds had opened a new bank account - a National Flexi Account with the National Australia Bank at its Katoomba branch - records that on 15 November 1993 there were debited to that account three sums, $20.00, $50.00 and $200.00 - noted in the bank statement (Blue AB 189) as "Cash - Flexipay Katoomba RSL Club", a notation which suggests to me the use of a Bankcard to obtain cash at the Club - and that on and between 19 November 1993 and 26 November 1993 five cheques - one for $600.00, three for $1,000.00 and one for $500.00 which had been cashed at the Club were debited to Mr. Reynolds' account. The payments schedule records no further payments by Mr. Reynolds or Mr. Reynolds Senior to the Club other than those to which I have earlier (paras 27, 29 (above)) referred representing instalments paid by Mr. Reynolds in respect of the cheques which were dishonoured on 1 December 1993 and that made by Mr. Reynolds Senior in August 1994 representing the balance unpaid in respect of the dishonoured cheques and the amount of the cheques drawn by Mr. Reynolds on 27 November 1993, which cheques were seemingly never presented. 81 The total of the various sums, to which I have earlier referred, recorded in the payments schedule is $56,968.83. That sum, so it was said on the hearing of the appeal (T.7-8), represented those amounts which were advanced by the Club to Mr. Reynolds after the time when, so it was said, the Club was aware that Mr. Reynolds had a severe gambling problem and after a time when there had been a specific request made that Mr. Reynolds not have moneys further advanced to him. 82 Although, in his statement, Mr. Reynolds said that "(o)nce (he) was away from the environment of the Katoomba RSL (he) did not have a problem with compulsive gambling", and although having since late 1994 been in regular employment and having by the time of the hearing come to "(o)wn and run a security firm called CR Consolidated Security Services Limited" (Blue AB 72), these proceedings do not appear to have been commenced until some time during 1998 - the Amended Statement of Claim, to which I have earlier referred, was filed on 12 March 1999. 83 Although, as I have earlier (para. 2 (above)) recorded, the bases upon which in that Amended Statement of Claim Mr. Reynolds sought to found his claim for damages were more extensive, as the case was finally conducted his claim was based upon negligence, breach of statutory duty and unconscionability. Although the Amended Statement of Claim is rather more discursive, the following paragraphs (RAB 5-7) sufficiently reveal the conduct relied upon by Mr. Reynolds to establish the various bases upon which he relied to establish his claim: "14. At no time did the Club attempt to remove the Plaintiff from its premises, or to stop or discourage him from gambling. 15. In the premises, the encashment of cheques, making of advances and entry into gambling contracts by the Club with the Plaintiff was (1) unjust within the meaning of the Contracts Review Act 1980 ('the CRA') or alternatively (2) unconscientious and unconscionable in equity. 15A. Further and in the alternative the Club owed to the Plaintiff a duty of care to prevent foreseeable harm. 15B. In breach of its duty of care the Club negligently caused the Plaintiff loss and damage. Particulars of negligence (i) Allowing the Plaintiff to resume and continue gambling in the Club after having undertaken and agreed that to ensure that the Plaintiff did not so resume and continue gambling. (ii) Making encashments and advances, including the encashments and advances pleaded at paragraphs 4 and 5 above. (iii) Failing to take any or adequate steps to stop or discourage the Plaintiff from gambling at the Club. (iv) Allowing the Plaintiff to gamble at the Club when to the Club's knowledge the Plaintiff was a gambling addict who could not cease or control his gambling. (v) Facilitating or procuring the Plaintiff's gambling at the Club by making encashments and advances, including the encashments and advances pleaded at paragraphs 4 and 5 above. (vi) Cashing personal and third party cheques for or on behalf of the Plaintiff in circumstances in which: · some or many of the Plaintiff's previous cheques had been dishonoured; · personal and third party cheques were cashed by the Club for or on behalf of the Plaintiff with excessive frequency; · there was no limit on the amounts for cash provided to the Plaintiff by the Club pursuant to the encashment of personal and third party cheques. (vii) Cashing personal and third party cheques for or on behalf of the Plaintiff where to the knowledge of the Defendant the purpose of the said encashments was for the Plaintiff's gambling and not for the purpose of the Plaintiff purchasing liquor, accommodation or other services from the Defendant. (viii) Failing to have appropriate guidelines and policies in respect of cashing personal and third party cheques, including in particular failing to have appropriate guidelines and policies such as would have prevented the encashments referred to in the above sub-paragraphs (vi) and (vii) (ix) Failing to comply with the Registered Clubs Act, including but not limited to sections 9A(5A) and 45 (sic) of the Registered Clubs Act. 15C. Further, or in the alternative, the Defendant was a person on whom a duty was imposed by the Registered Clubs Act. 15D. The Plaintiff, was a person, or one of a class of persons, for whose benefit the said duty was created. 15E. The Defendant failed to perform this duty. 15F. In the premises, the said failure to perform the duty gives rise to a claim on the party (sic) of the Plaintiff against the Defendant for damages for breach of statutory duty causing him harm." 84 When introduced into the Registered Clubs Act 1976 on 1 August 1990 following the coming into operation of the Registered Clubs (Amendment) Act 1990, s.9A(5A) of the Registered Clubs Act 1976 provided as follows: "9A. Conditions relating to certificate of registration ……… (5A) It is a condition of the certificate of registration of a club that the secretary of the club must not permit or suffer a cash advance to be made available on the Club premises by or on behalf of the club otherwise than as a prize recorded by a poker machine." Section 9A(5A) was amended with effect from 1 October 1993 by the Registered Clubs (Amendment) Act 1993 so as to read as follows: "9A. Conditions relating to certificate of registration ……… (5A) It is a condition of the certificate of registration of a club that the secretary of the club is not to provide a cash advance on the club premises, or permit or suffer a cash advance to be provided on the club premises on behalf of the club, otherwise than as a prize won as a direct or indirect consequence of operating a poker machine in accordance with this Act and the other conditions to which the registration of the club is subject." However, s.45 of the Act which at all times had dealt with unauthorised persons using defined premises of a registered club appears to have no relevance whatsoever to the claim based on the provisions of the Act sought to be advanced by Mr. Reynolds. 85 The principal witnesses called in Mr. Reynolds' case on the hearing before Hogan A-DCJ were Mr. Reynolds and Mr. Reynolds Senior. They were supported by Dr. Clive Allcock, a senior consultant psychiatrist at the Cumberland Hospital and Clinical Senior Lecturer at the Department of Psychological Medicine and the Department of Psychology at the University of Sydney who had earlier provided to Mr. Reynolds' solicitor a report (Exhibit "S" - Blue AB 63-64) which read in part as follows: "The issue you have asked me to address is a retrospective analysis of his behaviour during the years of 1990 to 1994 when he was reportedly gambling excessively and obtaining money for that gambling quite frequently by the way of cashing cheques at the Leagues Club (sic) where the gambling took place. It is naturally not my domain to comment on the rights and wrongs of any ways in which he was permitted to obtain that money but to make an assessment of his gambling at the time, as best one can do with hindsight. ……… However I did administer the South Oaks Gambling Screen (SOGS) and the DSM IV diagnostic criteria to him. On the SOGS he achieved a score of 16 based on his recollection of his behaviour at that time. From what he tells me of the amounts of money that he was losing and from my experience of problem gamblers I would have no reason to doubt that the answers that he gave to that questionnaire would likely reflect his behaviour at that time. A score of 16 is a very high score indicating a serious problem. It is regarded by counsellors in Australia that anybody who scores 10 or more is in the serious problem category and it should be noted that this is a conservative estimate as overseas counsellors tend to favour a lower point of 5 or more before making any diagnosis of Pathological Gambling for their clients. Likewise on the Diagnostic and Statistical Manual, (DSMIV) which is the diagnostic manual used by the American Psychiatric Association and accepted as a useful diagnostic guide worldwide, Mr. Reynolds achieved a score of 8 out of 10 on the questions asked. A score of 5 or more is deemed to provide a diagnosis of Pathological Gambling. He indicated to me that he ceased gambling in 1994 largely because he had lost everything. His father had put money into the business which was sold, and he had no money, no car and no assets at all. He did return to gambling over the time just after the loss of the milk run, and on occasions did lose all the money that he had but he found that gradually the gambling dropped out of his life and it has reached a stage now where he is an infrequent controlled gambler, and has rehabilitated himself to the extent of having built up his own business in the security field. As a conformation (sic) of his activities at that time he showed me photocopies of some cheques dated 27-11-1993 which had been handed over by him but ultimately held by the club because he had told them not to cash them. They totalled several thousand dollars in amounts of $1,000.00 and $2,000.00 cheques. This would further support an extreme cash flow as part of a significant gambling problem. You have asked me to address the issue of whether during the period described above Mr. Reynolds could be said to have a gambling problem, the nature of that problem and the signs of it. It is clear that he did have a gambling problem at that time in that he was gambling more than he could afford in terms of allowing his business to function appropriately and that he also had difficulty stopping his gambling because after any amounts of money were lost he would cash further cheques and continue to gamble with that. The question as to the signs of it would be simply on the shear (sic) nature of the frequency of cashing cheques. Gamblers may manifest obvious signs such as anxiety, irritability and tension, but beyond this it is hard to see any physical sign as you would see in the case of somebody who is drunk or under the influence of drugs. However clearly if somebody is cashing a number of cheques in the course of any one day and repeating this pattern on many days one would have to be highly suspicious that they were in the grips of a repetitive pattern of behaviour leading to escalating losses and that they indeed were suffering from problem gambling. It is difficult to see how any reasonable person could view this situation otherwise." 86 In addition, there were admitted provisionally (Black AB 77, 80) as Exhibit "G", an extract from the report of Sir Laurence Street on his inquiry into the establishment and operation of legal casinos in New South Wales (Supplementary Blue AB 1) the Executive Summary from the Independent Pricing and Regulatory Tribunal of New South Wales Report 1998 (Supplementary Blue AB 27) and the Productivity Commission 1999 Australia's Gambling Industries Draft Report (Supplementary Blue AB 43), and, as Exhibit "H" a report by one J. Connolly, who described himself as a financial and problem gambling counsellor, in which he set out what, in his opinion, were the policies and procedures as to gambling which constituted "best practice" for the club industry (Blue AB 85). 87 The principal witness called on the hearing on behalf of the Club was Mr. Gianisis. His evidence was that at no time did he know that Mr. Reynolds had a gambling problem and he denied that Mr. Reynolds had ever told him that he had a problem or asked him not to cash cheques. Mr. Gianisis further said that, although, on occasion, a cheque which had been cashed for Mr. Reynolds might have been dishonoured, those occasions were infrequent and, when a cheque was dishonoured, no further cheques were cashed until the amount of the dishonoured cheque had been paid. Mr. Gianisis further said that he was not in the Club on 27 November 1993 when the cheques for sums totalling $6,000.00 were cashed. Mr. Gianisis also said that it was not the Club's practice to extend credit and that on occasions when cheques were cashed they were banked promptly. After 27 November 1993, so Mr. Gianisis said, no further cheques were cashed for Mr. Reynolds. In addition, as I have earlier (para. 19 (above)) noted, Mr. Gianisis denied that Mr. Reynolds Senior had ever spoken to him about his son's gambling problem. 88 Mr. Fitzgerald, who was the bar manager at the relevant time, was also called to give evidence on behalf of the Club. He said that he was not aware that Mr. Reynolds had a gambling problem. He also said that he, from time to time, cashed cheques for Mr. Reynolds and that, in particular, it was he, rather than Mr. Gianisis, who was not in the Club premises at the time, who cashed the cheques for $6,000.00 which Mr. Reynolds said were cashed for him on 27 November 1993. On that occasion, so Mr. Fitzgerald said, on each occasion when Mr. Reynolds sought to have a cheque cashed, he (Mr. Fitzgerald) asked Mr. Reynolds whether he could "cover" the cheque and it was only when he was assured that Mr. Reynolds could do so that he cashed the cheque. Mr. Fitzgerald said that credit was never provided in the Club. 89 Mrs. Field, who was the Assistant Secretary Manager of the Club at the time, was also called to give evidence on the hearing. She said that she had no knowledge that Mr. Reynolds had a gambling problem. Mrs. Field further said that it was the Club's practice that all cheques which were received by the Club, including those received from Mr. Reynolds, were to be banked promptly - banking by the Club then occurring at least twice each week - and that she had never been instructed by Mr. Gianisis or any one else in the Club to hold back from banking a cheque which had been received from Mr. Reynolds. The cheques which were cashed for Mr. Reynolds in November 1993 were the last cheques which had been cashed for him. 90 In his Judgment, Hogan A-DCJ after recording the evidence which had been tendered on each side on the hearing continued (RAB 20-21): "… The plaintiff was but one of very many people who used the club's facilities, gambled there, and for whom (Mr. Gianisis) authorised cheques to be cashed. Nevertheless the evidence in this case goes beyond any inference that it might be suggested he should have drawn from the plaintiff's behaviour. I do not think that the cashing of cheques on its own should have had any particular significance for Mr. Gianisis. But the club's secretary manager had also the plaintiff's positive statements to him that he had a problem with gambling, later confirmed by the plaintiff's father. That, combined with what had happened, should have brought home to him that in all probability the plaintiff was using the money that he was obtaining in order to gamble, and that he had what any layman would call a problem with gambling. That is, it was likely that over a period the plaintiff would probably lose more money than was prudent for him. In summary, therefore, I am prepared to find the following facts: 1. Over the period from April 1992 to November 1993 the plaintiff was a problem gambler. 2. From about May 1992 Mr. Gianisis, the secretary manager of the club, ought to have been aware of that fact. 3. Over that period the club cashed cheques or otherwise made cash available to the plaintiff by a series of transactions, the total of which equals the amount claimed in this action. 4. The club was aware that the plaintiff would use that cash or a substantial part of it, for the purpose of gambling. 5. Over that period the plaintiff lost money at gambling. 6. The plaintiff's losses exceeded the amount claimed." 91 Having done so, his Honour continued (RAB 21-23): "Do these facts entitle the plaintiff to recover the amount claimed? The first problem that arises in my mind, with respect to all three causes of action on which the plaintiff relies, is that of causation. By providing money to the plaintiff the club did not directly cause economic loss to him. Such loss as he did suffer occurred afterwards, when the plaintiff, in the exercise of a free choice about what he did with what was then his own money, lost in the process of gambling. In fact, in respect of any one particular transaction listed in the payments schedule in exhibit B, he may not have lost that particular sum of money at all. He might have spent some part of it on a meal, or on drinks for himself and his acquaintances. If he gambled with any part of it, he did not necessarily lose it. He did, on the evidence, sometimes win. Admittedly he then later lost his winnings, and over the course of time his losses exceeded his winnings by a substantial sum. But that was the result, not of his having from time to time obtained some cash from the club, either by loan or by cashing cheques, but of a whole series of contingencies. Each time the plaintiff placed a bet he paid a sum of money in exchange for a chance that, in certain events, he might receive back a larger sum. Sometimes a sum considerably larger than his bet might well have been at stake. In addition, the activity itself gave him some psychological gratification. In economic terms, he received a valuable consideration for his bet. I must confess that I do not understand the excitement. I am not a gambler. Whenever I have been to a club or casino I have been impressed by the absence of any sign of joy, delight or pleasure on the faces of those who are gambling. After a long career as a common lawyer, I am very much aware of the suffering that is caused, to the gamblers themselves, and more poignantly to their families, by the affliction of compulsive gambling. The plaintiff, however, was a free citizen, and a member of the club. He was responsible for his own actions. I do not accept the submission that he did not have a free will to exercise. I did not understand Dr. Alcock to say so, and even if he had, I would not have been persuaded. The plaintiff is quite able now to gamble occasionally, and to keep it in control. If the plaintiff found that he got pleasure from the activity of gambling, he was entitled to do so in those premises, which were licensed for the purpose. If, as a result of his psychological make up, his desire for the experience and its continued repetition overrode his prudence, his losses resulted from that fact, and the choices that he then made, not from the activity of the club which had beforehand enabled him to have the cash with which to gamble by a series of transactions which he initiated and which were within his legal rights." 92 Having made that observation, Hogan A-DCJ then turned to consider, first, Mr. Reynolds' claim based upon negligence. In this regard, he wrote as follows (RAB 23-27): "Coming to the cause of action founded on negligence, the questions arise whether the club owed a relevant duty to the plaintiff, and, if so, what was its ambit in the particular circumstances of this case? The plaintiff's loss was pure economic loss. Let it be conceded that it was foreseeable. The High Court, in Perre v. Apand Pty Ltd [1999] HCA 36 (12 August 1999) has recently reaffirmed that there is no general rule that one person owes to another a duty to take care not to cause reasonably foreseeable financial harm. As Gleeson CJ remarked, 'The consequences of such a rule would be intolerable'. However, as a number of decisions have shown 'there are circumstances in which the law recognises a duty of care such as will permit recovery of pure economic loss'. One classification of the categories is referred to by McHugh J at para. 96 of Perre v. Apand Pty. Ltd. The circumstances of this present case do not come within any category which has been held in any decided case to give rise to the duty of care. I am asked, in effect, to extend the categories. I am not prepared to do so. It is not a question whether I feel that it would be fair and just to impose liability upon the defendant. As McHugh J said in Perre v. Apand (at para. 80), 'almost everyone would agree that courts should not impose a duty of care on a person unless it is fair, just and reasonable to do so. But attractive as concepts of fairness and justice may be in appellate courts, in law reform commissions, in the academy and among legislators, in many cases they are of little use, if they are of any use at all, to the practitioners and trial judges who must apply the law to concrete facts arising from real-life activities'. His Honour also acknowledged, (at para. 89) the difficulties caused for those of us who operate at first instance by the need to read numerous and lengthy academic articles and judgments - his being one of them - to find out what the law is. Each of the seven judges in that case delivered a separate judgment. I do not propose to expound them, or to enunciate the criteria by which the court decided that the categories might be extended. I could enjoy doing so, but I do not think that it is within the duty statement of an acting judge of the District Court to spend the time that would be needed. I was not referred to any part of the judgments that positively encouraged me to extend the categories in this case. I discern enough, even from my cursory reading of them, to see clearly that I should not. McHugh J (para. 100 &ff) discusses a number of considerations relevant to denying or imposing a duty of care in cases of pure economic loss. One in particular strikes me as having very great significance in this case. That is the consideration of unreasonable burdens on the autonomy of individuals (Paras. 114-117). He said, 'One of the central tenets of the common law is that a person is legally responsible for his or her choices. It is a corollary of that responsibility that a person is entitled to make those choices for him or her self without unjustifiable interference from others. In other words, the common law regards individuals as autonomous beings entitled to make, but responsible for, their own choices. The legal doctrines of duress, undue influence and criminal liability are premised on that view of the common law'. That freedom, and that responsibility, belonged to the plaintiff as well as to the club. Here it is relevant to ask what was the ambit of any duty that the club might have owed to the plaintiff. In other words, what should it have done to prevent him from losing money at gambling? Should it have barred him from the club? He had not broken any rule which entitled it to do so. Should it have allowed him to use the facilities of the club other than the gambling facilities? There is no suggestion that the rules of the club would have permitted it to take that action either. Should it have prevented him from using the ATM machine on the club premises? Again it would have had no right to do so. Should it have refused to cash his cheques? Eventually, a situation was reached when it was moved to do so, because there was an unpaid debt. But until that time was reached it was entitled even though not obliged, to negotiate his bills of exchange when he requested it to do so. How was the club to identify the class of people to whom it owed a relevant duty? Did it owe a duty to all its members to ensure that they did not lose any money by gambling? But some have to lose in order that others may win. Did it owe a duty only to those who were problem gamblers to its knowledge? How is it to be expected to know? Some people bet astronomical amounts, and might well be problem gamblers, but have enough money and resources to be able to continue to bet. Should the club confine it solicitude to those who were betting more than they could afford? How was it to determine how much a particular member should be allowed by it to bet? Most club members would regard it as intolerable if any club official were to form an opinion about their prudence in the extent of their gambling and thereupon attempt to place restrictions upon their ability to use the facilities of the club of which they were members. They would feel themselves entitled to reply, using language more or less colourful, 'It is my money. I may do with it as I wish.' Again, although the club may have known that the plaintiff would gamble with the money that he obtained, it did not induce him to do so. The facilities were there for him to use or not as he chose. He could have taken steps to prevent himself from further loss by imposing a limit upon his own gambling and stopping when he reached it. He was not induced by any conduct of the club to refrain from taking that step. I see no reason why the law should step in and impose a duty on the defendant to protect him from the risk that resulted in his not taking it. Lastly, the plaintiff was not really dependent upon the club, in any real sense, in obtaining the money that he used to gamble to his detriment, or in doing the gambling. Some of the money he brought with him, in the form of cash that he received from his customers. Some he obtained from the ATM machine. If that had not been available at the club, there were no doubt other ATM machines that he could have used on his way to the club. There may well have been other people available to him who might have been prepared to cash his cheques. If he had not been able to use the facilities of the club for gambling, there were plenty of other outlets, such as the local TAB. Evidence was admitted, over objection, from Mr. Connolly about policies and procedures which it was suggested constitute best practice for the club industry. A number of other reports were admitted in exhibit G also over objection, which related to the control of gambling. That material might well be relevant to a Parliamentary committee considering draft legislation. I do not think that it is of any assistance to me in considering the policy considerations that underlie a decision whether to extend the common law categories of liabilities for pure economic loss. Policy considerations are undoubtedly involved in that decision. See, for example, Perre v. Apand Pty Ltd , per Gaudron J at para. 31, McHugh J at 102, Kirby J at 259, 297 and Callinan J at 389,393. Policy considerations are also involved when governments consider, as they should, whether gambling facilities are perhaps too widely encouraged in the community for the common good. But the concept, or the range, of policy considerations is not the same in both cases. Parliaments have access to a far greater body of knowledge and have available a far greater range of remedies than do the courts, which are involved in a process of incremental change in one area only of the common law. Although I did not reject the tender of the material, I did not find any of it useful to me in deciding the issue that was presented to me. In my opinion, the defendant did not, in the circumstances of this case, owe a duty of care to the plaintiff to prevent harm to him from his excessive gambling." 93 His Honour then turned to deal, albeit but briefly, as the following passage in his Judgment (RAB 27-28) makes clear, with what were the other causes of action advanced by Mr. Reynolds: "The other causes of action on which the plaintiff relies may be summarily dealt with. I am not satisfied that the relationship between the plaintiff and the club was such that it had any superior position or bargaining power, or that it made any unconscientious use of the relationship in providing him with cash at his request. Even if the club were in breach of the condition of its licence imposed by S.9A(5A) of the Registered Clubs Act, which I very much doubt, that Act did not expressly confer a private right of action. Nor am I able to detect any legislative intention to confer such a private right. In any event, as I have already held, the action of the club was not the cause of the plaintiff's loss." 94 Leave to appeal not being opposed, that leave was granted on 17 July 2000. 95 The grounds of appeal taken in the Notice of Appeal were as follows (RAB 29): "Given his findings of primary fact, the trial judge erred in: 1. Holding that the appellant's losses were caused by an exercise by him of free will. 2. Holding that the respondent did not owe the appellant a duty of care to prevent foreseeable economic loss. 3. Failing to hold that the respondent breached its duty of care. 4. Holding that the respondent had not acted unconscionable (sic) in equity." 96 When the appeal was called on for hearing Mr. I.D. Temby QC appeared with Mr. J. Stoljar for Mr. Reynolds while Mr. C.J. Birch SC appeared with Ms. N. Butler for the Club. 97 In outline, the submissions advanced on behalf of Mr. Reynolds proceeded along the following lines: Negligence (a) The Club owed Mr. Reynolds a duty of care to prevent him suffering economic loss: (i) Mr. Reynolds was a member of a readily ascertainable class, being members, or the guests of members, of the Club, who used the gambling facilities provided by the Club; (ii) Mr. Reynolds was a member of that class who was vulnerable, in the sense that, being a problem gambler, he would, more probably than not, sustain economic loss if he were to use the gambling facilities provided by the Club; (iii) at least from May 1992 the Club was aware that Mr. Reynolds was a problem gambler and that it was more probable than not that he would suffer economic loss unless his use of the gambling facilities provided by the Club were prevented or at least restricted and not facilitated; (iv) the Club was in a position to control the situation in the sense that, even if it could not prevent Mr. Reynolds using the gambling facilities provided by the Club it could refrain from facilitating Mr. Reynolds' use of those facilities; (b) the Club failed to observe the duty which it owed to Mr. Reynolds at least in the sense that, by cashing cheques, or by not limiting the amount for which on any day cheques might be cashed, it facilitated Mr. Reynolds' use of the gambling facilities provided in the Club; (c) by not declining to cash cheques at all and by not imposing a limit on the amount for which on any given day, cheques might be cashed, the Club facilitated Mr. Reynolds' use of the gambling facilities provided in the Club and, thus, caused him to lose the sums which he sought to recover in the action. Unconscionable conduct (a) the fact that Mr. Reynolds was a problem gambler put him in a position of special disadvantage so far as the Club was concerned, of which position of special disadvantage the Club, as from May 1992, was aware; (b) by facilitating Mr. Reynolds' use of the gambling facilities provided in the Club, the Club took advantage of Mr. Reynolds' position of special disadvantage so as to profit from Mr. Reynolds' continued gambling and his continued losses. 98 As the outline of the case in negligence sought to be made out on behalf of Mr. Reynolds makes clear, Mr. Temby, when seeking to develop that outline, did not seek to submit that there was any general rule that a person owes to another a duty to take care not to cause that other reasonably foreseeable financial harm - in the light of the decisions of the High Court in Caltex Oil (Australia) Pty. Limited v. The Dredge 'Willemstad (1975-1976) 136 CLR 529; Perre v. Apand Pty. Limited (1999) 198 CLR 180; 73 ALJR 1190; 164 ALR 606; Tepko Pty. Limited v. Water Board (2000-2001) 75 ALJR 775; 178 ALR 634 such a submission would have been difficult, indeed, to sustain. Rather, as that outline would suggest, Mr. Temby sought to submit that, despite the varying approaches which may be found in the various judgments in the High Court in Perre v. Apand Pty. Limited, the decision of the Court was such as to support the finding of a duty of care on the part of the Club to prevent Mr. Reynolds suffering financial loss. 99 Of the varying approaches which may be found in the various Judgments in the High Court in Perre v. Apand Pty. Limited, that which Mr. Temby appeared to favour was what he described as the "salient features" approach adopted by Gummow J 198 CLR at 255 et seq with which approach Gleeson CJ 198 CLR at 194-195 appeared to agree. 100 Despite the differing forms of methodology which may be found in the various Judgments, it seems to me that, upon analysis, in the end, six of the Judges relied upon the same features of the case when coming to the conclusion that the defendant owed to at least some of the plaintiffs a duty of care to protect them against economic loss which duty of care it had failed to observe. 101 Thus, features upon which, despite their varying forms of methodology, Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ relied for finding that that duty of care existed were that, prior to inviting those of the plaintiffs who were members of the partnership referred to as the Sparnon Partnership to participate in growing the experimental group of potatoes "with Saturna seed to be supplied by (it)", the defendant was aware that others of the plaintiffs were commercial growers of potatoes which they were accustomed to supply to purchasers in Western Australia, and that Western Australian regulations prohibited the importation into that State of potatoes grown on a property within a radius of 20 km from a known outbreak of bacterial wilt within the previous five years; that the defendant knew, or ought to have known, that the seed potatoes which it supplied to the Sparnon Partnership for the purpose of growing the experimental crop had been grown in an area where bacterial wilt had been detected and that the defendant was in a position of control in the sense that it could have refrained from supplying the Sparnon Partnership with seed potatoes grown in that area. In addition, their Honours relied upon the fact that although the plaintiffs were vulnerable, they were unaware of that fact and, thus, were not in a position where they were able to protect themselves from the harm which would flow if infected seed were supplied to and grown on the property farmed by the Sparnon Partnership. 102 That Gaudron J had regard to much the same features of the case is, I suggest, revealed in the following passage 198 CLR at 201-202 in her Honour's Judgment: "Where a person is in a position to control the exercise or enjoyment by another of a legal right, that position of control and, by corollary, the other's dependence on the person with control are, in my view, special factors or, which is the same thing, give rise to a special relationship of 'proximity' or 'neighbourhood' such that the law will impose liability upon the person with control if his or her negligent act or omission results in the loss or impairment of that right and is, thereby, productive of economic loss. The appeal As earlier indicated, the circumstances of this case are analogous but not truly comparable with those in Bennett, Hawkins and Hill . The main difference is that, in those cases, the right involved was a right peculiar to the plaintiff. In this case, the rights involved are general rights, namely, the right to sell potatoes in the Western Australian market and the right to use one's land and equipment for the production of potatoes for that purpose. So far as concerns persons not resident in Western Australia, those rights can only be exercised or enjoyed by those who satisfy the conditions imposed by the law of Western Australia for the entry of potatoes into that State. More precisely, the rights are rights which can be exercised or enjoyed only by members of a particular class. And in fact, they were exercised or enjoyed by some only of that class. The consideration that the legal rights involved in this case are rights which attach to members of a class rather than to an individual, is, to my mind, of no significance. There is no principled basis upon which a distinction can be drawn between rights which are peculiar to an individual plaintiff and those which inhere in a plaintiff as a member of a particular class. In that is so even if the members of that class cannot be identified with complete accuracy. Although it would not be strictly accurate in this case to describe the respondent as being in a position of control, its relationship with the appellants is closely analogous to that which obtains where one person is in a position to control the exercise or enjoyment of a legal right by another person. In this case, the respondent knew that there was a class of persons who availed themselves of the right to sell potatoes in the Western Australian market and/or who used their property and equipment to produce potatoes for that market. It knew that those who did so would lose those rights or would have them impaired for a period of five years if bacterial wilt were discovered within 20 km of the place or places in which their potatoes were grown, cleaned, washed, graded or packed. And the respondent knew or ought to have known that, if bacterial wilt were to be transmitted to potatoes grown within that 20 km zone, those persons who grew potatoes for the Western Australian market or who used their land and equipment for that purpose were powerless to protect their own interests. In my view, where a person knows or ought to know that his or her acts or omissions may cause the loss or impairment of legal rights possessed, enjoyed or exercised by another, whether as an individual or as a member of a class, and that that latter person is in no position to protect his or her interests, there is a relationship such that the law should impose a duty of care on the former to take reasonable steps or to avoid a foreseeable risk of economic loss resulting from the loss or impairment of those rights." 103 It is pertinent to add that, despite the varying approaches revealed their Honours' various judgments, in each of them regard appears to have been had to one or more of the following policy questions: (a) "the law's concern to avoid the imposition of liability 'in an indeterminate amount to an indeterminate time to an indeterminate class'"; (b) the law's concern not unduly to restrict a person's pursuit of her or his legitimate commercial interests; and (c) the law's concern not unduly to impose unreasonable burdens on the autonomy of individuals, individuals for the most part being free to make, but responsible for the consequences of, their own choices. 104 Although, in developing the case in negligence which Mr. Reynolds sought to advance, Mr. Temby placed his primary emphasis upon the decision of the High Court in Perre v. Apand Pty. Limited, in the course of his submissions he also drew attention to the Judgment of Wood CJ at CL in Preston v. Star City Pty. Limited [1999] NSWSC 1273 and the Judgment of Naughton DCJ in American Express International v. Famularo 19 February 2001 (unreported). 105 Preston v. Star City Pty. Limited was an appeal from Master Harrison who had refused to strike out a plaintiff's Statement of Claim other than for three paragraphs relating to the adequacy with which the plaintiff's claim for damages was pleaded and who had given the plaintiff an opportunity to amend the Statement of Claim in order to cure the deficiencies identified in those paragraphs. The plaintiff having filed an Amended Statement of Claim which not only dealt with the paragraphs struck out but also alleged matters in support of additional causes of action based upon undue influence/unjust enrichment and unconscionable conduct, Wood CJ at CL was thus concerned to determine whether any of the causes of action sought to be raised was capable of being supported in law. Since Wood CJ at CL held that the case which the then plaintiff sought to found upon what was said to be a breach of statutory duty - inter alia, by supplying him with complimentary products, services and privileges including liquor free of charge, and providing a cheque cashing facility for his use - was incapable of being supported in law, I set it to one side. 106 The case in negligence which the then plaintiff sought to mount alleged that the then defendant knew or ought to have known: (a) that he was a regular "high roller" patron and problem gambler; (b) of the potential for its casinos to cause harm to the public interest, including financial, social and personal harm to its patrons; and, in particular, to its regular and "high roller" patrons, due to problem gambling; (c) of the importance of conducting its operations in a manner consistent with the minimisation potential for such harm, and so as not to increase of exacerbate that potential; and that, as a consequence of those matters, its operations, its statutory duties and the fact that the plaintiff was a regular patron of its casinos, the defendant owed him a duty to exercise reasonable care and skill: (d) not to induce him to take part, or to continue to take part, in gaming in its casinos; (e) not to provide him with liquor free of charge in the general casino area, in the absence of a direction from the Casino Control Authority; (f) not to permit him to take part in gaming while intoxicated; (g) to conduct its operations in a manner consistent with the minimisation of the potential for harm to him identified, and in a manner which did not increase or exacerbate that potential. 107 The case based upon undue influence/unjust enrichment which the then plaintiff sought to mount alleged: (a) that the then defendant was a large, financially secure, corporation experienced in commercial financial matters, and, specifically, the business of operating a casino licence to maximise profit, and that between November 1996 and about March 1998 he was - (i) a regular patron of its casinos; (ii) a "high roller" and problem gambler; (iii) allowed by the defendant through its servants or agents, to gamble at its casinos while intoxicated; (iv) supplied by the defendant through its servants or agents with alcohol on its premises when intoxicated; (v) supplied by the defendant with "switched" (alcoholic) drinks; (vi) influenced by the defendant to order alcoholic drinks instead of non-alcoholic drinks; (b) that the then defendant engaged in the conduct referred to in (a)(iii) above knowing that this could: (i) have a detrimental effect on his ability to take part in gaming in a manner which did not diminish his prospects of winning; (ii) impair his judgment, reasoning and control, and impair his appreciation of the consequences of the offer and acceptance of inducements; (iii) increase the prospect that he would continue to gamble and lose; (c) that the defendant engaged in the conduct referred to in (a)(iv-vi) with the intention of intoxicating, or further intoxicating, him, or with reckless indifference as to whether it had such effect and with the knowledge referred to in (b); (d) that between about January 1997 and March 1998, as a regular patron, "high roller" and problem gambler, he was induced to by the defendant to take part in gaming by - (i) informing him that if he remained a "high roller" patron, it would supply him with complimentary products and services and provide a cheque cashing facility for him; and (ii) did so, when it knew or ought to have known that he had already suffered substantial gambling losses; (e) that by reason of the matters referred to in (a) to (d) he was unable to exercise an independent, objective and "informed judgment and control" concerning his decisions whether or not to take part in gaming, or to continue to take part in gaming when he had already suffered substantial gaming losses, concerning the size and number of bets he placed, and concerning the manner of his gaming generally; and in particularly was unable to appreciate whether those decisions were, in all the circumstances reasonable, prudent and in his overall best interest; and that the defendant knew or ought to have known of these circumstances; (f) that by reason of the matters in (a) to (e) the defendant was in a relationship which permitted it to exercise undue influence over him, and that it did in fact exercise that undue influence over him, in relation to decisions of the kind mentioned; (g) that between November 1996 and March 1998 he suffered gambling losses in the defendant's casinos, and that by reason of the matters alleged in (a) to (f) the defendant was unjustly enriched at his expenses. 108 The case of unconscionable conduct which the then plaintiff sought to raise relied upon the matters referred to in the preceding paragraphs. 109 When he came to deal with the case in negligence sought to be raised by the then plaintiff, Wood CJ at CL, after referring to a number of decisions of the High Court including - at some length - Perre v. Apand Pty. Limited said: "118. In the circumstances outlined I am not persuaded that the common law count is so manifestly groundless or untenable as to justify striking it out. The evolving nature of the tort of negligence and the incremental approach that appears to be favoured ( Perre v. Apand Pty. Limited at par. 28 per Gaudron J; par. 93 and 94 per McHugh J; par. 232 per Kirby J; par. 333 per Hayne J and par. 405 per Callinan J) make it inappropriate to take this step merely because no category of case of this kind has been recognised in this country." Having done so, his Honour then referred to several cases in the US District Court (District of New Jersey) and the US Court of Appeals (Third Circuit) - to which appeals from the US District Court (District of New Jersey) lie - and to the decision of Hogan A-DCJ at first instance in the present case. Having recorded the views expressed by Hogan A-DCJ, Wood CJ at CL wrote: "130. The present case involves somewhat different considerations, so far as the plaintiff alleges an active inducement and deliberate conduct, on the part of the casino, designed to take advantage of his personal failings. Moreover, the regulatory framework, which can also be taken into account in determining a claim brought pursuant to a tortious count ( Chordas at 102) is not the same for a casino as it is for a registered club. Without expressing any view as to the correctness of the decision in Reynolds , I am not persuaded that the matters identified by his Honour are sufficient to exclude the existence of a duty of care in the context of the present case. 131. The precise limits of the duty of care owed in the present case, and of any breach, are likely to depend upon the facts proved - most particularly upon the extent to which the defendant had knowledge of any propensity on the part of the plaintiff to be a problem gambler, and upon the extent to which it sought to take advantage of him. Additionally, it is likely that there would be a reference to matters such as industry practice, economic consequence, practicability and a variety of social and policy factors. Although it may well be that the duty of care would be confined to problem gamblers, and not one owed to gamblers at large, that does not affect this case, since it is the circumstance of the plaintiff being a problem gambler and one who was susceptible to alcohol, that is at the heart of his action. 132. It is certainly arguable that any duty of care in this context would not go so far as to require the warning off or the declining of the business of high rollers or gamblers who regularly lose, or denying to them facilities available to gamblers at large, including those permitted under the legislation and regulations. It may also not go so far as preventing the offer of a limited or reasonable range of inducements and complimentary services. At a minimum, however, I am of the view that it is strongly arguable that it would extend to a prohibition on the provision of further liquor to a problem gambler, who is seen to be intoxicated, or to be behaving in a manner that is obviously totally rash, as well as to the 'spiking' or 'switching' of his drinks. Equally arguable, in my view, is its extension to the provision of significant credit facilities or excessive encouragement through incentives, of a person who has specifically asked to be barred or to go beyond a limit that he has asked the casino to set. 133. So restricted, this would not prevent casinos from dealing with high rollers, or even with gamblers who are known to have a strong gambling habit, so long as those dealings are fair and so long as those gamblers are not unduly or improperly pressured or encouraged into gambling in a way that is obviously reckless and potentially destructive of themselves and their families. I do not decide at this stage that the duty of care will necessarily be formulated in these terms. I hold only that such a case is well arguable, and cannot be dismissed as untenable." 110 When he came to deal with the claims based upon undue influence/unjust enrichment and unconscionable conduct which the then plaintiff sought to raise, Wood CJ at CL wrote (inter alia): "180. Similarly to the plaintiff's claim in tort, the various bases upon which restitutionary relief is sought, fall into an area of law which can still be said to be evolving, although not necessarily to the same extent. There is a degree of overlap and also a need for the plaintiff to establish the fact of any unconscionable abuse by the defendant of its position. Most likely this will turn upon the extent of its knowledge concerning the plaintiff's vulnerability (if established) and upon whether it did deliberately encourage him to become intoxicated, or to continue gambling while in that state. 181. I am not persuaded that his claim formulated in the various ways identified, can be said to be untenable …" 111 Although in American Express International v. Famularo, Naughton DCJ was concerned to deal (inter alia) with a Cross-Claim brought by a patron of an hotel for a refund of or compensation for moneys lost by the patron gambling in the hotel premises, and although, in the course of his Judgment, Naughton DCJ referred to the Judgment of Hogan A-DCJ at first instance in the present case, in the end his Honour founded his judgment for the patron, not upon the basis that the hotel had negligently failed to protect the patron from economic loss or upon the basis of unconscionable dealing on the part of the hotel, but upon the bases, first, that the hotel had been guilty of misleading or deceptive conduct (s. 52 Trade Practices Act 1974 (Cth)) and, second, that, in his Honour's view, the conduct of the hotel had involved breaches of the Liquor Act 1982. 112 At the relevant time there was located within the hotel premises a room called the "Las Vegas Lounge" in which room there were located gaming machines, a TAB agency, a bar and an EFTPOS machine, the purpose of the EFTPOS machine being so located being not only to encourage patrons to "withdraw" money from their bank accounts to enable them to make purchases at the hotel but also to enable them to "withdraw" moneys for the purpose of gambling in the Las Vegas Lounge. 113 At the time, the hotel was, as it had been for some years, affiliated with American Express International Inc as an establishment which would accept American Express cards, the terms of the arrangement being between the hotel and American Express International Inc being recorded in a "merchant" contract between them. One of the conditions of that "merchant" contract was that the hotel might not accept the card for purposes of supplying cash to a cardholder or for gambling purposes including gambling chips, credits and other services of any kind. 114 Although, when the "merchant" contract was first entered into, the hotel's American Express credit card facility was located upstairs in the overnight accommodation section of the hotel, at a later stage an additional facility was installed either in, or in the vicinity of, the Las Vegas Lounge, seemingly at the patron's request. Notwithstanding the provision in the "merchant" contract to which I have earlier referred, when the patron asked the hotel manager whether he might use his American Express card for the purpose of obtaining cash advances he was informed that he might do so - the American Express vouchers which he signed in respect of those advances, however, recorded that the charge involved was for "accommodation" a fact which, obviously enough, would not have alerted American Express International Inc to the breaches of the "merchant" contract. It was the fact that the patron was informed that he might use his American Express card for the purpose of obtaining cash advances which led Naughton DCJ to characterise the hotel's conduct as false and misleading and, in his Honour's view, entitled him, pursuant to the provisions of s.87 of the Trade Practices Act 1974 (Cth), to order that the hotel pay to the patron an amount equivalent to the amount which he had obtained by the use of his American Express card and had lost gambling in the hotel. 115 In categorising the hotel's conduct in making the cash payments to the patron as illegal, Naughton DCJ relied upon the provisions of s.20(4A) and s.67(7) of the Liquor Act 1982, the former of which provisions is in terms similar to those contained in s.9A(5A) of the Registered Clubs Act 1976 and the latter of which provisions provides that a licensee who fails to comply with a condition of the licence is guilty of an offence against the Act. Although, in the event, it matters not for the purposes of the present appeal, it seems to me that the payments made by the hotel to the patron would not have constituted cash advances to him and that, in any event, even if they had, that fact, while perhaps enabling the patron successfully to defend any action by the hotel seeking to recover those sums from him, would not have conferred on the patron a right to recover those sums from the hotel - see, to the like effect, the observations made by Wood CJ at CL in Preston v. Star City Pty. Limited when dealing with the case which the then plaintiff sought to found on what were alleged to have been the breach by the then defendant of the conditions of its casino licence imposed by the Casino Control Act 1992. 116 The three United States decisions to which Wood CJ at CL referred in Preston v. Star City Pty. Limited were GNOC Corporation v. Aboud (1989) 715F.Supp.644, a decision of the United States District Court for the District of New Jersey, Greate Bay Hotel & Casino v. Tose (1994) 34F.3d 1227, a decision of the United States Court of Appeals for the Third Circuit, and Hakimoglu v. Trump Taj Mahal Associates (1995) 70F.3d 291 also a decision of the United States Court of Appeals for the Third Circuit in each of which cases what was in issue was whether, under New Jersey law, a casino patron might recover from a casino for gambling losses caused by the casino's conduct in serving alcoholic beverages to the patron and allowing the patron to continue after, so it was alleged, it became obvious that the patron was intoxicated, the casino's conduct in each case being said to be negligent. 117 In GNOC Corporation v. Aboud, the then plaintiff sought to recover from the then defendant the balance of an account alleged to have been outstanding from his stay at its casino and the then defendant raised a counter-claim against the then plaintiff seeking compensatory damages for gambling losses suffered while at the casino. The casino then sought "partial summary judgment" with respect to so much of the counter-claim as sought to recover it respect of its alleged negligence. In the course of his judgment on that application, Cohen J wrote: "Our survey of the statutes, rules, principles and precedents which make up the law of the State of New Jersey indicates that the Golden Nugget owes a duty to act reasonably under the circumstances of this case. Such a conclusion is but a logical extension of well established doctrine and pre-existing law, although its application to the facts at bar is novel. Under the circumstances of this case, the Golden Nugget should reasonably have foreseen the type of harm sustained by Mr. Aboud. In a gambling parlour environment the risk that an obviously intoxicated and/or drugged patron might not appreciate the consequences or substantiality of his endeavours is great. The relevant inquiry is not, as the Golden Nugget suggests, whether a gambler knows that the odds of winning in a casino are against him/her, but rather, whether a gambler comprehends the consequences of continued, protracted gambling. There is nothing fundamentally unfair about imposing upon a casino the duty to prevent patrons such as Mr. Aboud from gambling while patently intoxicated, for they are in the best position to do so. Indeed, casinos are already under an obligation not to serve visibly intoxicated patrons pursuant to New Jersey's common law dram shop liability as well as the statutory framework and the administrative regulations which govern alcoholic beverage service in casinos. In sum, a casino has a duty to refrain from knowingly permitting an invitee to gamble where that patron is obviously and visibly intoxicated and/or under the influence of a narcotic substance." Accordingly, Cohen J dismissed the application. 118 The Judgment in Greate Bay Hotel & Casino v. Tose records (inter alia): "Leonard H. Tose claims to have lost over $3,000,000.00 while gambling from 1983 through 1987 at the Greate Bay Hotel & Casino (the 'Sands') in Atlantic City, New Jersey. In particular, while playing blackjack at the Sands on April 11 and April 26, 1986, Tose lost $1,000 in cash and $1,200,000 on credit. He later paid the Sands $65,000 of the $1,200,000 leaving a balance of $1,135,000 After negotiations, the Sands and Tose signed a settlement agreement providing for Tose to repay the $1,135,000 in two payments. Tose, however, did not make the first payment, so the Sands brought an action to enforce the settlement agreement. Tose counter-claimed, alleging that because the Sands knowingly allowed him to gamble while intoxicated, it must return his gambling losses. The District Court entered partial summary judgment for the Sands on the settlement agreement thereby obliging Tose to adhere to its terms. However, the court denied the Sands' motion to dismiss the counter-claim for want of subject matter jurisdiction. Thus, the counterclaim was tried to a jury which returned a verdict in the Sands' favour. Tose appeals from the District Court's denial of his post trial motions. The Sands cross-appeals from the District Court's denial of its motion to dismiss Tose's counterclaim for want of jurisdiction. We hold that the District Court correctly found that it had subject matter jurisdiction over Tose's counterclaim and that the District Court properly denied his post-trial motions. Accordingly, we will affirm the District Court's orders." 119 In a footnote to that part of its Judgment dealing with the Sands' cross-appeal, the Court of Appeals wrote: "The Sands contends that in light of Miller v. Zoby , 250N.J. Super. 568, 595 A.2d 1104, we should not recognise an Aboud cause of action. The current posture of this case obviates the need to determine whether Zoby casts doubts on the correctness of the Aboud court prediction that the New Jersey Supreme Court would recognise that a casino had a duty to a patron to refrain from permitting him to gamble when he is obviously an visibly intoxicated. Inasmuch as we are upholding the verdict against Tose, the Sands in this case is not injured by our choice not to address this issue. Furthermore we need not review the Aboud ruling pursuant to our obligation to consider the District Court's jurisdiction. ……… … while we do not make a ruling on the point a reasonable argument can be made that a casino owes a common law duty to a patron to prevent him from gambling when it knows he is intoxicated." 120 In Hakimoglu v. Trump Taj Mahal Associates the then plaintiff filed two separate actions in the United States District Court for the District of New Jersey against defendants associated with two Atlantic City casinos. Invoking the District Court's "diversity jurisdiction" his complaints alleged that the defendants had "intentionally and maliciously enticed him" to gamble at the casinos on numerous occasions by providing him with free alcohol beverages and other amenities; that while he gambled he was served free alcoholic beverages until he became intoxicated; that after he became "visibly and obviously intoxicated" the defendants "invited and permitted him to continue to gamble in that condition" for lengthy periods; and that he consequently incurred "substantial gambling losses". Asserting claims for negligence, intentional and malicious conduct and unjust enrichment, he sought to recover compensatory and punitive damages as well as other relief. 121 In both cases, the District Court dismissed the plaintiff's claims for failure to state a claim on which relief could be granted. The then plaintiff appealed. The actions having been brought in the "diversity jurisdiction" of the District Court the law to be applied was the law of New Jersey and, in the absence of a binding decision from one or other of the appellate courts of New Jersey, the District Court, and, on appeal, the Circuit Court of Appeals, was required to predict whether the Supreme Court of New Jersey would recognise claims such as those advanced by the then plaintiff. 122 In the course of their Judgment, the majority of the Circuit Court of Appeals wrote: "Our task in this appeal is to predict whether the Supreme Court of New Jersey would recognise claims such as those asserted by the plaintiff. Unfortunately, we must make this prediction without specific guidance from the New Jersey appellate courts, for neither the Supreme Court of New Jersey nor the Appellate Division has addressed the question that is now before us or any closely related question. If New Jersey law, like that of some other States, permitted us to certify the question at issue to the Supreme Court of New Jersey, we would seek to do so here, because the question is both difficult and important. New Jersey law, however, does not allow such certification, and therefore we are relegated to predicting what the Supreme Court of New Jersey would do if it were confronted with this question. While we are required to venture this prediction and while we recognise the issue a published opinion for the guidance of the district courts in the circuit, we understand that our decision here is unlikely to have - and should not have - lasting precedential significance. We expect that claims such as those advanced by the plaintiff in this case will work their way up through the New Jersey court system and that the New Jersey appellate courts will provide a definitive answer to the question before us. For this reason and because most of the chief arguments on both sides of this question have already been set out in excellent published district court opinions, we do not find it necessary to engage in a lengthy discussion here. The opinion in GNOC v. Aboud 715 F.Supp.644 (D.N.J. 1993) argues forcefully that the New Jersey Supreme Court would recognise claims like those in this case. By contrast, the published opinion of the district court in one of the cases now before us and the opinion in Tose v. Greate Bay Hotel & Casino 819 F.Supp. 1312, 1317 (D.N.J. 1993) aff'd 34F.3d 1227 (3d Cir. 1994) persuasively set out the opposite case. ……… Although it is not clear the New Jersey Supreme Court would rule on this question - as the conflicting district court opinions illustrate - it seems to us more likely that the New Jersey Supreme Court would not recognise claims such as those that the plaintiff asserted. In reaching this conclusion, we find it significant that, except in cases involving minors, the New Jersey courts have not extended the 'liability of servers of alcoholic beverages beyond injuries related to drunken driving, bar room accidents and bar room brawls' Hakimoglu 876 F. Supp. at 632." 123 In addition to the three United States cases to which I have just referred, there appear to have been a number of other cases in the United States in which compulsive gamblers - not relying on their having been provided with alcohol - have sought to recover from casinos losses which were suffered while gambling or have sought to defend claims brought against them by casinos. Some of these cases are the subject of an article by one Joy Wolfe: "Casinos and the Compulsive Gambler: Is There a Duty to Monitor the Gambler's Wages?" appearing in Vol. 64 of the Mississippi Law Journal at p. 687 the burden of which article is to the effect that the courts which have discussed cases favour casinos by holding that the gambler cannot recover under tort law due to the absence of a duty on the part of the casino to recognise a compulsive gambler and thereafter monitor his bidding activity. Further articles - dealing with the question of the intoxicated gambler - can be found in 85 North Western University Law Review (Jeffrey C. Hallam: "Rolling the Dice: Should Intoxicated Gamblers Recover Their Losses?") and 41 Villanova Law Review (Jessica L. Krentzman: "Gambling While Intoxicated: The Winner Takes All? The Third Circuit Examines Casino's Liability for Allowing a Patron to Gamble While Intoxicated"), the latter article dealing with the decision of the Court of Appeals for the Third Circuit in Hakimoglu v. Trump Taj Mahal Associates. 124 What, then, is one to make of all this? 125 The analysis which I have made of the Judgments in the High Court in Perre v. Apand Pty. Limited leads me to conclude that, in the present case, the Club owed no duty of care to protect Mr. Reynolds against financial loss due to gambling. 126 The activities of the Club, including the making available of facilities for gambling,were legitimate activities permitted pursuant to the provisions of the Registered Clubs Act 1976, and the cashing of cheques did not, in my view, involve a breach by the Club of the provisions of s.9A(5A) of the Registered Clubs Act, for that, in my opinion, would not constitute a cash advance or the giving of credit - in this regard it is not without point to note that although s.74 of the Casino Control Act 1992 prohibits a casino operator from (inter alia) lending money or extending any other form of credit, s.75 of the Act permits a casino operator to issue to a patron chip purchase vouchers in exchange for a cheque payable to the operator. 127 Further, it does not seem to me that Mr. Reynolds was "vulnerable" in the sense contemplated by the various judgments in the High Court in Perre v. Apand. At the beginning of 1992, Mr. Reynolds was an adult, 27 years of age and a man who, as I have earlier recorded had been accustomed to gamble recreationally over a period of the better part of 8 years. Further, after the end of 1993, as I have earlier recorded, Mr. Reynolds ceased to patronise the Club and stopped gambling. These facts would indicate that Mr. Reynolds was at all times able to appreciate the risks involved in gambling and that he had a capacity not to gamble excessively and even to refrain from gambling at all. 128 Although much was sought to be made of cheques having been drawn by Mr. Reynolds on his personal account and on the business account "bouncing", it should be noted that the records which were tendered on the hearing before Hogan DCJ do not disclose any cheques drawn by Mr. Reynolds on his personal account having been dishonoured prior to the two cheques each for $1,000.00 drawn in favour of and cashed by the Club and deposited to the credit of its account with its bank on 29 November 1993 and dishonoured on 1 December 1993. Further, it is to be noted that those records disclose only two cheques drawn by Mr. Reynolds on the business account in favour of the Club and cashed by the Club in the period covered by payment schedule having been dishonoured, they being the cheque for $1,000.00 first presented on 18 May 1992, dishonoured on 20 May 1992 and ultimately paid on 27 May 1992 and the cheque for $2,000.00 first presented on 22 June 1992, dishonoured on 23 June 1992 and ultimately paid on 3 July 1992. 129 Save only that the Club could have refrained from cashing cheques for Mr. Reynolds or could have placed a limit on the amount for which on any day or during any period cheques could have been cashed for Mr. Reynolds, there does not appear to have been anything which the Club could have done, either, to prevent Mr. Reynolds using the gambling facilities in the Club or to limit his use of those facilities - the fact which in the course of his oral submissions (T. 3) Mr. Temby conceded. 130 Further, it is to be recalled that it was Mr. Reynolds, himself, who approached Mr. Gianisis for the purpose of ascertaining whether he might have his cheques cashed rather than that it was Mr. Gianisis who induced or invited Mr. Reynolds to have his cheques cashed by the Club. 131 Those matters also lead me to conclude that Mr. Reynolds failed to make out a case of unconscionable conduct on the part of the Club. 132 For these reasons I propose the following orders: 1. ORDER the appeal be dismissed. 2. ORDER that the Appellant pay the Respondent's costs of the appeal. 133 GILES JA: I have had the advantage of reading the reasons of Powell JA in draft. His Honour's account of the facts and the course of the proceedings below, and his discussion of the law, enable me to state succinctly why I agree that the appeal should be dismissed. Negligence 134 The appellant claimed compensation for economic loss, not for physical harm. The economic loss alleged was part of his losses from gambling at the respondent's club. The appellant's case on appeal was that the respondent should have advised him to resign his membership of the club, should have warned him that it was imprudent to gamble at the club, and should have declined to cash cheques for the appellant or placed a limit on the amount for which on any day or during any period cheques could be cashed for him. It is necessary that the respondent owed to the appellant a duty of care sustaining recovery of compensation for the economic loss alleged caused by failure so to act towards the appellant. 135 A duty of care not to cause economic loss will not be held to exist simply because economic loss to the plaintiff is foreseeable in the event that the defendant acts or fails to act in a particular way. It is sufficient to refer to Perre v Apand Pty Ltd (1999) 198 CLR 180 at [4] (Gleeson CJ), [27] (Gaudron J), [70-73] (McHugh J) and [329] (Hayne J); that proposition underlies the reasons of the other members of the Court. Let it be accepted that in the present case it was foreseeable that, if the respondent did not advise the appellant to resign, did not warn him of imprudence, and cashed cheques for the appellant or did not limit the cashing of cheques, the appellant might (not would) lose money gambling at the respondent's club or lose more money gambling at the respondent's club than he otherwise would have done. That is insufficient for a duty of care sustaining the compensation claimed. Are there other circumstances from which a duty of care of the requisite content should be held to have been owed? And, are there other circumstances from which a duty of care of the requisite content should be held not to have been owed? 136 Two related matters will be evident from these questions. One, indicated by the word "should" in both questions, is that in the absence of established recognition of a duty of care sufficient to sustain recovery of compensation for the loss in question, whether a duty of care is recognised is to a considerable extent judgmental. The reasons of the members of the Court in Perre v Apand Pty Ltd discuss a number of considerations in the judgmental exercise. It may be informed by considerations such as incremental development from established categories (eg at [94-99] (McHugh J)); a weighing of policy factors (eg at [5]-[6] (Gleeson CJ), [31]–[33] (Gaudron J), [100]–[132] (McHugh J), [259]-[273] (Kirby J)); what is fair, just and reasonable ([259] (Kirby J)); or the economic organisation of society (at [335], [345]-[350] (Hayne J)). The exercise may require the identification in the particular case of "salient features" thought sufficient to give rise to a duty of care (eg at [200] (Gummow J), with whose conclusion Gleeson CJ agreed at [12]; see also Callinan J at [406]). The other, indicated by asking the second question as well as the first, is that in the judgmental exercise it is important to pay regard to circumstances telling against the duty of care as well as circumstances in its favour. 137 The present case does not fall within a duty of care already recognised with the requisite content. The United States cases and articles to which Powell JA refers are generally concerned with intoxicated gamblers, and so far as they recognise a duty to refrain from permitting an intoxicated patron to gamble are matched by contrary cases and provided doubtful assistance in the present case. The cases discussed by Wolfe tend against a duty of care, but do not reflect an established position. Preston v Star City (1999) NSWSC 1273 well demonstrates that the law is still developing in this area, and is itself complicated by issues of intoxication and active inducement calculated to take advantage of the plaintiff's failings. 138 So it is necessary to engage in the judgmental exercise. The differing reasons in Perre v Apand Pty Ltd make the guidance to be obtained from that case, the most recent detailed consideration in this area, less than definitive. 139 The appellant submitted that a duty of care should be held to have been owed because the appellant belonged to a readily ascertainable class; the appellant "was an especially vulnerable individual"; and the respondent "had control of the situation". He described this as the "salient features approach" to be found in Perre v Apand Pty Ltd, and said that the three features had been taken up on the facts in that case by Gummow J (at [206], [216]) and, although as elements of different reasoning, had been seen as of significance by other members of the Court (at [38], [41]-[42], by Gaudron J; [50], [106]-[113], [118]-[129] by McHugh J; [298] by Kirby J; [408], [416] by Callinan J). He submitted that the "incremental approach" lacked relevant established categories and that the "three stage approach" favoured by Kirby J did not command majority support and should not be adopted. 140 It may be that the appellant belonged to a readily ascertainable class, sufficiently so to put to rest the spectre of liability to persons who can not readily be identified. There is room for argument over the boundaries of the class, and postulation of a duty of care owed by financiers generally to persons other than gamblers whose control over the exercise of their rights to spend their money as they please is compromised suggests the need to think beyond clubs and gamblers. Further, if the class be defined by the criterion of a problem gambler, the ready identification is questionable. The spectre is, however, a circumstance telling against a duty of care. Putting the spectre to rest does not of itself provide a circumstance in favour of the duty of care. I am content to accept that the appellant belonged to a readily ascertainable class. Not so the other features. 141 Vulnerability and control are related, and are important in determining whether a duty of care is recognised, for their absence as well as for their presence. If a defendant has no control or but remote control over the conduct of or affecting the defendant, a duty of care as regards that conduct can hardly be imposed on the defendant: see Agar v Hyde (2000) 201 CLR 552 at [16], [81]. Where a plaintiff wishes to conduct himself in a particular way, even one involving possible harm, the importance attached to individual autonomy restrains imposition of a duty of care requiring that he be prevented or hindered from so conducting himself (see Perre v Apand Pty Ltd at [14], Agar v Hyde at [15], [89]-[90]). Vulnerability connotes that the plaintiff is unable to look after his own interests and is open to the control of the defendant (for example, Perre v Apand Pty Ltd at [118]-[119] (McHugh J) and [216] (Gummow J)) McHugh J said (at [118]) – "Cases where a plaintiff will fail to establish a duty of care in cases of pure economic loss are not limited to cases where imposing a duty of care would expose the defendant to indeterminate liability or interfere with its legitimate acts of trade. In many cases, there will be no sound reason for imposing a duty on the defendant to protect the plaintiff from economic loss where it was reasonably open to the plaintiff to take steps to protect itself. The vulnerability of the plaintiff to harm from the defendant's conduct is therefore ordinarily a prerequisite to imposing a duty. If the plaintiff has taken, or could have taken steps to protect itself from the defendant's conduct and was not induced by the defendant's conduct from taking such steps, there is no reason why the law should step in and impose a duty on the defendant to protect the plaintiff from the risk of pure economic loss." 142 Gambling, and cashing cheques for a person knowing that the person is to use the cash to gamble, are not of themselves disadvantageous to that person. We all spend money in ways which some would not find sensible, receiving in return goods or services or simply gratification thought to equate the expenditure. The person may be wealthy and untroubled by gambling losses, and even if not wealthy is entitled to choose to spend his money in gambling rather than on other avenues of gratification and to enter into debt so that he can do so. It would be an excessive interference with the gambler's individual autonomy and an excessive burden on the club to require, under pain of liability in damages, that the latter advise the former against gambling or deny to the former the facility of cashing cheques. 143 It must be appreciated, then, that a duty of care of the nature for which the appellant contended is not a duty to take care to protect another's rights, as the duty of care in Perre v Apand Pty Ltd was a duty to take care to protect the rights of the potato farmers to earn their livings. It is a duty to harm the gambler's rights, his rights to gamble at the club and to spend his money in gambling rather than on other avenues of gratification and, if he chooses, to enter into debt so that he can do so. It is a duty to infringe his individual autonomy. And it would be impractical to impose the duty of care. The club is unlikely to know, or to be able to find out, the gambler's financial position and priorities in expenditure, in order to decide whether to advise against gambling or that the facility of cashing cheques should be denied to the gambler. The gambler is under no obligation to follow the advice, and even if the club denies to the gambler the facility of cashing cheques there will be many other ways in which the gambler can obtain funds for gambling. That is illustrated in the present case. The appellant said that his total losses were of the order of $250,000. He claimed the amount of the cheques cashed with the respondent. He must have gambled with much money obtained elsewhere. And if he chooses, the gambler can go somewhere else to gamble. 144 These matters are such, in my view, that in ordinary circumstances there will be no duty of care owed by a club to a gambler to advise him against gambling, to decline to cash cheques or to limit the cashing of cheques. Does it make a difference when the club is told by the gambler that he (the gambler) is "a problem gambler" and is asked not to cash cheques? I will assume in favour of the appellant that this conveys that the gambler is losing money he can not afford to lose and is going into debt. 145 The practicality of the duty is enhanced, in that the club has some knowledge of the gambler's financial position and (at least at the time of the telling) his priorities in expenditure, although the absence of any obligation to follow the advice and the gambler's ability to obtain funds for gambling in many other ways and gamble elsewhere remain. But the duty of care is still a duty to harm the gambler's rights. In later gambling and asking that cheques be cashed the gambler is exercising his rights, including what can properly be regarded as a right to revoke his earlier request not to cash cheques. 146 What is added is first, that to the knowledge of the club cashing cheques is (at least at the time of telling) thought by the gambler to be disadvantageous to him and is likely to be disadvantageous to him, although loss to the gambler is not certain and any loss may well be suffered even if the advice is given and cashing cheques is declined; and secondly, that to the extent indicated by the description of a problem gambler and the request not to cash cheques followed by asking for cheques to be cashed, the gambler's own control over the exercise of his rights is compromised. 147 The appellant characterised this as vulnerability, appealing to the reasons in Perre v Apand Pty Ltd while accepting that the vulnerability was of a different kind from the vulnerability in that case. The potato farmers were vulnerable because they did not know about the bacterial wilt in the seed potatoes, could not do anything to prevent the introduction of the disease or otherwise protect themselves from loss because of its introduction, but would suffer loss if the disease were introduced, whereas the supplier of the seed potatoes knew of the risk of the disease and could have not supplied the seed potatoes. The gambler is not vulnerable in this way. He knows gambling brings losses. He knows of his gambling problem and, as later noted, can do something to prevent his gambling. Further, if the club gives the advice or declines to cash cheques, that will not mean that the gambler will not gamble. The appellant's reliance on vulnerability is much weaker than the reliance in Perre v Apand Pty Ltd. 148 The gambler's vulnerability comes from the extent to which his control over the exercise of his rights is compromised. The club has the indication that the gambler's control over the exercise of his rights, that is, his ability to prevent his gambling and suffering loss, is compromised. That directs attention to the nature of the gambler's condition and whether recognition of a duty of care is an appropriate response to the condition. 149 The condition is ordinarily neither permanent nor constant in its effects. The evidence of a consultant psychiatrist spoke of a gambling problem in terms of difficulty stopping gambling, but did not suggest total absence of control or inability to regain control. As the course of the appellant's gambling shows, at some time a gambler can with assistance or by his own will cease to be a problem gambler, and when a problem gambler there is a range from relatively harmless, albeit undesirable, indulgence, to harmful over indulgence. The law pays regard to physical and mental disabilities, and for example to impulsiveness and less than rational conduct of the very young, in fashioning duties of care, but the gambler's disability is of a different character. Control ultimately rests with the gambler, and society encourages the problem gambler to regain control. In the present case, with the benefit of the evidence of the consultant psychiatrist the trial judge did not accept that the appellant "did not have a free will to exercise", and the appellant's counsel expressly said that the case was not put as one in which the appellant "had lost a capacity to make choices for himself" or "had been deprived of all choice of action in every respect". 150 That highlights the continued impracticality of a duty of care sustaining recovery of the compensation claimed by the appellant. Even with knowledge of problem gambling, how is the club to know, when asked to cash a cheque, whether the anticipated gambling is the unwanted but compulsive craving of a problem gambler or the choice of a sometime problem gambler then in control of his indulgence? How is the club to know what the gambler can really afford? Must the club inquire, and what if the club is told that it is none of its business? 151 Going a little further, if a known problem gambler asks a financier for funds ostensibly to buy a car, must the financier interrogate the gambler or otherwise satisfy itself as to the purpose, or must it refuse the gambler in any event because that addition to the gambler's funds will free up an equivalent amount for gambling? Outside the context of gambling, if a known rake and spendthrift asks his club to cash a cheque, must the club satisfy itself that the expenditure will be for his benefit, or refuse to cash the cheque because his control over the exercise of his rights to obtain gratification from wine, women and song is compromised? Even when there is knowledge of the gambler's vulnerability as earlier noted, the questions (and similar questions can be asked) suggest that the law should not impose on persons with whom the gambler deals the burden of these inquiries and the decisions which then must be made. It is not the place of the law of negligence to oblige persons with whom the problem gambler deals to provide society's encouragement to regain control, and compensating the gambler for his losses will be counter-productive to that outcome. 152 In my opinion these are sound reasons telling against a duty of care sustaining recovery of the appellant's economic loss. In the circumstances of the present case, my judgment is that a duty of care of the requisite content should be held not to have been owed. Unconscionability 153 The appellant's argument was that he suffered from a special disadvantage, problem gambling, of which the respondent took unconscientious advantage. This, he said, entitled him to relief in equity. Whether and how that relief should be by an order for payment of compensation was left rather unclear, and it seemed to be put that the relief would be by requiring the respondent to disgorge the benefits it obtained from the series of contracts coming into existence when it cashed cheques and from permitting the appellant to gamble at the club. 154 The respondent did not obtain direct benefits from the series of contracts. It received a cheque for $100 in return for giving cash of $100. It may have obtained benefits from the consequential gambling and other gambling by the appellant, but the appellant's losses from gambling at the club were not obviously the measure of those benefits. It is unnecessary to explore either the nature of the equitable relief or how, if it could be by an order for payment of compensation, the compensation should be assessed. The matters to which I have referred in connection with negligence lead to the conclusion that the respondent did not take unconscientious advantage of the appellant. 155 I concur in the orders proposed by Powell JA. ******* DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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