Can A Compulsive Gambler Say He Was Victimised By The Casino, Making Enforcement Of His Debt Unconscionable?

Over the course of 14 months, Harry Kakavas lost AUS$20.5 million at the baccarat table of a casino operated by Crown Melbourne Ltd. Kakavas contended that he was a known problem gambler and that Crown had incited him to play deeply through various incentives such as rebates on losses and offers to fly on the casino's private jet. Because Crown had exploited his pathological urge to gamble, Kakavas contended, it would be unconscionable to enforce its claim for the $20.5 million that he owed. A further 'special disadvantage' which the casino was alleged to have exploited was the fact that Kakavas was subject to an Australian interstate exclusion order (IEO), which required Crown to pay any of his winnings to the government of the State of Victoria; had he known the effect of the order, he argued, he would never have gambled at all.

The case made its way to the High Court of Australia, which identified the basis of the claim as 'a species of equitable fraud', where one party is alleged to have taken 'surreptitious advantage of the weakness or necessity of another': Kakavas v Crown Melbourne Ltd, [2013] HCA 25. Such cases require scrutiny of the precise relationship of the parties and all the facts in order for the court to make equitable intervention. This will not occur merely because one party has suffered loss, hardship or even unfairness, or has made an improvident transaction: the plaintiff needs to show that the defendant's conduct warrants the court's action. Kakavas's claim that Crown had preyed on his personality flaws to entice him to gamble failed at trial; the Victoria appellate court agreed.

On further appeal, Kakavas's focus shifted to 'Crown's acceptance of...