'No Deal': Kakavas loses High Court appeal

Yesterday, the High Court of Australia, in a unanimous joint judgment1, dismissed an appeal brought by 'high roller' Harry Kakavas who sought to recover over $20 million in losses from Crown Casino incurred whilst gambling at the casino in Melbourne.

Background

Kakavas is a property developer and a high roller well known to casinos both in Australia and overseas.

Kakavas alleged that Crown had provided him, a known problem gambler, with a number of inducements to gamble, including:

the use of a jet on about 30 occasions to fly to Melbourne; gifts of thousands of dollars on many occasions, including when Kakavas boarded the plane or arrived at the casino hotel; and the provision of lines of credit of up to $1.5 million. During the period June 2005 to August 2006, Kakavas wagered around $1.5 billion at Crown, in some cases betting upwards of $300,000 a hand.

Mr Kakavas commenced proceedings against Crown to recoup his losses. At first instance, he pleaded a number of causes of action, including negligence and unconscionable conduct under the relevant provisions of the then Trade Practices Act 1974 (Cth).

Crown applied to strike out the claim in its entirety. In an interlocutory decision2, Harper J ruled that claims of active and deliberate intervention by a casino operator in the knowledge and exploitation of a patron's vulnerability are not claims in negligence. Nonetheless, his Honour allowed the claim to proceed on the basis of unconscionable conduct.

Kakavas subsequently re-pleaded his claim on the basis of unconscionable conduct against Crown (and two Crown employees) but still did not succeed3. Harper J held, among other things that Kakavas did not suffer from a special disadvantage. Rather, Kakavas was able to negotiate very favourable terms for his visits to Crown, and was able to abstain from visiting the casino until his demands were met.

The Court of Appeal of the Victorian Supreme Court unanimously upheld the decision of the trial...