Allen v Fiji Rugby Union [2015] FJHC 877; HBC76.2012 (13 March 2015)

IN THE HIGH COURT OF FIJI AT SUVA
Civil Jurisdiction

Civil Action No. HBC 76 of 2012

Between:

Olaf Allen
Plaintiff

And:

Fiji Rugby Union
Defendant

Appearances: Mrs. Lateef with Mr K. Goundar for the plaintiff
Mr N.Lajendra for the defendant
Date of hearing: 12th and 13th March, 2015

JUDGMENT

1. Introduction
   
   1. The plaintiff claims a sum of $100,000 arising from his winnings at a lottery conducted by the defendant on 30th December,2010. The plaintiff purchased a $20 ticket and was declared the winner of the first prize. The defendant states that the draw was null and void and in breach of the Commerce Commission Decree,2010, since the price of the lottery ticket was reduced from $20 to $10and the butts of all lottery tickets purchased were not placed in the draw.
      
   2. This dispute has resulted in a quartet of legal proceedings, as I noted in my judgment on the summons filed in this case. The plaintiff made an application to intervene as a party in HBC 4 of 2011 filed by the Fiji Commerce Commission,(FCC) against the defendant. He was joined as an intervenor. But he did not file a claim, as directed by Court. Then, the plaintiff filed an action by way of originating summons in HBC 315 of 2011,against the defendant. That case was dismissed. Next, the plaintiff moved for summary judgment in this case. The Master declined the application.
      
2. The determination
   
   1. The primary facts are undisputed.
      
   2. The plaintiff was declared the winner of the first prize of the lottery conducted by the defendant on 30thDecember, 2010.
      
   100. The lottery was investigated by the FCC, inrespect of certain breaches of the Commerce Commission Decree, 2010.
        
   4. The FCC commenced action against the defendant for declaratory relief. There followed a deed of settlement, in terms of which the parties agreed:
      
      1. FRU shall refund all the tickets bought for $10.00 prior to the draw of the lottery.
         
      2. FRU shall redraw the lottery and ensure that all ticket butts of tickets bought at $20.00 are included in the redraw.
         
   5. The plaintiff, in examination in chief produced his winning ticket and two letters from the defendant. The first letter of 21st January, 2011, states that the lottery is being investigated by the FCC. The letter of 17thFebruary,2011, in response to his solicitors' letter provides that "Until and unless that case is resolved we(the defendant)will not be in a position to distribute any prize monies."
      
   6. The plaintiff said that the outcome of the investigations was that the FCC requested the defendant to refund $10 to those who purchased tickets at that price and have a re-draw with all the $20 tickets.
      
   7. He concluded his evidence in chief stating that it was stressful and embarrassing for him and his family that he was not paid the prize monies.
      
   8. PW2(Keni Dakuidreketi, CEO of the defendant) said that the plaintiff was entitled to the prize money as his ticket bore the drawn number. In cross-examination, he agreed that the gaming license granted to Viliame Gavoka, to organize a ticket lottery on behalf of the defendant was subject to the Gaming Decree, 2009 and any other law, as provided in the license.
      
   9. PW3(Daniel Whippy, Director of the defendant) in cross-examination said that the FCC advised that there had to be a re-draw. The defendant declared the first draw illegal, as tickets were sold below the prescribed price of $20.00 and all $20 ticket butts were not included in the draw. He said that the draw was not properly conducted, as stated in Schedule 1 of the deed of settlement. The licence was subject to the Gaming Decree.
      

In re-examination, PW3 said that he was told that the draw was illegal at an internal briefing.

10. It transpired in the cross-examination of PW4,(B Singh) that he had limited knowledge on this matter. He said that the second draw was valid.
    
11. PW5,(Bobby Maharaj, CEO of FCC) in evidence in chief said that on 31st December,2010, the day after the draw, the defendant received complaints from the Consumer Council and members of public on the manner the draw was conducted.
    

50. The FCC filed action against the defendant, as the defendant had breached sections 75, 76, 77, 83 and 85 of the Commerce Commission Decree. The defendant made representations that it wishes to settle out of court.
    

13. In cross-examination, PW5 said that their investigations disclosed that a number of tickets that went into draw were sold at a discounted price of $15 and $10,( below the published price of $20) and the butts of some $ 20 tickets sold were not placed in the barrel for the draw.
    
14. PW5 said that the settlement between the FCC and the defendant provided that all butts of tickets bought at $ 20 were to be included in are-draw, in order that all legitimate buyers were given an opportunity to participate in the draw and the defendant was instructed to refund all tickets sold at $10 and $15 tickets, since these tickets were not sold at the authorized price. It was unfair to the persons who bought tickets at $ 20 to compete with those who bought at $10.
    
15. Mr Lajendra, counsel for the defendant asked PW5 whether the plaintiff was the legitimate winner. His response was that since the initial draw was not done correctly, the decision made in that draw was "not correct".
    
16. In re-examination, PW5 confirmed that the first draw was not conducted properly. The defendant was not punished, as they agreed to do the right thing. The plaintiff hence saw it fitting not to proceed with the charges. It was fair to have a re-draw 2 years later.
    
17. DW1,(Ms Luisa O'Connor, Operations Administrator of the defendant) stated that the ticket prices were reduced to $15 and $20 to boost sales. The butts of all $20 tickets were not included in the draw, as the ticket books were not sent back to Suva in time for the draw. DW1 confirmed the action taken by the FCC, as stated by PW5. DW1 was cross-examined on the action taken by the FCC and the legality of the redraw.
    
18. The case for the plaintiff as stated in the closing submissions filed on his behalf is that the lottery ticket is a unilateral contract and a legally binding duty has arisen from that contract. The alleged defect was with the lottery and not the contract. It is further submitted that the lottery ticket the plaintiff purchased was not invalid or void, since the license does not prevent the ticket prices to be reduced. The contract is voidable, and the plaintiff does not choose to invalidate the contract. Finally, it is submitted that the first draw was not declared illegal.
    
19. The defendant contends that the FCC found that the lottery was not conducted in accordance with the Commerce Commission Decree and the Gaming Decree, since on the date of the draw, the defendant had reduced the price of tickets from $20.00 to $15.00 and $10.00 in order to increase its sale of tickets and all ticket butts had not been included in the draw. The FCC instituted action against the defendant for breach of the provisions of the Commerce Commission Decree.
    
20. It emerged that the defendant had obtained a Gaming License to conduct a ticket lottery. The defendant produced the license. The license was granted to Viliame Gavoka, to organize the lottery. The license was subject to the Gaming Decree,2009 and any other law, as provided in the relevant license. It was also provided as a special condition that the license "shall be governed by and construed exclusively under the laws of Fiji".
    
21. In HBC 4 of 2011,I held that sections 75, 76 and 77 of the Commerce Commission Decree are far reaching, the conduct of a lottery falls within the ambit of these provisions and empowers the FCC to give direction to the defendant.
    

5. In my view, the breach of the Commerce Commission Decree nullified the draw.
   

23. I hold that the lottery was not conducted, in accordance with law. It follows that the draw was illegal and void. It is a fundamental principle of the law of contract that no rights can flow from an illegal transaction.
    

10. The contractual obligation relating to the lottery ticket relied on by the plaintiff was founded on the basis that the draw was conducted in accordance with the law.
    

25. The closing submissions refer to several decision on unilateral contracts, including the case of Carlill v Carbolic Smokeball. Reference was made to the case of Kuzmanovski v New South Wales Lotteries Corp, (2010) FJCA 876 which held that a purchaser of a lottery ticket had "a contractual right to require Lotteries..to pay any prize to which he was entitled".
    
26. That case is clearly distinguishable from the present case. The lottery in that case was not found to be conducted contrary to law.
    
27. I find illogical and unconvincing the arguments put forward on behalf of the plaintiff and the attempts to distinguish between the lottery and the contract arising from the purchase of the lottery ticket.
    
28. Mr Lateef, counsel for the plaintiff in his closing submissions argues that the reduction of the price of a ticket was not in contravention of the license.
    

0. The short answer to that contention is that the reduction was in contravention of the Commerce Commission Decree,2010.It was "unconscionable" and unfair to persons who bought tickets at $ 20 to compete with those who bought tickets at $10.
   

30. The plaintiff's closing submissions deals with the validity of the re-draw. That does not arise for consideration in these proceedings.
    

3. Orders
   
   • (a) The plaintiff's action is declined.
     
   • (b) The plaintiff shall pay the defendant costs summarily assessed in a sum of $ 2500.
     

5thOctober 2015

A.L.B.Brito-Mutunayagam
Judge