Seke v Collins & Leahy Pty Ltd [1997] PGNC 103; N1605 (29 August 1997)

Unreported National Court Decisions

N1605

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

OS NO. 497 OF 1996
IPA SEKE - PLAINTIFF
V
COLLINS & LEAHY PTY LIMITED - DEFENDANT

Goroka

Sawong J
29 August 1997

GAMING AND WAGERING - Contract of chance - Sale of raffle tickets - Methods of draw not disclosed in ticket - Implied learn that first prize goes to holder of first drawn ticket - Breach of contract wherein first prize going to second ticket drawn.

CONTRACT - Implied terms - General principles - Contract silent on essential part - Fair term to be applied - Standard of reasonable man - Time for implication when contract made - Contract of chance silent as to method of draw - Implied term that first prize to first drawn ticket.

Held

(1) ҈& A term term of conf contract may be implied if the express terms of the contract are silent with regard to an essential matter, if it is a fair term which a reasonable person would think must be implied so as to make the agreement work.

(2) &ـ Where aere a rafflraffle or receipt was issued to a purchaser of goods from a shop for the conduct of a raffle, in the absence of any express term in the contract of “chance” arising from and at the time of issuing of a raffle ticket, there should be a implied term that the first ticket drawn should receive first prize.

(3) ټ In the the circumstances, where the procedures of the draw were made on the day of the draw by the organisers, a procedure was invalid and void.

(4) In the circumstaumssanceer where, following an announcement of procedure of the draw prior to the draw, the second ticket drawn in a raffle was given a first prize, there was a breach of the implirm ofcontr/p>

Cases Cses Cited

Kimbe International Primary School v Narpal [1987] PNGLR 442

Counsel

K Wagoro for the Plaintiff

AM Pryke for the Defendant

29 August 1997

SAWONG J: This was a trial in which the plaintiff sought the following declaratory orders:

(1) ټ That a at a Kijang Utility truck lucky draw drawn by the defendant on 26 October 1996, in favour of Yambi Seke not fair and not in line with thes of act ory to the lucky draw and as such, it wait was null and void.

(2)  &##16;& An order that PlainPlaintiff be declared the lucky draw winner.

Both parties have filed affidavit evidence in support of each other’s positio60; Bartiee also filed written submissions. #160; None None of t of the deponents have been cross examined. I have been able to read and consider carefully the whole of the evidence and the respective submissions that have been filed. There is really no te ashe facts.

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The Plaintiff says that on or about September 1996, he became aware oare of a lucky draw being conducted by thendant. The first prize was to bija Kijang Utility.

The significant and relevanlevant parts of his evidence is in paragraph 4, 6 and 7 of his affidavit. The essence of his evidence is that, he entered into a contract with the defendants. He boughtets worth K10 or 0 or more from the defendant and upon being given receipts, he wrote his name on those receipts and place in a rovided for that that purpose. derstood at that point in t in time that, the holder oder of the first receipt drawn would receive the first prize namely, the motor vehicle. It was not made kto him atim at that material point when the contract was entered the order of the draw nor was he told that the management of the defendant would announce the procedure or the order of the drathe day of the draw. 160; It wao not made knownknown to him at the material and relevant time that the holder of the first ticket drawn would receive the second prize and the holder of the second ticket drawn would receive the first prize. On the day of raw, a receireceipt bearing the plaintiff’s name was drawn first. Instead of him being awhe the first prize, that i motor vehicle, he was given the second prize. The holder of the sececeipeceipt drawndrawn receive the first prize.

He tore complains that the drawing of the tickets and the awardawarding of the prizes in the manner and order as done by the employees ofdefendant on the day of thef the draw was in breach of the implied term of the contract that he entered into with the defendant. He therefore says that as the defendant was in breach of the implied term of the contract, the draw should be declared null and void and he should be declared the winner as he was the holder of a receipt which was drawn first, and therefore ought to have receive the motor vehicle as the first prize.

It is not disputed that the Plaintiff went to the defendant’s shop and bought goods worth K10 or more and that he was given receipts which form the basis for a contract for the game of chances.

There is also no dispute that the draw was drawn on 26 October 1996. Immediately before taw wasw was made, the defendant’s senior employees, decided unilaterally the procedure for the draw. There is no dispute one ofne of Mr Seke’sipts was drawn first.

At this juncture, it is appropppropriate to note that the defendant has filed several affidavits, I do nnsider all of them to be relevant. I consider the evie evidence of Jack Andrew, Kevin McKernan and Greg Edmunds to be relevant.

Jack Andrew, Kevin McKernan, Greg Edmunds confirm that the defendant conducted a promotional lucky draw. The termshis wt out in posn posters ters and those were prominently displayed in the defendant’s shops. Essentially, the terms of affle was that it was open to any member of the public who bought goods from the defendant&dant’s shops to the value of K10 or The customer was required to write his name and address on the back of the receipt aipt and put the receipt in a box provided for that purpose. The first pris to be a Toya Toyota Kijang Utility.

On the day of the drawing, the representatives of the defendant (see affidavit of GJ Edmunds, Allen Fisher) decided unilaterally the procedures for the draws. It was decided thatfirst trst ticket drawn would receive a refrigerator and the second ticket drawn would receive the first prize, a Toyota Kijang ty Motor Vehicle.

This procedure was then publicly announced to the numbers of the pthe public who were present to witness the drawing of the receipts.

It was not express in terms of the agreement that the person whose name was on a receipt and which was drawn first would receive the first prize, nor was there any form or order of the drawn made known to the purchaser including the plaintiff at the time the receipts were issued.

Before going into the submissions that have been made, I think it is necessary to set out the law as I understand it, in relation to implied terms in contracts and its application to the present case. I think a usefulting pointpoint is a passage by King AJ, as he then was, in Kimbe International Primary School v Narpal [1987] PNGLR 442.

The facts of that case is quite similar to the facts of the present case. The facts of that ca fairlfairly short and is as follows.

The dispute in that case arose between the parties arose out of a lottery or raffleucted by the school. A permit td the raffle wase was granted by the Department of Wesf West New Britain to the school under the Gaming Act (Ch No. 270). Mr Nabought five tickets fets for K10 each and that when he paid the money and received the tickets, nothing was said about the way the prizes would be allocated or drawn. The printed tickets borenfo information about the way the prizes would be allocated. Thmit did not require the the draw to be conducted in any particular way. When the rafas drawn, f Naof Narpal’s tickets was the first one done drawn. He ot given or awarded thed the first prize, but was awarded o the other prizes. He took the schoothe DistrDistrict Court claiming, amongst other ther things a breach of an implied term of ontract. The Districttrict Court ruled in his favour. The school apd against thet the decision to the National Court. The Nationalt dismissed thed the appeal. Ki said at 444:

&#8p>“A term may be implied in a commercial or business con to mt conform with thth the usual custom of trade or business when the parties have not expresspressly agreed otherwise. But this was nousiness cons contract and that branch of the law cannot apply.”

The remaining way in which a term may be implied ifexpress terms of the agreement are silent as to an obviously essential matter is, if it is t is a fair term which a reasonable person would think must be implied so as to make the contract work. In deciding whether the term is to be implied, the court looks at the alleged term and asks: would a reasonable person, if called upon to consider whether this term should be implied, say 0;of course it should”.

The only significant fant fact of difference between the present case and that case, is that in the case referred to above, the raffle was conducted after a permit or approval had been given by the relevant authority. e present case, there is n is no evidence that such an authority or permit was given by the relevant government authority to conthe raffle, under the provisions of the Gaming Act (Ch No. 220). Neither counsel had had addressed this issue. Consequently, nothing furg further on this aspect.

Applying the principles which I have stated above, I ask myself, would a reaso persy that the parties were leaving the draw to be wobe worked out later or say, that the firstfirst ticket drawn was to be the winner. I am of the view that the first possibility cannot be regarded as reasonable because it involves delay and uncertainty.

However, if a reasonable person considered whether the term Mr Seke says is to be implied into the contract should be implied, I think that person would say “of course” or “of course, unless some other method was made clear to the ticket buyer.”

In my view, either of those two answers means that the way the draw was made and the prize attached thereto awarded was wrong, because obviously the raffle had to be drawn in some way and no special way was made clear when Mr Seke bought his tickets.

In their respective submission, both counsel have submitted that this case is one based on contract. I accept that as correct. The action whereby Mr Seke Seke paid for the goods, which entitled him to a receipt and which gave him the chance of winning a prize or prizes was a contract “of chances” or a wager of K10 or more against the prizes to be won if the receipts were drawn out.

Counsel for the Plaintiff has submitted that there was no express term of the contract as to who should get the first prize, or what the order of the draw would be. However, was a clear impl implication that the first prize would be the vehicle. He submitted that in tsencbsence of such an expressed term, the Court must look a intention of the parties. He submitt in the pree pree present case, the Plaintiff entered into the Contract on the basis that irst ticket drawn would be d be declared the winner of the motor vehicle.

He submits that in the facts of the present case, there being no express term of an essential term of the contract, the Court must infer that the intention of the parties was that the first ticket drawn would claim the first prize.

The Defendant has conceded that the order of draw was not an express term of the contract at the material time, that is at the time the contract was made. Counsel fe Defendant has chas cited a line of foreign authorities in support of his contention that custom has been recognised as a basis to imply terms into a contract,e an essential term of a contract is silent.

The Defe Defendant’s main argument as I understood was this. It was sted that the PlainPlaintiff contends that it is the custom in such competitions that the ticket drawn first does not necessarily the main prize and that as there was no express term as to order of the draw, and the priz prizes to be won, a term should be implied into the contract in accordance with that custom.

Mr Pryke contends that there is no evidence at all by the Plaintiff to support his claim or his contention that it is the custom of this type of competition that the first receipt or raffle drawn should receive the first prize. He submits that the evidence from the defendants witness establishes the contrary.

He argued that in this type of competition, the rules are always made by the organisers and as such it was open to the organiser ange or create new rules ases as the circumstances permit.

I consider this submission to be baseless. The reason is quitple.&#16. There was contract be the the Plaintiff and the Defendant. One of the essential ter t of the contract, nathe order of the draw and the prizes to be attached thereto was not stated nor agreed upon upon at the time the contract was made. Iot cor it necessary to coto consider customs because 160; in my view principlesiples are not applicable in the circumstances of; this case.

Mr Pryke has made other submissions which are essentially based on his his principal submission. I have cored tsubmissions ions and Iand I consider that his submissions are quite irrelevant and not applicable. The management of the dant, shortly before the draw was made, decided how the draw was to be made and in what orde order and what prizes was to be attached to.

I consider that the issue on which the case rests is whether the relevant term werm was to be implied into the contract when it was made, ie. when the ticket/receipt was bought or given. In my view, it is sufficihnt that the holder of the first ticket drawn was given the second prize, constitutes evidence of the breach of the implied term.

Mr Pryke has submitted the evidence of other witness, such as Gregory Edmunds, Aru, Arua Owen and others, that they had seen other raffle tickets drawn as this one was drawn, established that the method used by the Defendant was not unusual. Howein my view, that is iris irrelevant to the question of what the terms of contract were when made. If the defendant had made the method of drawing known attime of purchase, that would have been the end of the mattematter. Tas not the case here.

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In the present case, the act and the terms of the contract was made when the goods wods were bought and the receipt were given. That was the material anevant period. It was was not a termhe cthe contract either expressed or by implication that the defendant would create new terter the contract was entered into.

I find that in doing so, the Defendant was in bren breach of the terms of the contract. Coently, it must bear the the consequences of the breach by it.

For the reasons I have given, I make the following orders:

1. &#T60; that raw dade my they the Defendant on 26 Octobertober 1996 in favour of ـ < one Yambe be declared null null and void and awarding him the said motor vehicle, a Toyota Kijang Utility.

2.;ټ&##160;; I de tha Plaintiffs receipt being drawn first, he be d be declareclared thed the wine winner oner of thef the first prize, namely a Toyota Kijang Utility.

3. &##160;; I60; I orderorder that the defendant deliver up to the Plaintiff either the said Toyota Kijang Utility or a vehicle similar to it fourteen (14) days.

4. That the Defe dantthay iffntiff’s costs, such such costs are to be agreed, if not to be taxed.

Lawyers for the Plaintiff: Kot & Co

Lawyers for the Defendant: Pryke & Co