Federal Court Upholds Customer Authorisation for Casino to Appropriate Funds

OUTCOME: Dismissed

FEDERAL COURT OF AUSTRALIA

[NAME_1] v [COMPANY_2]

[2003] FCA 507 GAMING – whether authority by customer to [NAME_3] to appropriate funds [NAME_1] v [COMPANY_2] N 1252 OF 2001 GYLES J SYDNEY 23 MAY 2003

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 1252 OF 2001

BETWEEN: [NAME_1]

APPLICANT

AND: [COMPANY_2]

RESPONDENT

JUDGE: GYLES J

DATE OF ORDER: 23 MAY 2003

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: The matter be stood over for the parties to bring in short minutes to give effect to these reasons and for argument as to costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 1252 OF 2001

BETWEEN: [NAME_1]

APPLICANT

AND: [COMPANY_2]

RESPONDENT

JUDGE: GYLES J

DATE: 23 MAY 2003

PLACE: SYDNEY

REASONS FOR

JUDGMENT 1 This is a rather unusual (and somewhat troubling) case concerning the dealings between the applicant, Mr [NAME_1], known as [NAME_1], who is a businessman from Shanghai in the [NAME_4], and the respondent, [COMPANY_3] ("Crown"), which conducts the [NAME_3] ("the [NAME_3]") in Melbourne. The critical issue is whether or not, after a visit to the [NAME_3] in early October 2000, [NAME_1] owed Crown a substantial sum of money and, if so, on what terms. He claims that he did not. If he is correct, he claims relief in relation to the accounts between the parties and also claims damages for defamation arising out of Crown notifying [NAME_1] as a defaulter to a credit reference agency used by casinos throughout the world. If he is wrong, the claim for relief in relation to accounts fails, Crown's cross-claim for the monies owed succeeds, and, subject to one argument as to the terms of the indebtedness, the claim of defamation fails. 2 Resolution of the critical issue depends upon what occurred between [NAME_1] employees at the [NAME_3] on 4 October 2000. The accounts given are quite inconsistent and cannot be reconciled. I have concluded that the evidence of the Crown employees should be preferred. It is necessary to analyse the background and the dealings between the parties in some detail in order to explain why I have so concluded. 3 [NAME_1] was born on [DATE] in Shanghai, China. He was a teacher from about 1967 to 1974 and thereafter operated a fruit transport business. In about 1980 he migrated to Australia and established a grocery delivery business, then a garment business in Sydney. He became an Australian citizen in 1983. In about 1989 he returned to Shanghai and has been ordinarily resident in that city since then. He has retained a residential property at Maroubra in Sydney. 4 After his return to Shanghai, [NAME_1] became involved in property development through [COMPANY_5] ("[NAME_5]"), of which he is chairman and principal shareholder. [NAME_5] and its subsidiary and associated companies ("the [COMPANY_6]") carry on a substantial business in Shanghai, Beijing and Hong Kong. He claims to be a well-known and prominent member of the Shanghai business community, and there is no reason to doubt this claim. I accept that the [COMPANY_6] is one of the largest property developers in China. Whilst some evidence was given as to the financial position of the [COMPANY_6] at relevant times, including the real value of the equity in the group controlled by [NAME_1] and, more importantly, the liquidity of the [COMPANY_6], I am not satisfied that I can make any reliable findings as to those matters. 5 [NAME_1] claims to have very limited ability to speak English, being restricted to simple greetings and the like. This claim is supported by the other witnesses called by him, but is in serious contest. I accept that [NAME_1]'s ability to speak English is limited. He is far from fluent. However, I am satisfied that his ability to understand English (particularly as it relates to gambling at a [NAME_3]) is adequate. [NAME_1] lived in Australia for some years, during which he commenced and conducted businesses. At the time he became an Australian citizen, one of the criteria to be fulfilled was that the applicant had an adequate knowledge of the English language. His first application was refused because of his inability to speak English. He then attended English classes, and his second application was successful. He has travelled extensively in English-speaking countries. He has gambled extensively at casinos in English-speaking countries, including Australia. A customs officer, who has no interest in the case, described an incident at Tullamarine International Airport on 14 January 1999 involving [NAME_1] which, on any view, included communication in English well beyond the ability now claimed by [NAME_1]. There is no dispute that the incident occurred, and that no interpreter was involved. The contemporaneous note by the customs officer bears out the substance of her evidence. I agree with the submission of counsel for Crown that, when properly understood, passages of the cross examination of [NAME_1] admit a greater facility to understand and speak English than has been claimed. My observations of the witness in giving evidence lent some support to this conclusion, although I would not act upon that impression alone. In coming to a conclusion as to this issue, I put to one side the evidence of employees of Crown which is inconsistent with the evidence of [NAME_1]. 6 [NAME_1] says that he has been a regular patron of Crown since 1998. On 23 August 1999 Mr [NAME_8], the nephew of [NAME_1], wrote a letter to the person responsible for international marketing at Crown which included the following: 'In regards to the possible collaboration between [NAME_5] in tourists' business to promote the Crown Resort in China, I strongly believe there is a great potential to attract players from China to come to Crown. To implement this would come cross many issues, such as fund transfer, confidentiality of players and visa, I look forward to meeting with you and discussing these issues further. As you know, [NAME_1] and I have been doing our best to support Crown by regularly bring to you many premium players. You would find only few of the players have come back along, they would come back only with us. The reason is simple, firstly, they may have a difficulty of fund transfer (RMB to hard currencies), and secondly, many of them do not like to expose their personal details to Crown. The problem will remain until China becomes more and more open, which is unlikely to be seen in the near future. In result of this, [NAME_1] and I have not been rewarded (in commission) as much as we would have entitled. In the past six months, I have introduced some premium players to you. According to the terms offered to [NAME_9] Operator by Crown, I would have entitle to a minimum of $250 or 0.05% calculated on their cash chip turnovers. But I have not received any of such payment. I understand that there are rules or restrictions bound the commission program in Crown. But within the rules and restrictions, certain flexibility is important in dealing with the Chinese Market. I write to seek your help to solve these problems. Last week, I introduce to you a premium [NAME_9], named [NAME_11]. I enclose with the letter a copy of the introduction form of premium players, which I faxed back to Melbourne on 19 August 1999. [NAME_10] did register with Crown. We arranged Australian Dollars for him to play. His turnover was about $80 millions and eventually he lost all in Crown. Now, we are responsible for collect RMB in China and bare the risk of the possible devaluation of the currency. Disappointingly, I was advised that I would not be paid any commissions this time, because they played together under [NAME_1]'s program. I know that the money (cash chips) might be from [NAME_1]'s account because of their arrangement on fund transfer, but they played separately. I cannot accept the fact of being denied a payment of commissions. We all know, the key to attract premier players to Crown from China is somewhat solve the problem of fund transfer. Under the current circumstances, RMB cannot be converted to hard currencies freely in China. We are helping Crown by absorbing the risk of potential devaluation of RMB. Notwithstanding our effort to bring customers regularly and disregarding the terms of introduce premium players, Crown refuses to pay commissions. This is wrong! In the beginning of the year, I went to Crown as a [NAME_9] Operator for the first time. We played cash chip programs. We played for two nights and our turnover was recorded as something a little over a million dollars. With $500,000 in front money and playing for 2 nights, we believe the turnover should be much more than a million, and therefore commission based on turnover should be much more we were paid. I questioned and asked for an investigation, but so far, there has been no satisfactory answer from Crown, and we had to accept the disappointing result.' That letter followed a visit to China by the recipient and a [NAME_12] (Senior Vice President, International Business Development of Crown), accompanied by [NAME_12], who was a Crown representative stationed in Shanghai. [NAME_1] and [NAME_7] assisted the Crown employees to make contacts on that trip. 7 When cross-examined on that letter, [NAME_7] said (in part): 'Because I want to suggest to you that what happening here is that you know sitting there in the witness box there are Chinese foreign exchange control regulations, right? --- That's correct, yes. And that Chinese nationals living in China would not be able directly to transfer Chinese RMB say to Australia for gambling purpose, agreed? --- Agreed. So what is happening is that in Hong Kong you and your company are transferring Hong Kong dollars to Crown aren't you? --- Yes. And you're doing so pursuant to an arrangement that - and when you do even though you're transferring them in your name [NAME_7]'s name or [NAME_1]'s name, you're doing so on behalf of persons who want to gamble at Crown who live in China, agreed? --- Technically. Exactly not technically, agree? --- Technically. So agree, thank you. And what you then tell the people in China is that because you've got currency in Hong Kong in Honk Kong dollars they should repay you in China in RMB and you can use those RMB in China to pay for your business operations, isn't that how it works? --- In many cases because the company was a subsidiary, it was invested by [COMPANY_5], in many ways we had to transfer Hong Kong dollars into China or US dollars, Australian dollars, whatever. … Are you saying you weren't referring specifically to [NAME_10] in that paragraph, you were referring to many premium players? --- I mean that I clearly remember I will never lending any money to [NAME_10]. But you will lend money to other premium players, will you? --- For people I know for people I can trust. Is the way you do this: that you make an arrangement with the premium [NAME_9] resident in China whereby on their behalf but in [NAME_1]'s name or in [NAME_5]'s name or indeed, in our name, you will remit Hong Kong dollars to Crown, that's the first step, do you agree that happens? --- I can't get your question, if you can repeat at it again, please. Do you agree that you make an arrangement with an Chinese gambler who wants to gamble at Crown whereby effectively you will act as a foreign exchange dealer whereby you will transfer Hong Kong dollars to Crown out of you or [NAME_1]'s or [NAME_5]'s account in Hong Kong against a promise by them to repay you or [NAME_5] in China with the RMB equivalent? --- I decline the words of currency dealer, it's quite normal for friends ask me if they want to come to Australia for a holiday, bring their families to holiday, if they have a difficulty to arrange Australian dollars I can lend to them, it's just as friendship. For someone come to Crown to play I have a limited resources, I'm not as rich as [NAME_1]. If there is anything that needs to have the company involved I will firstly consent to [NAME_1] and [NAME_1] who are the majority shareholder of the company, I will firstly consent with them, without them their approval I will not do any, transfer any funds to Australia. You were arranging these funds transfer on behalf of [NAME_1] using [NAME_1]'s money, weren't you? --- Again, [NAME_1] has to given me the instruction before I can do that. But it was a practice that you were carrying on in 1999, do you agree? --- Sorry? You were doing just that in 1999? --- Just doing what, sorry? Transferring money for friends of [NAME_1] to Crown against the promise by those friends to repay the funds that were transferred in RMB equivalent in China? --- Yes, I did.' 8 [NAME_13], who is referred to in that letter, is significant in the events which happened. [NAME_1] had known him since 1990, when [NAME_14] and [NAME_1]'s wife did business together in Shenzen in China. He had seen him several times a year since then. They had gambled together in Macau in 1990 and twice at Crown in 1999. One of those occasions was on a [NAME_9] arranged by [NAME_7]. 9 A "[NAME_9]" is defined in the [NAME_3] Act 1991 (Vic) ("the Act") s 3 to mean: '… an arrangement whereby a person or a group of people is introduced to a [NAME_3] operator by a [NAME_9] organiser or promoter who receives a commission based on the turnover of play in the [NAME_3] attributable to the persons introduced by the organiser or promoter or otherwise calculated by reference to such play' A "premium [NAME_9] arrangement" is defined to mean: 'an arrangement whereby a [NAME_3] operator agrees to pay a patron of the [NAME_3] a commission based on the patron's turnover of play in the [NAME_3] or otherwise calculated by reference to such play' 10 The operation of the [NAME_9] and [NAME_9] are as follows: '[NAME_9]

8. A [NAME_9] is a program whereby a [NAME_9] is entitled to receive a commission based upon the [NAME_9]'s gambling with the [NAME_3]. An international [NAME_9] would generally be one who would provide at least $50,000 in front money. Front money is the money which the patron brings to Crown to gamble with. The front money is placed into an account conducted by the Cage in the [NAME_9]'s name.

9. The [NAME_9] is then entitled to purchase chip purchase vouchers up to the amount of the funds held by the Cage on account of the [NAME_9] and to the extent of any funds advanced by Crown pursuant to a cheque cashing facility which may have been arranged by the [NAME_9].

10. Upon purchase of a chip purchase voucher the [NAME_9] signs the withdrawal form to acknowledge the receipt of a chip purchase voucher for a certain amount from their account.

11. The [NAME_9] then takes the chip purchase voucher to a gambling table, where it is then signed and chips to the value of the voucher are then provided to the [NAME_9].

12. The [NAME_9] is then entitled to gamble using the chips. If the [NAME_9] loses, the chips are then collected by the dealer. If the [NAME_9] wins whilst gambling, the Premium Players [sic] receives commission based play chips as winnings. [NAME_9]

13. A [NAME_9] is a program whereby a person called a [NAME_9] organiser arranges a group of people who want to gamble. The [NAME_9] is entitled to receive a commission from Crown based upon the exchange of commission chips for non-negotiable chips. The commission that is paid to the [NAME_9] is higher than that paid to a [NAME_9] on a [NAME_9].

14. With a [NAME_9], the Cage receives funds from the [NAME_9] to make up the required front money to allow gambling on the [NAME_9] to occur. There is no direct dealing with the [NAME_9] players. All dealings with the cage are by the [NAME_9].

15. The front money may be provided from a variety of sources including from all or some of the [NAME_9] players, the [NAME_9] organiser, a cashed cheque, or an arranged credit facility.

16. Gambling by [NAME_9] players is conducted using "non-negotiable" gambling chips. These can only be obtained by the [NAME_9] first obtaining from the Cage a non-negotiable chip purchase voucher. The [NAME_9] obtains a non-negotiable chip purchase voucher from the Cage. The non-negotiable chip purchase voucher is a form provided in triplicate and consisting of three separate parts. The first part being an account deposit and withdrawal, the second part being a patron receipt and the third party [sic] being a non-negotiable chip purchase voucher.

17. Upon the purchase of a non-negotiable purchase voucher the [NAME_9] signs the account of deposit and withdrawal form to acknowledge the receipt of a chip purchase voucher and that the face value of the voucher has been debited to the [NAME_9]'s account.

18. The [NAME_9] then takes the chip purchase voucher to a gambling table, where it is then signed and chips to the value of the voucher are then provided to the [NAME_9] who then provides non-negotiable chips to the [NAME_9].

19. The [NAME_9] is not entitled to receive commission on gambling conducted with commission based play chips. Accordingly whilst [NAME_9] is entitled to gamble using the commission based play chips, [NAME_9] usually then returns the chips to the [NAME_9] who provides them to the Cage, credits them to the account of [NAME_9] and receives an account deposit and withdrawal form acknowledging the receipt of the commission based play chips by the [NAME_9] and then purchases non-negotiable chips purchase vouchers.' 11 [NAME_7] had received approval to act as a [NAME_9] organiser pursuant to the Act at about the end of 1998. [NAME_14] was present on at least one of his junkets in 1999. On that occasion [NAME_1] and his wife, [NAME_1], were present. Credit of $600,000 was afforded to [NAME_14]. [NAME_7] says that this was backed by the equivalent in RMB provided by [NAME_14] prior to the visit. This money was quickly lost. [NAME_14] importuned all for a loan, and the evidence is that [NAME_1] succumbed and lent him $100,000 against the wishes of [NAME_1]. [NAME_1] and [NAME_7] say that they did not, and would not, lend any money to [NAME_14]. I have some doubt as to the true nature of the dealings in relation to that [NAME_9]. 12 The contemporaneous documents indicate that [NAME_1] gambled on [NAME_7]'s [NAME_9] once in September 1999. They also indicate that in August 1999 he and [NAME_14] had gambled firstly on [NAME_1]'s program and then on [NAME_10]'s program, with the settlement a combination of both. The internal Crown records relating to [NAME_14] show that he "played under" [NAME_1] from 18 August 1999 to 20 August 1999, and under the [NAME_7] [NAME_9] on 17 September 1999. Those events are consistent with the records in relation to [NAME_1] and [NAME_7] and with the evidence of [NAME_7] and [NAME_1]. It is not clear what was meant by the description "played under" in relation to the August visit. [NAME_1] denied that he lent any funds to [NAME_14] in connection with that visit, or at all. 13 By a document dated 29 January 2000 [NAME_1] applied to Crown for a credit facility, which was granted on 8 February 2000, in the sum of $500,000. The internal Crown document which considered that application summarised the past history of [NAME_1] at Crown in the following way: 'Past History at Crown Last Visit 1999 History Total History No of Visits: 19 12-14/11/99 Front Money Last Visit: $500k Turnover: $10.80m $121.98m $150.44m Crown Win/(Loss): ($93.4k) $359.1k $630.7k Commission: $70.2k $785.8k $961.18k'

14 That credit facility related to a visit by [NAME_1] to Crown in February 2000. When the credit was drawn upon to obtain chips for gambling, [NAME_1] provided a counter cheque, drawn upon his account at the Hong Kong & Shanghai Banking Corporation ("[NAME_15]"), Peninsula Centre Branch, Hong Kong, in the amount of the credit to Crown, to secure repayment. Credit was advanced on the basis of dollar per dollar. This required [NAME_1] to provide at least $500,000 in advance – known as "front money". He could then draw chips to the value of $1 million. He in fact provided $504,000 as front money. On that visit his gambling turnover was $1.7 million, he won $85,000 and received commission of $11,000. The counter cheque was redeemed before he left. 15 His next visit was in April 2000. On this occasion, initially credit was again advanced on a dollar for dollar basis up to $500,000, however credit was then extended to a $2 for $1 basis up to $1 million. In other words, if front money of $500,000 was provided, credit of $1 million would be advanced, thus permitting chips to the value of $1.5 million to be drawn. On that visit, his turnover was $10,560,000, he won $73,000 and earned commission of $68,600. Counter cheques totalling $996,000 were provided, and redeemed at the end of the visit. 16 [NAME_1]'s next visit to Crown was in May 2000. On this occasion, credit was again advanced on a $2 for $1 basis up to $1 million. A counter cheque of $1 million was provided and was redeemed in due course. On a visit in June 2000 a counter cheque for $500,000 was provided and was redeemed in due course. 17 There is no dispute about the fact that when [NAME_1] left Crown on 20 July 2000, after another visit, he owed Crown $2,797,041, having lost approximately $5 million. He had provided front money of $500,000, and had provided a further $1,522,070 by telegraphic transfer during the visit. He had provided counter cheques drawn upon [NAME_15] to the total value of $3 million. On that visit, [NAME_1] signed two [NAME_9] – one relating to the front money of $500,000 and the other to the agreed credit of $500,000. It appears from the internal Crown records that [NAME_1] was host to at least ten other people on the July visit. It is not clear precisely who they were, whether any of them were involved in the gambling losses, or whether any of them funded the gambling. He did not sign the [NAME_9] Settlement Sheet or give written instructions as to what should be done about the amount owing or the counter cheques before leaving. 18 [NAME_1] claims that as he left Crown he had a discussion, through an interpreter, with [NAME_12] as follows: 'Me: "If I repay the money I have lost in one or two weeks, will you give me a discount of AUD$700,000?" [NAME_12]: "No, I can't give you that amount of discount." Me: "I want that discount or I won't come back to gamble."' In evidence, he said that [NAME_12] said that he would have to ask his superior. [NAME_12] denied any such conversation. 19 [NAME_1] gave evidence that when he reached Hong Kong from Melbourne he called [NAME_12] in Shanghai and sought a discount of $700,000. Negotiations then ensued for some time, and he claims that ultimately [NAME_12] agreed, on behalf of Crown, to a discount of $500,000 and the provision of $200,000 "lucky money" to be only utilised for gambling at Crown, on the basis that he would return to gamble at Crown. [NAME_12] is no longer employed by Crown, and was not called to give evidence. 20 [NAME_12] gave the following evidence: 'Later, once I became aware that [NAME_1] had not paid the debt due to Crown, I recall that a number of proposals were made in order to clear out the outstanding debt quickly. A discount could be considered subject to VCGA [[NAME_3] Authority] approval. I have a recollection of discussions taking place between myself and [NAME_7] about this issue, although I cannot recall the exact date but can only recall declining a request for a discounted settlement. I do recall being advised by [NAME_12] that she had engaged in negotiations with [NAME_1]. It is possible that in the course of these discussions that [NAME_12] offered [NAME_1] a discount on the basis that he would clear the debt immediately. Such discussions were undertaken between [NAME_12], [NAME_16] & [NAME_1] or [NAME_7]. I was not involved in any discussions regarding this matter after my discussion with [NAME_7].' [NAME_7] nor Mr [NAME_16], the President of [NAME_17], gave evidence in chief on the topic. 21 A contemporaneous internal email from [NAME_12] corroborates his version to the extent that reference is made to a request by [NAME_1] during settlement that Crown pay for the air tickets of his party of ten plus guests, which was acceded to by him on the spot, but no reference is made to any request for a discount. On the other hand, that message seems to imply that [NAME_12] was either present during or on call during the settlement involving [NAME_1], which might be seen as contrary to the impression left by another Crown witness that [NAME_1] left abruptly, without leaving any instructions as to the funds. 22 The following emails were sent to [NAME_12] from the China office of Crown (omitting formal parts): 1 July: 'Further to our conversation last night, please be advised that I have informed [NAME_1] about condition discount which we can accept and offer. [NAME_1] is unhappy, but he admitted his borrow and he will make payment back. Unfortunately, [NAME_1] felt unwell and he is in hospital now, so I can't confirm with him the date for payment. Combination of stress, not only for lost.' 1 August: '[NAME_1] promised [NAME_12] to clear his CCF payment once he leave hospital, but he hasn't give a call to [NAME_12] since last phone conversation. We will keep in contact with him.' 25 August: '[NAME_12] and I met [NAME_1] on Tuesday, 22/08/00 regarding his CCF settlement. He wants further discount on it (HK$10M around AU$2.2M could be paid in one hour if permitted). He will also arrange another AU$5M to play in September if we give him AU$300K cash chips. Please inform us your decision on it. Thank You for your attention!' 13 September: '[NAME_1] does not accept conditions we can comprimise as discussed previously:

1. The fund he owed was 2.79M (with a deduction of 130K early payment) instead of 2.4M, we offer 300K comp bets if he brings 5M front money in total. [NAME_1] insisted that he will only pay for 2.4M, with bringing another $2.6M and [obscured]tting 300k comp bets on arrival, however, without getting what he wants, he brings the money to Star City. I suggest we can consider to send him a reminder letter or a legal letter from Melbounre head office to his Sydney home address. Look forward to your comments.' 23 At about that time [NAME_12] sent the following message to the China office of Crown: '[NAME_1] is currently gambling in Star City. We should be showing him we are serious in the recovery of our owed funds.' 24 No agreement as to discount was recorded or referred to in any contemporaneous document. [NAME_12] denies that any agreement was reached, although his recall of the negotiations was not good. He made the point that no agreement could have been reached without the approval of the [NAME_3] Authority. I am not satisfied that there was any agreement between [NAME_12] and [NAME_1] for a discount. I accept that senior management of Crown did not authorise or ratify such an agreement. It was not seriously argued that [NAME_12] had actual or ostensible authority to make any such agreement. 25 The counter cheques which [NAME_1] had signed in July were retained by Crown but were not presented because of the negotiations. 26 On 1 October 2000 [NAME_1] and his wife, [NAME_1], travelled from Shanghai to the Philippines for the opening of its first [NAME_3]. On the same day [NAME_12] emailed Crown employees asking them to: 'Please arrange bookings for [NAME_10], [NAME_10] [NAME_10] & [NAME_1], [NAME_1] group who will be arriving separately to Crown on 2 Oct and 4 Oct 2000. This booking is requested by [NAME_10] for Strict Confidentiality.' Those to arrive on Monday, 2 October, were [NAME_14] and [NAME_10] (known as [NAME_10]), with the [NAME_1] group to arrive on Wednesday,4 October. It was indicated that the Program was to be advised, but that it would consist of $2 million for [NAME_14] and $1 million for [NAME_1]. 27 The internal records of Crown show that the arrangements for the visit by [NAME_10] and [NAME_14] were made by [NAME_12], Manager of International Tours and Marketing in Hong Kong and China for Crown, who met them on arrival. Arrangements were made for [NAME_10], [NAME_14], [NAME_12] and [NAME_12] to play golf together on 3 October. Credit for gambling for the two days prior to the arrival of [NAME_1] was afforded to [NAME_14] by [NAME_12] as arranged by [NAME_12]. It was noted that [NAME_14] would be "playing with [NAME_1] as of 3/10". 28 The version of the visit to Crown in October given by [NAME_1] is simple, and is best captured from his affidavit: '27. On 3 and 4 October 2000 a total of AUD$3,658,000 was remitted into Crown's account at [NAME_15]. I believed that this amount would pay the July Debt in full and provide me with additional funds of approximately AUD$1 million with which to gamble. … 28. On 4 October 2000 at approximately midday I arrived at Melbourne airport with my wife and we were met by Crown representatives.

29. Upon arriving at Crown I was met by [NAME_12] and [NAME_12], a Crown interpreter. I did not go through the Check-in Process because I wanted to wait for a close friend, [NAME_10]. I intended to draw on my surplus funds for the purpose of gambling after [NAME_10] arrived at Crown. I did however have a conversation with [NAME_12] and [NAME_12], acting as interpreter, in the reception area of Crown during which words were said which included words to the following effect: Me: "Please ask Mr [NAME_12] if my funds have been received". [NAME_12]: "Mr [NAME_12] says yes. Good everything is settled now". 30. [NAME_12] then pointed to the Cage Manager's office and I walked with him into the office. [NAME_12] did not come with me. While in the office [NAME_12] tried to hand me documents which appeared to me to be the same as the documents used in the Check-In Process each time I want to draw gambling funds. [NAME_12] indicated to me by gestures what I understood to mean that I should sign the documents. I raised my hands and said "No". To the best of my knowledge, [NAME_12] does not speak Mandarin so I could not tell him that I was waiting for [NAME_10]. I left the Cage Manager's office and went back to see my wife, [NAME_1] who was waiting in the reception area for me.

31. At the same time, I knew that a business acquaintance of mine from Shanghai, [NAME_18] ("[NAME_10]") was intending to visit Crown to gamble at about the same time. I have known [NAME_10] since approximately 1991 and I have seen him gambling on a previous visit to Crown and knew him to be a big gambler who was very entertaining to watch.

32. After I arrived at Crown I went into the high rollers' room and saw [NAME_10] waiting to commence gambling. I had a conversation with [NAME_10] … 33. At no time did I offer to give [NAME_10] any money and [NAME_10] did not ask me to give him money. As referred to in paragraph 30, I had refused to sign the documents shown to me by [NAME_12]. I had not gone through the Check-In Process and had not signed any other documents. No other Crown representative asked me to sign any documents and I did not agree to sign any documents at a later time to place funds in [NAME_10]'s [NAME_9]. No Crown representative or employee asked me to give [NAME_10] money from my account. At no time did I agree with [NAME_12] or anyone else that funds could be withdrawn from the money which I had remitted into Crown's account to pay the July debt, to allow those funds to be placed in [NAME_10]'s [NAME_9]. I would never have put any money in [NAME_19] or any other [NAME_9] Operator's account, except my nephew, [NAME_7]. Further, I have never given an oral instruction at Crown or any other [NAME_3] for my money to be removed from my account. … 34. During the afternoon of 4 October 2000 I can recall seeing [NAME_10] get very impatient because there appeared to be a delay in the commencement of gambling. After some time everyone moved to another table to commence gambling. I watched [NAME_10] gamble during the afternoon of 4 October. I got the impression that [NAME_10] lost a lot of money. I did not gamble as a member in [NAME_10]'s [NAME_9]. I have no way of knowing how part of the funds which I remitted to Crown account in full payment of the July debt came to be withdrawn from Crown's account and placed in [NAME_10]'s [NAME_9] account.

35. Later on 4 October 2000 my wife and I went to dinner at the Crown hotel with [NAME_10], [NAME_10] and [NAME_12]. I can recall that [NAME_12] called in to say hello during the time we were having dinner.

36. On 5 October 2000 I received a telephone call from [NAME_10] during which words were said which included words to the following effect: [NAME_10]: "I am not going to be able to come to Melbourne. Can we meet in Sydney?" Me: "Yes. I will come up to Sydney today." My wife and I then checked out of the Crown hotel on 5 October. I did not go to the [NAME_3] and redeem the surplus funds which I had remitted into Crown's account because at that time, I expected I could return in a few days and would gamble.' 29 The Crown version is radically different. In essence, it was that funds remitted to Crown on 3 and 4 October on [NAME_1]'s authority totalling $3,658.049 were, according to verbal instructions from [NAME_1] to [NAME_12] on 4 October, as to $2.2 million, transferred to the credit of the [NAME_9] of [NAME_10] ("the [NAME_10]") and, as to $1,458,049, applied as part payment of the outstanding debt due to Crown from July. [NAME_1] thereafter was a member of the [NAME_10] and did not gamble on his own. All dealings thereafter were with the [NAME_9] operator and there were no other dealings on [NAME_1]'s account. 30 It is common ground that [NAME_1] did not thereafter gamble on any program of his own. Indeed, I accept that the actual gambling was done by [NAME_14] save for a few hands in which [NAME_1] took part by what is called "squeezing the cards". [NAME_1] remained with [NAME_14] during his gambling. He says it was for entertainment whilst awaiting the arrival of another gambler. Crown suggests that he was a joint venturer in the gambling. 31 [NAME_10] was granted approval to conduct junkets at Crown by the [NAME_3] Authority on 29 March 1999. She was granted a "Full Card" per [NAME_12] on 25 June 2000. She met [NAME_14] at Crown on 2 October. They both stayed until 7 October 2000. There is no record of any gambling transaction prior to 4 October involving her. On that day, she signed a [NAME_9] agreement ("the [NAME_9] Agreement") providing for front money (funds to be deposited) of $2.2 million, the [NAME_9] players were identified as [NAME_1] and [NAME_14], commission was 1.6% of cash chip turnover and there was a special condition: 'All commission and winnings to be held until all outstandings are cleared by [NAME_1] Li Pi [NAME_1]'. 32 The [NAME_9] signed by her on the same day recorded $2.2 million as having been received from [NAME_1]. A post-it note was attached to that Record which read as follows: '#1003029 [NAME_18] #108351 [NAME_1] Mr [NAME_10] line needs to be redeemed at settlement. Payment plan in process for [NAME_1] Re: Service Mgr before redeeming any funds' 33 There is no record of any credit being offered by Crown to [NAME_10]'s [NAME_9] as such. There are Crown records of transactions between 4 October and 6 October on this account. There were two partial settlements by way of payment of commission on 4 October, a partial settlement of commission on 6 October and a final settlement of commission at 1800 hours on 6 October. There were no winnings. The front money of $2.2 million was lost. 34 There is reference in the settlement sheets of 6 October to front money of $2,523,000 rather than $2.2 million. This increase was not explained. It may have been reinvested commissions. It may have been provided by credit advanced to [NAME_14]. The Crown records show that an initial $30,000 credit was given to him on 3 October, to be cleared when funds arrived that day, and then the advancing of further credit on 6 October which was not completely repaid upon departure on 7 October or later, ultimately leaving some $260,000 unpaid. The records show minor gambling on his account on 2 and 3 October (with buy-ins of $53,600 and $20,400 respectively) and buy-ins of $273,100 on 6 October. There had been buy-ins of $4,158,000 on the [NAME_10] account on 6 October. 35 The internal Crown documents are consistent with the case put forward by it. The difficulty is that none of them are signed by [NAME_1]. The sequence of events recorded by documents providing for signature on the account of [NAME_1] is as follows: 4 October 14:38pm Account deposit and withdrawal – Account Deposit $3,658,049 and the receipt of $1,458,049 from deposit account, leaving a deposit balance of $2,200,000 (with a corresponding Patron receipt) 15:01pm Account withdrawal – acknowledging receipt of $2,200,000 from deposit account (and corresponding Patron receipt) 16:23pm Safekeeping withdrawal – acknowledging receipt of $1,661,008 of safekeeping funds deposited (and corresponding safekeeping withdrawal receipt) leaving a safekeeping deposit balance of nil. The account deposit and withdrawal was noted "Patron unable to sign". The other two documents were noted "unavailable to sign". I shall return to the events of 4 October in due course. 36 On 11 [NAME_1] wrote to the Cage Manager at Crown as follows (omitting formal parts): 'On 3rd & 4th October 2000, I transferred following funds to my account with Crown:- AUD1,175,088.13 AUD 1,189,060.64 USD400,000.00 USD300,000.00 I write to request an immediate settlement of my account, and transfer the balance to my personal account as following: [COMPANY_20] G/F Peninsula Centre [ADDRESS], Tsim Sha Tsui East, Kowloon, Hong Kong. Account No 198-125825-888 in the name of [NAME_1] you for your kind assistance.' 37 At about 5.30pm on 15 October 2000 Las Vegas, Nevada, time, which was 16 October 2000 Melbourne time, a [NAME_21] from the finance section of Crown telephoned [COMPANY_22] and told [COMPANY_22] that Crown wanted to list [NAME_1], patron no 108351, as not having paid a debt due and owing of $1,338,992. As a result, on that day, [COMPANY_22] entered a warning in its database that [NAME_1] was a [NAME_3] at Crown in the amount of $1,338,992. Subscribers to the database included many casinos in many parts of the world and the major travellers cheque issuing companies. It is not clear when [NAME_1] became aware of this listing, but it was at least by February 2001. It is likely to have been some months earlier. 38 On 17 October 2000, the solicitors for Crown wrote to [NAME_1] as follows (omitting formal parts): 'We act for [COMPANY_2] ("Crown") of Melbourne, Australia. We are instructed by our client that you own Crown A$1,338,992 which has been outstanding since 14 August 2000 and that you have failed to pay the outstanding amount as requested by our client. On behalf of our client, we hereby demand that you settle the outstanding debt of A$1,338,992 by Friday 20 October 2000, failing which we have been instructed to issue legal proceedings against you to recover the amount outstanding together with interest and legal costs without further notice.' 39 On 19 October 2000 the Crown Cage Manager replied to the letter from [NAME_1] of 11 October as follows (omitting formal parts): 'Confirmation of settlement instructions We refer to your letter to us dated 11 October 2000 regarding the telegraphic transfer of the total of AUD $3,658,049 to your account with Crown on 3 and 4 October 2000. In accordance with your verbal instructions on 4th October 2000 to [NAME_12] and myself, Crown, (a) transferred AUD $2,200,000 to [NAME_10]; and (b) applied as part payment AUD $1,458,049 to your outstanding debt that is due to Crown. We note your request in your letter that we settle your account by transferring to your personal account the balance of your telegraphic transfer of monies to Crown. However, as set out above, those moneys have been transferred and applied by Crown as requested previously by you and there is no further balance available. Please do not hesitate to contact us if you have any queries.' 40 During October Crown caused [NAME_23] to present the counter cheques which had been signed by [NAME_1] in July to the [NAME_15] in Hong Kong, but [NAME_1] instructed the bank not to pay as it was a mistake. The cheques were not honoured. 41 [NAME_7] had a telephone conversation with [NAME_12] and a meeting with [NAME_16] in November 2000 about the matter. The contents of each are disputed, and the matter was not resolved. [NAME_7] claims to have sent a facsimile of 27 November to [NAME_16] on the topic, but [NAME_16] denies any knowledge of it. There was a further inconclusive meeting in March or April 2001 between [NAME_1], [NAME_7] and [NAME_16], and a final meeting between [NAME_1] and [NAME_16] in June 2001. No settlement was reached. 42 By letter dated 3 July 2001 solicitors for [NAME_1] replied to the letter from Crown's solicitors dated 17 October 2000 as follows (omitting formal parts): 'We have received instructions to act for [NAME_1], [NAME_1]. Our client has handed to us your letters to him of 17 October 2000. He has also provided us with other correspondence and documents relating to the issue at hand. Our instructions are that in or about 2 October 2000 our client was indebted to your client, [COMPANY_2] in the sum of AUD $2.7 million. On 3 October 2000 our client arranged for the remittance of AUD $3,658,049.00 which we note was received by your client on that date. On 4 October 2000 our client visited the [NAME_3] in Melbourne with [NAME_24]. Because of an urgent business commitment our client left the [NAME_3] and did not engage in any gambling. Our client then returned to Sydney and then to Shanghai on the first available flight. By a letter dated 19 October 2000 your client alleged that our client gave certain instructions for the transfer of AUD $2,200,000.00 to [NAME_25]. Our client strenuously denies that he gave any such instruction. He had made that clear to your client. Notwithstanding this, your client through your firm, has claimed these moneys. Our client says that the correct position is as follows:- 1. As at 2 October there was an amount of AUD $2.7 million owing. Your client agreed to discount this by AUD $600,000 for payment. As at 3 October 2000 our client transferred AUD $3,658,049 to your client to the credit of his account.

2. Our client should have, and is entitled to be paid forthwith the amount of AUD $1,450,000 approximately being the balance of moneys which should stand at the credit of his account. We would be grateful if you would obtain instructions from your client and if your client persists in alleging that it had authority (which is denied) then we invite you to provide us with a copy of any documentation supporting that allegation. Our client would prefer this matter not to result in litigation unless it can avoid it. We are therefore instructed to put to you:- 1. Your client can pay to us within the next 21 days a cheque in favour of our client for the full amount of AUD $850,000 (being the amount approximately to the credit of his account) together with interest thereon up to the date hereof at the Supreme Court Victoria rates; or 2. We will be happy to arrange a meeting with you and the representatives of your client in Melbourne in August 2001. We look forward to hearing from you.' 43 The evidence of [NAME_1] (supported by [NAME_7] and other witnesses) is that from late 2000 onwards bank officers from major Chinese banks, friends, business acquaintances and employees of other casinos referred in one way or another to his alleged indebtedness to Crown. Notwithstanding the history of the matter, [NAME_1] returned with guests to Crown in April and June 2001. 44 On 16 July 2001 Crown commenced proceedings against [NAME_1] in Hong Kong for recovery of the amount alleged to be outstanding. Those proceedings received publicity in Hong Kong. The present proceeding was commenced by [NAME_1] on 28 August 2001. 45 I have outlined the contentions of the parties as to what occurred on 4 October. I have set out [NAME_1]'s version, which is broadly supported by his wife, [NAME_1], although she was not in a position to, and did not, observe what occurred between [NAME_1] and [NAME_12]. [NAME_12] met [NAME_1] in the Mahogany Room near the cage which was in that room. The cage is an enclosed area which has the following functions to: '(a) receive funds and to deposit that money into standing accounts established in the name of a premium [NAME_9] or [NAME_9] operator. We usually call these accounts their "front money accounts", but all transactions between Crown and patrons are conducted using these accounts; (b) issue chip purchase vouchers; (c) credit unused chip purchase vouchers or unused non-negotiable chips purchased with chip purchaser vouchers; (d) accept for credit to a [NAME_9]'s account commission based play chips won by the [NAME_9] and provided to the Cage by the [NAME_9]; (e) calculate commission; (f) and arrange disbursements of funds held in patron's account in accordance with instructions received.' [NAME_14], [NAME_10] and [NAME_12] were also present. Mr [NAME_12], the Cage Manager, and Mr [NAME_12], the Shift Manager, were in the cage. [NAME_26], a Services Manager, was in the adjoining buy-in room. 46 [NAME_12]'s version of events is as follows: '21. I then had a discussion with [NAME_1]. Our discussion was relatively brief, perhaps ten minutes. It took place while we were both standing immediately in front of the cage in the Mahogany room. When the discussion commenced, [NAME_10], [NAME_10] and [NAME_12] were standing a few metres away. [NAME_12] was standing in the cage and a short while after our discussion commenced, [NAME_10] & [NAME_12] moved to the Cage while [NAME_10] moved to the lounge chairs nearby.

22. The discussion between myself and [NAME_1] was as follows: [NAME_12] "[NAME_1], we have to do something about the July debt. I want to apply most of the funds we are now holding for you towards the amount outstanding from July". [NAME_1] "I need that money for the [NAME_9] to gamble today". [NAME_12] "We need to credit at least $2 million against the outstanding amount, the remainder will be paid from winnings or commission". [NAME_1] "Not that much. I need at least $2 million today". We continued to negotiate over the amount. Finally, our discussion concluded with words to the following effect: [NAME_12] "$2.2 million is the most we can give you for the [NAME_9]. We will need the rest credited against the July outstanding". [NAME_1] "OK". I then turned to [NAME_12] who was in the cage area and said words to the following effect: [NAME_12] "[NAME_12], [NAME_1] is to have $2.2 million of the funds we are currently holding put in [NAME_10]'s [NAME_9]. The rest is to go against any amounts currently outstanding. Commission and winnings should be used to cover the remaining outstanding debt".

23. When I stated these words to [NAME_12], [NAME_1] was still standing beside me … 24. Once my discussion with [NAME_1] had ended, and I had given the instruction to [NAME_12], I walked away from the cage area on my way out of the Mahogany room. As I was walking away I saw [NAME_1] enter the buy-in room, which is next to the cage. The door to that room was open and, in the course of my discussion with [NAME_1], I had seen [NAME_10] enter that room, accompanied by one of the services managers, [NAME_26] and [NAME_12].' This version was supported in evidence in various respects by [NAME_12], [NAME_12], [NAME_26] and [NAME_12]. There is one aspect of this evidence which warrants noting. [NAME_12] was responsible for documenting the arrangement between [NAME_12] and [NAME_1] and failed to do so in that no signature was obtained from [NAME_1]. His evidence was that he was within earshot of the conversation between [NAME_12] and [NAME_1]. Despite some inconsistency, the net result of his evidence was that all that he heard [NAME_1] say was that he needed front money to play with, with no reference to the [NAME_9]. The reference to the [NAME_9] was by [NAME_12] in his instructions to [NAME_12]. 47 On 19 October 2000 [NAME_12] was asked by [NAME_12] to confirm her observations in writing. She made the following statement, which she confirmed in evidence: 'I, [NAME_27], would like to make the following statement regarding the AUS $2.2 million transferred by [NAME_1] to [NAME_10]'s [NAME_9] account. On 2nd October 2000, [NAME_13] and [NAME_10] arrived in Crown. [NAME_10] told me that [NAME_1] was helping him to transferring [sic] money for him. He would wait until [NAME_1] arriving [sic] in Crown to decide whether to play with [NAME_10]'s [NAME_9] or not. On 4th October 2000, Mr and [NAME_1] arrived in Crown. The money was also transferred into Crown's account. After the negotiation between [NAME_1] and [NAME_12] on the exact amount of money to play with and the amount to redeem [NAME_1]'s debt to Crown, [NAME_1] gave his instruction clearly in English to [NAME_12], the service manager, the cage manager on duty and myself that he would like to transfer AUS $2.2 million to [NAME_10]'s [NAME_9] account to play and the balance (of the total amount of money transferred to Crown) would be used to redeem partial of his outstanding CCF to Crown. I would like to hereby state that all the above statement is truth.' 48 The Crown employees were cross-examined as to precise timing and positioning during the critical period on 4 October to suggest discrepancies or difficulties with the detail of their evidence. That cross-examination did not shake the essentials of their version of events. Nothing in the manner of giving evidence caused me to disbelieve any Crown witness. It was not put to any Crown witness that evidence had been fabricated or that there was a conspiracy to give false evidence in order to cover up the truth. In particular, it was not put to [NAME_12] that she had fabricated both her evidence and her note of 19 October 2000. It was suggested that there is inconsistency between the two. I do not regard any difference as material. The consistency between versions of the Crown witnesses could hardly be ascribed to coincidental mistakes by each of them. If [NAME_1] is correct, the evidence of the Crown witnesses must have been deliberately false, and false in concert. It is clear enough that the effect of the contemporaneous documents, and the sequence and timing of them, is consistent with the evidence of the Crown witnesses and not consistent with the evidence of [NAME_1]. If that evidence is false, then there must have been at least some falsification of documents. I was not invited to make such a finding. 49 I do not regard the evidence of the Crown witnesses as necessarily inconsistent with the objective facts or with the inherent probabilities, although there are questions to be considered. The lack of written authority by [NAME_1] to the appropriation of funds to the [NAME_10] is a significant issue. As commonsense would suggest, the system provided for a signature. The strict regulatory control of financial transactions in casinos would point in the same direction. Indeed, there is mention in the evidence that the statutory regime required that a signature be obtained in these circumstances, although I was not referred to any such provision in submissions. Transferring a significant sum to the account of another was hardly an ordinary transaction. [NAME_1] was neither unable nor unavailable to sign on 4 October 2000. To say so on the forms was false. 50 It is one thing to not receive a signature to an administrative document. It is another to not receive written authority to pay monies from one account to the credit of another. It would have been simple to refuse to effect the buy-in for [NAME_10] until signatures had been obtained from [NAME_1]. However, I accept the evidence that some "high roller" patrons (including [NAME_1] on other occasions) were difficult to persuade to follow rules, and that in the interests of client relations staff may not always have been as assiduous as they should have been in obtaining signatures. Indeed, [NAME_1] had not signed some documents he should have on previous trips. It will also be recalled that [NAME_1]'s own version of events has him declining to sign documents as requested. [NAME_1] indicated at various points of his evidence that he had a lively (perhaps exaggerated) appreciation of the value of a "high roller" to a [NAME_3]. 51 Why would [NAME_1] gamble in [NAME_10]'s [NAME_9]? I have no reason to doubt his evidence that he had previously taken part in only one [NAME_9] – that of his nephew, [NAME_7], for family reasons. I accept that he could arrange an individual program just as beneficial in relation to commissions and the like as a [NAME_9]. He was fully conversant with [NAME_3] procedures, and did not need the assistance of an experienced [NAME_9] operator. Indeed, he was accustomed to invite guests. Further, why would [NAME_1] fund [NAME_14] to gamble in [NAME_10]'s [NAME_9]? I accept that [NAME_1] regarded him as a somewhat reckless gambler, who was not in a good financial situation. I accept the evidence of [NAME_1] (corroborated by his wife and [NAME_7]) that he had refused to advance money to [NAME_10] on a previous gambling trip, and was annoyed with his wife for so doing. If the money being gambled on 4 and 5 October 2000 was [NAME_1]'s, why was he so passive, simply accompanying [NAME_10] whilst he gambled, with an occasional "squeeze of the cards"? [NAME_1] was a keen gambler himself. 52 These are puzzling questions to which the evidence does not provide certain answers. [NAME_14] nor [NAME_10] gave evidence. [NAME_12] did not give evidence. I am far from satisfied that [NAME_1] and his wife disclosed the full story of their relationship with [NAME_14], which went back over a number of years. [NAME_1] had gambled with him at Crown previously, and I have no doubt that they met at Crown by arrangement on this occasion. It is unlikely that they met on 4 October by coincidence, or that [NAME_1] accompanied [NAME_14] at the tables and at dinner simply to have fun whilst filling in time. The key more than likely lies in the facility which [NAME_1]'s corporate interests was able to afford in the provision of hard currency to overseas casinos on account of Chinese nationals, explained (to some extent) by [NAME_7]. I accept that this facility would not have been afforded to [NAME_14] without an appropriate back-to-back transaction. It should not be overlooked that it may be concluded from the evidence of [NAME_7] (plus some informed conjecture) that there is good reason arising from Chinese law in relation to transmission of currency for the witnesses not being completely frank about such transactions. I am not in a position to find that there was any such back to back transaction, but the possibility of it assists in recognising that what may seem odd on the face of it may be explicable. 53 Counsel for [NAME_1] argued that the arrangement which [NAME_12] said he came to is inconsistent with Crown's attitude to the discount negotiations which had taken place to that time. The result of the alleged arrangement was that a good deal less than the minimum previously insisted upon by Crown was applied towards payment of the July debt. However, [NAME_12] satisfactorily explained, firstly, that the earlier negotiations had involved a discount and, secondly, that Crown was protected by the rider to the arrangement concerning winnings and commissions. It seems to me that applying commissions and winnings in respect of the amount advanced to the [NAME_9] to repayment of the July debt of [NAME_1] amounted to a "tails I win, heads you lose" toss of the coin. If there were winnings, then the July debt would be reduced or eliminated. If the stake was lost, Crown had made a corresponding trading gain or profit on gaming, and the July debt (still covered by counter cheques) was significantly reduced. 54 Other issues were relied upon by counsel for [NAME_1]. One was that the rider was not complied with, as both partial and final settlements of commission were paid out to [NAME_10]. In my opinion, this was poor administration. Another was the reference on the post-it note as to [NAME_14]'s line needing to be redeemed. [NAME_12] accepted in cross-examination that he must have had an understanding that at least some of the funds must have been advanced to [NAME_10]. The reference in the note to a payment plan being in process for [NAME_1] is also odd. One difficulty is that it is not clear when the post-it note was written. Credit had been advanced to [NAME_10] prior to [NAME_1]'s arrival on 4 October 2000 and after his departure on 5 October. Any ambiguity in the note is not sufficient to displace the effect of the other evidence. 55 Counsel for [NAME_1] sought to make something of the argument that [NAME_10] did not consent to the term concerning application of commissions and winnings. It was submitted that the special condition in the [NAME_9] Agreement differed from the oral agreement alleged. In my view, there is no difference in substance and, in any event, I find that [NAME_10] was well aware of the arrangement between [NAME_1]. 56 I regard it as inherently unlikely that after the earlier negotiations as to the July debt [NAME_1] would have left Crown on 5 October, with a substantial credit balance in his favour, without making arrangements with Crown as to what should happen to that balance. Whatever be the truth as to the real wealth of [NAME_1], there is nothing in the evidence to indicate that he did not carefully guard his financial interests away from the gaming tables. I am satisfied that he left well knowing that he owed the balance of the July debt to Crown. The letter which he wrote on 11 October 2000 was disingenuous. 57 I should add that, in my judgment, [NAME_1] was prepared to consciously tailor his evidence in order to advance his case. His exaggeration of his difficulties with English is a case in point. My impression was that he regarded bargaining with a foreign [NAME_3] as fair game. His approach to payment of the July debt is an illustration. This impression was reinforced by observing him giving evidence although, as he gave evidence through an interpreter and comes from a different culture, this is not of critical importance. 58 I recognise the possibility that [NAME_14] and [NAME_10] may have conspired to set up [NAME_1] and that some of the Crown employees, including [NAME_12], [NAME_12] and [NAME_12], were parties to the conspiracy. The possibility that a wealthy gambler might be defrauded at a [NAME_3] is by no means fanciful. I note from internal Crown records that [NAME_12] was heavily involved in organising the trip for [NAME_14], that [NAME_12] and [NAME_12] accompanied [NAME_14] and [NAME_10] to golf before the arrival of [NAME_1], and that [NAME_12] and [NAME_12] were involved in the provision of credit to [NAME_14] before the arrival of and after the departure of [NAME_1], which was never recovered. It is also possible that [NAME_12] may have been duped into unwittingly taking advantage of [NAME_1]'s relatively poor command of English. However, such a case was not sought to be made on [NAME_1]'s behalf in evidence (including cross examination) or in final address. 59 I also recognise the possibility that the Crown employees and [NAME_1] simply misunderstood each other due to language and other difficulties as submitted by counsel for [NAME_1]. However, this is contrary to the evidence of each side. At least one of the Crown employees ([NAME_12]) spoke Mandarin, and the other Crown employees were well accustomed to dealing with Chinese patrons. None of the witnesses indicated any real uncertainty about what occurred. 60 I also recognise that prevention of fraud is a purpose of requiring a signature to be obtained for a transaction such as that in issue. A signature, particularly if verified in a manner which would establish understanding of the language of the document, would go a long way towards preventing the kind of dispute which has occurred here. Failure to obtain the signatures breached Crown procedures which were apparently required by the regulatory regime. It is tempting to rely upon the objective lack of signatures to resolve an issue which otherwise depends wholly upon hotly disputed oral evidence, where the probabilities are by no means all one way, where not all witnesses were called and where neither the gambling milieu nor Chinese culture are matters of judicial notice. It is difficult to feel much sympathy for Crown when such a fundamental precaution was omitted. However, I do not think that I can avoid coming to a view as to the credibility of the witnesses. On balance, I prefer the evidence of the Crown witnesses, for reasons I have endeavoured to explain. It follows that [NAME_1] authorised the appropriation of $2,200,000 from his account to that of the [NAME_10]. 61 The claim by [NAME_1] that Crown owes him any sum fails. The counter claim by Crown for the balance of the July debt succeeds. Following concessions during the hearing, the only other cause of action which requires consideration is the claim by [NAME_1] for defamation based upon the publication by [NAME_21] of Crown to [COMPANY_22] in Las Vegas, Nevada, on 16 October 2000 (Melbourne time) of the allegation that [NAME_1] was a [NAME_3] ("[NAME_3]") in that $1,338,992 was due and unpaid, and the subsequent republication by [COMPANY_22] and others of the allegation. 62 It is accepted that truth is a defence to defamation in all relevant jurisdictions. It is submitted for [NAME_1] that, even if his principal case is rejected, the listing with [COMPANY_22] was premature and no amount was then due and unpaid. The amount was only payable on demand and no demand had been made by 16 October 2000. 63 Reference is made to the following terms and conditions contained in the initial credit facility granted to [NAME_1] in February 2000: 'I hereby authorise [COMPANY_2] ("Crown"), in its sole discretion, to apply any and all gaming chips I may redeem and/or any funds held in other accounts with Crown first to the reduction of my outstanding credit facility, with the remainder, if any, to be returned to me. I authorise Crown to seek access from its Bankers to Banker's Options containing any personal information about me including information about my consumer or commercial credit worthiness, credit history, credit standing or credit capacity and I appoint Crown as my agent for this purpose and authorise its Bankers to provide that information. If required Crown may forward this acknowledgment to its Bankers. I also acknowledge that Crown may exchange personal information about me with other [NAME_3] operators. This credit facility is governed by the laws of Victoria, Australia. I hereby agree that I will repay my full debt to [COMPANY_2] in respect of the credit facility within 20 days from the date of issuance of the marker [?] settlement.' 64 There appears to be no similar document in evidence in relation to July or October 2000. The evidence of the Crown witnesses was consistent with a twenty day period of grace applying. This does not support the necessity for a demand. However, it was argued that when funds were forwarded to Crown on account of [NAME_1] on 3 and 4 October 2000 in excess of the July indebtedness, that there was a credit balance on [NAME_1]'s account – in other words, the July debt was extinguished. Thus, listing on 16 October was within the twenty days period of grace and so premature. 65 I agree with counsel for Crown that this is not a correct analysis of what occurred. The monies were not forwarded with an instruction from [NAME_1] that they should be appropriated in part to satisfaction of the July debt. His authority would be required before such appropriation could take place. The only authority given by him to [NAME_12] on 4 October was for the satisfaction of part of the July debt, leaving the balance unpaid. [NAME_1]'s letter of 11 October 2000 is inconsistent with any general satisfaction of the July debt by the remittances on 3 and 4 October. The Crown documents which were created on 4 October mirror this understanding. The monies were placed to the credit of a deposit account, which was a kind of suspense or escrow account, and then appropriated from that account to (inter alia) part satisfaction of the July debt. Thus, the sum of $1,338,992 was, and had been for some time, due and payable but unpaid on 16 October 2000. The defence of truth is thus established, and the claim for defamation fails. 66 Absent any special factors, I would be disposed to order that the applicant pay the costs of the respondent, but I will stand the matter over to enable that question to be argued if necessary, and for short minutes to be brought in to give effect to these reasons. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles .

Associate: Dated: 23 May 2003

Counsel for the Applicant: [redacted]

Solicitor for the Applicant: [redacted]

Counsel for the Respondent: [redacted]

Solicitor for the Respondent: [redacted]

Date of Hearing: 23, 24, 25, 26, 27 September 2002; 2, 3, 4, 5, 11, 12, 13 December 2002

Date of Judgment: 23 May 2003