Court dismisses lottery claim where exemption clauses on ticket back were not referenced on front.

[*381]1982 February 16

(MICHAELIDES, D.J.)

IN THE DISTRICT COURT OF LARNACA

Despina Demetriou,

Plaintiff,

v.

The Attorney-General of the Republic,

Defendant.

(Civil Action No.1927/80).

Act or

decision in the sense of Article 146 of the Constitution - Decision of Director of Lotteries rejecting claim for winning in a lottery in the exercise of his discretionary powers - An act or decision in the sense of the above Article which can be attacked by a recourse thereunder - Lotterles Law, Cap. and the Regulations made thereunder.

Contract - Exemption clauses - Printed at the back - Without any reference at the front side about their existence - Not binding.

Z. Mylonas, for the plaintiff.

M. Flourentzos, Counsel of the Republic, for the defendant.

JUDGMENT

The following judgment was delivered by:

MICHAELIDES D.J.: This is an action[*382]

for the recovery of an amount of £500.- which the plaintiff claims from the defendant as representing her winning in a lottery.

The facts:

It is the case for the plaintiff that in January 1980, on a visit to Larnaca, she bought a lottery. It has been produced and is Exhibit I before the Court. It is a special type of lottery known as "instant lottery" introduced by notification no. 1714, published in the Official Gazette of the Republic of the 2Tst September. 1979 under Regulation

5 of the Government Lotteries Regulations of 1956-1979 and the Lotteries Law, Cap. 74. The said notification has been produced and is Exhibit 4 before the Court.

The ticket bought by the plaintiff is a small piece of hard paper approximately 2x3 inches in size. The following words appear on its front in Greek and English.

"CYPRUS REPUBLIC. Win up to £1000 instantly. Gently remove covering from boxes. If same price amount appear in three boxes you win that price."

Then follows the signature of the Director of Lotteries and underneath there are six boxes covered with aluminium. On the lower left part there is a serial number. In the present case it was 001-1924-151.

On the rear side of the ticket there is a statement of the amounts which a person may win and beneath[*383]that, the following conditions appear again in Greek and English.

"Winning numbers of the instant lottery are not published. Payment will be made to persons presenting winning tickets within six months. No money can be refunded once a ticket has been sold. No correspondence will be entered into the case of lost tickets. Ticket void if stolen, misprinted, torn, defaced or defective in any other manner."

The plaintiff cleared the boxes and the following symbols and numbers appeared in three of the boxes.

Box I: "£ £500 £"

Box 2: "£500 m"

Box 3: "£ £500 £"

The plaintiff thought that she won. She went to the offices of the Director of Lotteries in Nicosia to collect her winnings. Unfortunately for her, back came the disappointment. The Director refused to pay. The reasons were given in a letter dated 9th January 1980, no.T.727/61/2 which was addressed by the Director to the plaintiff. It is Exhibit

2 before the Court. The important part of this letter is paragraph two which reads as follows:

"After a careful examination and a check made by electronic machinery it transpires that it does not[*384] win. Evidently the amount appearing in the second box of the first row is not £500 but 500 mils but due to a printing error it is printed with the pound symbol (£) at the begining and the symbol for mils in "the end 'm'. The plaintiff did not accept the above decision of the Director and instituted the present proceedings against the Republic".

The defendant called two witnesses. D.W.I was Mr, Ikaros Zachariades, a Senior Supervisor of Account at the Treasury, in charge of the Lotteries section. He explained fully the work carried out in his section and the various controls followed for checking each winning ticket. He added that only 9 numbers won £500.- in the lottery in question and that all of them have been produced and paid. The ticket of the plaintiff was not among them for the reason stated in the above-mentioned letter and also because the ticket has been rejected by a computer of the Government's Data Processing Services Department. Mr. Zachariades added that in rejecting the plaintiff's request for payment he relied on paragraphs (η) and (θ) of the notification. I shall be referring to the contents of the notification in general and of the said paragraphs in particular later on in, the judgment.

D. W.2, Mr, Eleftherios Samuel, a Senior Data Processing officer at the Data Processing Services Department of the government, testified that he carried out a check on the ticket in question and that the computer rejected it.[*385]

Findings

I have examined the evidence before me with great care. In my judgment the facts stated by both parties are correct . The sequence of events and the description of the ticket meet with the approval of both parties. The solution of the problem, however, rests with the analysis of the legal situation.

The law

S.2(1) of the Lotteries Law, Cap.

74 defines a lottery as "any scheme for distributing prices by lot or chance".

This definition is a reproduction of the common Law definition as mentioned in cases such as Taylor v.

Smetten (1883) II Q.B.D. 207 and Barclay v. Pearson (1893)

2 Ch. 154.

At common law a winner of a lottery can sue for his winnings, unless the contract under which he entered the lottery prevents him from so doing or unless it is not intended to enter into legal relationship at all. See Simpkins v. Pays (1955) 3 All E.R. p.10, 1 W.L.R. 975, Barclay v. Pearson (1893)2 Ch. 154, Hoddinot v. Hoddinot (1949) 2 K.B. 406.

It becomes, therefore, essential to consider in some detail the legal situation governing the lottery in question. The two documents which govern the lottery are notification made in the gazette under the Lotteries Regulation and the terms printed on the ticket.[*386]

A. The Notification.

The notification bears No. 1714 and was published in the main body of the. official gazette of the Republic of the 21.9.1979, ("Exhibit 4"). It was made under the provisions of Regulation 5 of the Government Lotteries Regulations which reads as follows:

"Before any lottery is drawn the Director of "lotteries shall cause to be published in the gazette, "and also, if he thinks fit in any other convenient "manner.

"(a) the date and time when and the place where the draw will take place,

"(b) the number of tickets issued by him for sale in respect of the lottery, their price and any other particular concering them, which he may deem it desirable to publish;

"(c) the number and value of the prices apportioned to the lottery and the place where and the hours during which payment of prices may be claimed."

In furtherance of the above provisions the said notification 1710 was published in the gazette. The relevant parts applicable to the facts of the present case are paragraphs (γ)(3)(η) & (θ).

Under paragraphs (γ) it is laid down that there must appear in three boxes the same number of symbols. if this happens the holder of the ticket win the amount shown.

Under paragraph (3) payment can be made to any person presenting a valid ticket. Paragraph (η) and (θ).

must be viewed in the light of the powers conferred under them, on the Director of Lotteries. Under paragraph (η) the Director of Lotteries may in the exercise of his discretionary powers refuse payment to the bearer of a ticket if any number, word, symbol, or letter,

is illegible, or is not distinctly legible, or has been crossed out or is falsified or is erased.

Under paragraph (θ) it becomes mandatory for the Director of lotteries not to effect payment for any ticket, if upon examination it is revealed that:

- it has signs of substantial operation due to deep scaping or,

- has been torn or

- has been stuck on or

- has been rejected by the electronic computer.

The decision of the Director on any of the above matter shall be final and conclusive.

In view of the above it becomes necessary to examine the reasons for which the Director of lotteries rejected the ticket. As I gather from the evidence two reasons are given. In the statement of Defence however the only reason given is that the . ticket was misprinted and illegible. In Exhibit 2 the defendant adds the rejection[*388]of the ticket by the electronic computer, a fact also related to the Court by witnesses Zachariades and Samuel.

The first

reason comes within the discretionary powers under paragraph (η) and the second reason, the rejection by the computer, within the

ambit of paragraph (0) of the notification. These facts, however, create a further legal problem. Is this court competent to examine the discretionary powers of the Director of Lotteries? The answer may be found if the nature of the notification is clarified. In my opinion it is covered by the definition of "public instrument" in sec. I of the Interpretation Act, Cap.I which is as follows:-

"public instrument' means any order, proclamation, regulations, rules, bye-laws notice or register made, issued or kept under the authority of any law."

In de Smith's "Judicial Review of Administrative Action, 4th. Edition, p. 76" the following are mentioned:

"…If departmental communications are issued in pursuance of statutory powers which authorise the Minister to confer rights, directly or indirectly on members of the public, and if the Minister does purport to confer such rights . . . the relevant provisions' will be recognised and enforced by the Courts; and to that extent those informal instruments may be characte-

"rised as having legislative effect as in Blackpool Corporation v. Lockes (1948) I.K.B. 399”

Consequently I would have no difficulty in[*389]holding as perfectly legal the decision of the Director exercised under paragraph (0) of the notification with which he refused to, pay , due to the rejection of the ticket by the computer, as it was mandatory, on the Director to do so.

Rejection of the ticket for being misprinted.

As already stated above the ticket was misprinted. In two of the three boxes there were three pound symbols. In the third box there was one pound symbol and the letter M.Nowhere in the regulations are these symbols described and no mention is made of the number of symbols required. Instead of the pound symbol it might have been an ancient monument or a tree. As shown on the ticket the pound symbol appears in all the three boxes. But what about the letter "M" and the additional pound symbols? How and why the Director of Lotteries came to the

conclusion that the amount shown is not £500 but 500 mils? It is clear that the Director had to exercise his discretion. As mentioned in de Smith's book referred to above at p. 278.

".... the legal concept of discretion implies power to make a choice between alternative causes of action. If only one course can lawfully be adopted the decision taken is not the exercise of a discretion but the performance of a duty. To say that somebody has a

"discretion presupposes that there is no uniquely right answer, to his problem. There may, however, be a number of answers that are wrong in law".

With the above in mind the next question to be[*390]considered is whether the decision of the Director falls in the domain of private or public Law. of

If the decision is one which regulates civil law rights then it may. be subjected to a review by the District

Court. If it falls within the domain of public law. Then this

decision can only be attacked by a recourse to the Supreme Court under Article Ih-6.I of the Constitution.

See Achilleas HadjiKyriacou v. Theologia HadjiApostolou and others (1962) 3 R.S.C.C.89 and Savvas Yianni Valana v.

The Republic (1962) 3 R.S.C.C. 91 at p. 93.

Professor Ernest Forsthoff, in his book entitled "The Administrative Act" defines at p. 11 an administrative act as one which" . . . . includes all unilateral authorive acts of an authority of public administration which have direct legal effect with the exception of legislative and judicial acts." In addition the acts in question should be of an executory nature. See Kolokassides v. The Republic (1965) 3 C.L.R. p. 542 at p.551 where Triantafyllides J. (as he then was) had this to say:

"An administrative act (and decision also) is only amenable within a competence such as of this Court under Art. 146, if it is executory (εκτελεστική) in other words it must be an act by means of which the 'will' of the administrative organ concerned has been made known in a given matter, an act which is aimed at producing a legal situation concerning

"the citizen affected and which entails its execution[*391]by administrative means. (See conclusions from the Jurisprudence of the Council of State in Greece 1929 - 1959 p. 236

- 237.).

In Cyprus Industrial and Mining Co. Ltd. (No.I) v. The Republic (1966) 3 C.L.R. 467 at p. 472 the following are mentioned:

"It is first of all necessary to bear in mind that once an act or decision emanates from an organ of administration then, as a rule it is an 'act' or 'decision' within the ambit of a revisional jurisdiction as the one laid down under Art. 146".

In the light of the above authorities I am of the view that the part of the director's

decision with which he rejected the plaintiff's claim under the provisions of the paragraph (h) of the notification in the exercise of his discretionary powers could only be attacked by a recourse to the Supreme Court, under Art. 146 of the Constitution. Consequently the plaintiff's claim under this head also fails for want of jurisdiction of this Court to adjudicate on it.

In normal circumstances that would be the end of the case. Certain peculiarities of the ticket, however, about which I shall refer below, make me examine the case under the law of contract. As it was mentioned by Vassiliades J. in Orhan Mehmet Emin v. Argyros Komiodromos and another

(1970) I C.L.R. 343 at p. 344 "it is for the trial Court to find the contract between the parties". The terms are on the Lottery ticket.[*392]

B.The Lottery ticket.

In s. 2(1) of the Lotteries Law Cap. 74 s.2(1) a ticket is defined as follows

"ticket" includes in relation to any lottery or proposed lottery any document evidencing the claim of a person to participate in the chances of the lottery.

A description of the ticket and of the terms appearing on its front and rear side have been given at the beginning of this judgment. It must be noted that the conditions printed in the front are those contained in paragraph (γ) of the notification. I repeat them:

"If same price amount appears in three boxes you win "that price". I have already made a finding that the question whether the same price amount appears in the boxes is not for this Court to decide.

At the back of the ticket the following conditions appear:

"Winning numbers of the instant lottery are not published. Payment will be made to persons presenting winning tickets within six months. No money can be refunded once a ticket has been sold. No correspondence will be entered into in the case of lost tickets, Tickets void if stolen, misprinted torn, defaced or defective in any other manner ".

Learned counsel for the plaintiff submitted that the whole matter rests on the law of contract and that the[*393]above mentioned terms are not binding on his client as not properly brought to her knowledge. Even the defendant, agrees with the plaintiff that the law of contract governs the situation .(See paragraph 3 and

4 of the Statement of Defence). In considering the case under this branch of the law I have also in mind that in the abovementioned terms on the rear side of the ticket there is a term not mentioned in any paragraph of the notification, i.e. that the ticket is void if stolen.

The matter of whether the terms printed at the back of a ticket are binding on a contracting party has been judicially considered in a big number of cases.

In Thornton v. L.M.&S.Rly (1930) I K.B. 41 it was held that it is for the Court as a matter of law to decide whether there is evidence for holding that the notice is reasonably sufficient. (See also Sugar v. L.M. &

S. Rly (1941) I All E.R. 172 and Thornton v. Shoe Lane Parking Ltd. (1971) 2 Q.B.163

In White v. Blackmore

(1972) 3 All E.R. 158 at p. 165 Lord Denning had these to say:

"Applying the ticket cases the question is whether reasonable notice was given of that condition. In my opinion it was not It is settled law that a ticket on its face must say, 'For conditions see back'. If it does not say it on the front it is not sufficient to put a condition at the back. This was decided by the House of[*394] Lords in Henderson v. Stevenson (1875) L.R.S. Sc. & Dic. 1470 and is so well settled that, Anson’s Law of Contract 23rd Edition (1969) pp. 146 and 147 says:

It is the practice for example always to refer "'on the face of the ticket to the fact that there are conditions printed at the back. If this is not done, then following the case of Henderson v. Steven son, the Courts have consistently held that such a notification is defective."

Applying the above to the facts of the present case and having in mind that the excluding terms are printed at the back in very small print and without any reference at the front side about the existence of terms at the back, I find that they are not binding on the plaintiff. The result however, does not help the plaintiff as the claim fails by applying the terms at the front of the ticket as explained above.

Before leaving this topic, however, I consider it necessary to make some further comments.

The phrase printed at the back in the form "ticket void if stolen, misprinted, torn, defaced or defective in any other manner" is ultra vires the notification.

With the exception of the provision regarding stolen tickets, the matter comes under either within the province of paragraph ( η ) or (θ) of the notification.[*395]

If e.g. the ticket is misprinted or in some way. defective, the holder may apply to the Director of Lotteries for payment and if he refuses to pay his decision may be attacked by a recourse to. the Supreme Court. Consequently the ticket is not void as written on the ticket. Citizens should not be misled as to their rights. If the ticket is e.g. torn then it comes under paragraph (0) and the Director has a duty to reject it

In the end:

Action dismissed.

With regard to costs, I have decided that each party should bear its own costs.

Action dismissed.

Each party to pay its own costs.