ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-14-4450-00
DATE: 2015 08 06
B E T W E E N:
Rajesh Kalra
Plaintiff
Self-Represented
- and -
Ontario Lottery and Gaming Corporation
Alcohol and Gaming Commission of Ontario
Falls Management Company
Penn National Gaming Inc.
Woodbine Entertainment Group
Nathaniel Read-Ellis, Counsel for the Defendants Ontario Lottery and Gaming Corporation, Falls Management Company, Penn National Gaming Inc., and Woodbine Entertainment Group
Domenic Polla, Counsel for the
Alcohol and Gaming Commission of Ontario
Defendants
HEARD: June 8, 2015
REASONS FOR JUDGMENT
Woollcombe J.
Introduction
[1] Rajesh Kalra, the plaintiff, has filed a statement of claim seeking damages from the Ontario Lottery and Gaming Corporation (”OLGC”), various casino operators and the Alcohol and Gaming Commission (“AGCO”).
[2] Broadly, it is the plaintiff’s allegation that the OLGC and casinos use advanced computer technology to fix games in the casinos and that there is non-disclosure of the fact that they are using computer technology to fix the results. The plaintiff also alleges that Falls Management Company (“FMC”) and Penn National Gaming Inc. (“PNG”) allowed him to be over-served alcohol in the casinos.
[3] As against the AGCO, it is alleged that there was a failure to regulate, monitor and ensure the fairness of games by allowing OLGC to operate and indulge in game fixing and deceiving players.
[4] By statement of claim issued September 30, 2014, the plaintiff seeks over $52,000,000.00 in damages against the various defendants.
[5] There are two separate motions before me. The defendants OLGC, FMC and PNG seek an order granting summary judgment dismissing the plaintiff’s claim against them. The defendant AGCO seeks an order striking out the plaintiff’s statement of claim against it.
[6] There are two main issues to be determined, one in relation to the OLGC and the casinos, and the other in relation to the ACGO. These issues are:
a. Should the defendant OLGC, FMC and PNC’s motion for summary judgment be granted? This turns on the following questions:
i. Is there a genuine issue for trial in relation to the plaintiff’s allegation of game fixing?
ii. Is there a genuine issue for trial in relation to the plaintiff’s allegation of a failure to disclose?
iii. Is there a genuine issue for trial in relation to the plaintiff’s claim of having been over-served alcohol?
b. Should the defendant AGCO motion to strike the plaintiff’s pleadings be granted?
The parties
[7] The OLGC is the Crown Agency of the Ontario government that is responsible for conducting and managing lottery games and casinos across Ontario. The OLGC retains operators to operate the four resort casinos in Ontario: Fallsview, Casino Niagara, Casino Rama, and Caesars Windsor. The OLGC operates community casinos at racetracks including Woodbine Racetrack.
[8] Although the statement of claim alleges that FMC operates Casino Niagara and Niagara Fallsview, FMC is in fact the sole general partner of Falls Management Group LP (“FMGLP”), which is the commercial operator of these two casinos.
[9] Although the statement of claim alleges that PNG operates Casino Rama, PNG does not operate Casino Rama. Casino Rama is operated by CHC Casinos Limited (“CHC Casinos”). CHC Casinos is in fact an indirect subsidiary of Penn National Gaming Inc. (“PNG”).
[10] The plaintiff’s claim is for damages suffered at Fallsview, Casino Niagara, Casino Rama and Woodbine Racetrack. These have been referred to in these proceedings, collectively, as the “casino operators’ facilities”.
[11] The claim against Woodbine Entertainment Group has been discontinued.
[12] The AGCO is a public regulatory body that regulates lottery schemes through the administration of the Gaming Control Act, 1992, S.O. 1992, c. 24.
A. Should the motion for summary judgment brought by the OLGC, FMC and PNG’s be granted?
The Legal Test on a Motion for Summary Judgment
[13] Under rule 20.04(2)(a), on a motion for summary judgment, the court must decide whether the moving party has established that there is “no genuine issue requiring a trial with respect to a claim or defence”. In Hryniak v. Maudlin, 2014 SCC 7, [2014] S.C.J. No. 7, the Supreme Court of Canada held that the court should first determine if there is a genuine issue requiring a trial based only on the evidence in the motion record. This is to be done by reviewing the trial record and determining if there is sufficient evidence to fairly and justly adjudicate the dispute. It is important to note that parties are expected to provide a complete evidentiary record for their cases on a summary judgment motion. The court is entitled to assume, absent clear explanation to the contrary, that the record on a summary judgment motion contains all the evidence the parties would present at trial (See: Actuate v. Symcor, 2015 ONSC 689 at para. 44).
[14] I point out at the outset that the plaintiff has adduced no evidence in response to the motion for summary judgment. He advises that he relies exclusively on his statement of claim and reply to the statements of defence.
Is there a genuine issue for trial in relation to the plaintiff’s allegation of game fixing?
The evidence on the motion
[15] The defendants OLGC, FMC and PNG have filed detailed material in response to the plaintiff’s allegation that the OLGC “indulged in game fixing by controlling and pre-determining results of certain games by using advanced computed technology, misleading and intentionally deceiving players by hiding and failing to disclose important risk information.”
[16] The affidavit evidence explains that although computer technology is used in the games in the casino operators’ facilities, the results are completely random and unpredictable and cannot be determined until a player initiates a particular game. There is extensive evidence about the way in which a random number generator (“RNG”) governs the random selection process that determines the outcome of every play on every electronic game at all of the facilities. I need not review that evidence in detail in these reasons.
[17] I will summarize the evidence in relation to automated games of roulette as these appear to be central to the plaintiff’s claim. Automated games of roulette use a RNG slightly differently to produce random game outcomes. These games use physical equipment such as the wheel and ball that is similar to the physical equipment at a table game. The randomness of the game outcome is ensured by randomly varying the speed at which the game is initiated based on the numbers generated by the RGN at the precise moment that the game is initiated by the player. The outcome is determined based on the numbered pocket in which the roulette ball stops after it physically spins around the roulette wheel. The material difference between the table game and the automated game is that the automated game is physically initiated using computer technology, rather than by a dealer. The numbers produced by the RNG are used indirectly to determine game results and are not mapped to correspond to a certain game symbol.
[18] The evidence explains that neither the OLGC, nor particular casinos, determine how the RNG operates. Rather, it is the AGCO that regulates lottery schemes through the administration of the Gaming Control Act, 1992 S.O. 1992, c. 24. This involves approving games that are used in the casinos in accordance with Electronic Gaming Minimal Technical Standards, approving the rules of play for every game at the casinos and conducting audits of the operation of games to ensure their compliance with applicable laws and regulations.
[19] There is significant evidence about the Standards that are required of games, the processes of testing that are used to ensure compliance with the Standards, the process of approval before games may be installed at a casino, and the ongoing inspection processes that are in place.
There is no genuine issue for trial
[20] The plaintiff’s claim that the games offered at the casino operators’ facilities are fixed and pre-determined in a manner that is not random is a bald allegation that is unsupported by any evidence. The evidence before me completely contradicts the assertion in the plaintiff’s statement of claim.
[21] By way of summary, having reviewed the unchallenged evidence before me, I find that the RNG continuously produces random numbers. Every possible number is mapped to correspond to a particular game symbol. When a player initiates a game, the game records the numbers generated by the RNG and the game equipment selects the corresponding game symbol and uses those symbols to generate the game outcome.
[22] As I understand the plaintiff’s position, it is that computer generated games, including roulette, are not truly games of chance because they are decided by a computer. Further, it is argued that there cannot be a truly random result if the casinos pay out at a rate of 85%.
[23] I have carefully reviewed the evidence adduced by the defendants. That uncontroverted evidence makes clear that the electronic games at the casinos have outcomes that are randomly and unpredictably generated based on the RNG. I find that the plaintiff’s claim that the games are not random is not supported by any evidence. The only evidence before me supports a conclusion that the plaintiff is mistaken.
[24] The casinos are able to select among payout options that have been pre-programmed by the games’ suppliers and pre-approved by the AGCO. This does not have any impact on the outcomes of the electronic games. I accept that both the casino operators’ facilities and the AGCO monitor the payouts of the electronic games on an ongoing basis to ensure that the games operate randomly and in accordance with the Standards.
[25] Setting aside the issue of whether the plaintiff has suffered any compensable damages, I conclude that his claim of game fixing against the OLGC, FMC and PNC raises no genuine issue requiring a trial.
Is there a genuine issue for trial in relation to the plaintiff’s allegation of a failure to disclose?
The Evidence on the Motion
[26] The defendants have provided affidavit evidence respecting the disclosure that is made by the OLGC to players to ensure that they have accurate information about games in the casinos.
[27] The OLGC publishes a brochure entitled “Slots – How to play” that describes how a RNG works in slot machines. The OLGC also produces fact sheets titled “Payout Levels of Slot Machines at OLG Gaming Facilities”. These explain that slot machines are run by computers and that each machine has a RNG. They also explains that the payout percentage and actual awards are predetermined for each game
There is no genuine issue for trial
[28] The plaintiff’s claim appears to be that the casino operators’ facilities are not in compliance with the Consumer Protection Act because they do not disclose to consumers the risk of playing games. Primarily, I understand this to be an argument that there should be disclosure of the fact that the games are not random and that results are computer generated. This claim really seems to piggy-back on the plaintiff’s claim that the games are not truly random, which, as I have found, is unsupported by the evidence.
[29] While s. 14 of the Consumer Protection Act prohibits the making of a “false, misleading or deceptive representation”, there is no evidence on this motion that the casino operators have made any representations that are false, misleading or deceptive.
[30] I find no genuine issue for trial arises from the plaintiff’s allegation about a failure to make appropriate disclosure.
Is there a genuine issue for trial in relation to the plaintiff’s claim of having been over-served alcohol?
The evidence on the motion
[31] The plaintiff’s claim about having been over-served is made only in respect of FMC at Fallsview Casino and Casino Niagara and in respect of PNG at Casino Rama.
[32] There is fairly detailed evidence about the steps that are taken by the casino operators to prevent the over-service of alcohol at the casinos. Intoxicated patrons are refused further service and are asked to leave. The casinos’ security departments prepare a report of any incident in which a patron of a casino appears intoxicated, or is refused service, or is required to leave the casino’s gaming floor, bar or restaurant.
[33] The casino operators have not located any reports supporting the plaintiff’s claims about being over-served alcohol in the casinos.
[34] In his submissions, the plaintiff asserted that he had witnesses who had accompanied him to the casinos and who could, presumably, offer evidence about him having been over-served. He claimed that he had not known that he could adduce evidence in response to the motions before me.
[35] I do not accept the plaintiff’s assertion that he was unaware of the need to adduce evidence and file material in response to the motion. The motion for summary judgment brought by the OLGC and casino operators’ facilities was before me on April 23, 2015. The plaintiff did not attend and telephoned the courthouse after the commencement of the motion to advise that he was ill and unable to be present. While I adjourned the motion, I ordered that the plaintiff was to file materials in response to it by May 22, 2015.
[36] In an email from the plaintiff to counsel for the OLGC and the casino operators’ facilities on May 21, 2015, the plaintiff indicated that he intended to rely on his statement of claim and reply in response to this motion. Counsel for the defendants responded on that it would be his clients’ position that the pleadings were not evidence and that the plaintiff was “required to submit evidence by way of affidavit or cross-examination”. Rule 20.02(2) was reproduced for the plaintiff in that response, and a link to the Rules of Civil Procedure was sent. When the plaintiff replied, suggesting that he would wish to cross-examine, counsel asked for a list of affiants the plaintiff wished to examine and the dates on which the plaintiff proposed to do so. An offer was made to consent to a reasonable extension of the plaintiff’s filing deadline. The plaintiff took no further steps to adduce evidence.
[37] I find that the plaintiff was put on notice of the need to adduce evidence in support of his argument opposing the granting of summary judgment against him. He has chosen not to do so.
There is no genuine issue for trial
[38] In seeking summary judgment in relation to this issue, the defendants argue, first, that there is no factual basis for a claim that the plaintiff was over-served alcohol and, second, that there was no breach of a standard of care or negligence.
[39] Knowing his obligation to do so, the plaintiff has adduced no evidence of ever being over-served alcohol. On this basis alone, I am prepared to conclude that there is no serious issue requiring trial relating to a claim of over-service.
[40] I need not, therefore, go on to consider the argument made by the defendants that there is no duty of care owed in respect of pure economic losses resulting from the over-service of alcohol. Nor do I need to consider whether, in this case, there was a breach of any standard of care. While these are interesting issues, they are best left for another day.
B. Should the motion brought by the AGCO to strike the plaintiff’s pleadings be granted?
The Legal Test for Striking Pleadings
[41] Under rule 21.01(1)(b), a claim may be dismissed if it discloses no reasonable cause of action. The moving party must show that it is “plain and obvious” that the plaintiff can not succeed in the claim. The threshold for success is high. The moving party must show either that the allegations in the statement of claim do not come within a recognized cause of action, or that the allegations in the statement of claim do not plead all of the elements necessary for a recognized cause of action. (See: Eliopoulos v. Ontario, 2006 37121 (ON CA), [2006] OJ No. 4400 (C.A.) at para. 8; Deep v. Ontario, [2004] OJ No. 2734 (S.C.J.) at paras. 32-35; aff’d [2005] O.J. No. 1294 (C.A.))
[42] Under rule 21.01(3), a defendant may move to have an action dismissed on the basis that it is “frivolous or vexatious or is otherwise an abuse of process.”
[43] Rule 25.11(b) permits a court to strike pleadings on the grounds that they are “scandalous, frivolous or vexatious”. A pleading that demonstrates a complete absence of material facts will be declared frivolous or vexatious. (See : Deep v. Ontario, supra at para. 40)
The Position of the AGCO
[44] The defendant AGCO filed no affidavit evidence in support of its motion as its motion is under rule 21.01(1)(b) and focuses on the legal adequacy of the claim.
[45] The ACGO position is that it is a public regulatory body that owes duties to the public at large and not to individuals. The plaintiff has not pleaded any basis for the imposition of a private law duty of care in relation to the plaintiff. The ACGO position is that the plaintiff’s claim does not disclose facts upon which a duty of care to the plaintiff could be imposed. The further argument is made that the claim fails to comply with the rules of pleadings and is frivolous, vexatious and an abuse of process.
Analysis
[46] As the AGCO points out, liability in negligence is predicated on the existence of a duty of care owed by a defendant to a plaintiff to take reasonable care in the circumstances. Whether a defendant owes a duty of care may be determined on a motion to strike pleadings. (See: Mitchell Estate v. Ontario, 2004 4044 (ON SCDC), [2004] OJ No. 3084 (C.A.) at para. 18).
[47] In Taylor v. Canada, 2012 ONCA 479, [2012] OJ No 3208 (C.A.), Justice Doherty, writing for a five member panel of the Court of Appeal, set out the test for determining whether a public authority owes a private law duty of care to an individual. Proximity is an important aspect of the duty of care inquiry. This concept describes a relationship between a plaintiff and defendant that is sufficiently close and direct to make it fair and reasonable for the defendant to be mindful of the plaintiff’s legitimate interests.
[48] In Taylor, the Court described a two stage approach to the duty of care inquiry. The first stage considers whether the relationship justifies a prime facie duty of care. At this stage, the court asks whether the claim advanced describes a relationship that is the same or analogous to a relationship that has been previously recognized as giving rise to a prime facie duty of care. If so, the analysis moves to the second stage. At the second stage, the court looks to broader residual concerns to negate the imposition of that duty.
[49] If a claim does not fall into an established or analogous category, and harm was reasonably foreseeable, the focus of the first stage of the analysis becomes on proximity. When a claim is advanced against a government regulator, the focus is on, firstly, the applicable legislative scheme and, secondly, any interactions between the regulator and plaintiff.
[50] The question of whether the AGCO owes a private law duty of care to an individual who participates in gaming activities in casinos was considered by the Court of Appeal in its decision in Moreira v. Ontario Lottery and Gaming Corp. 2013 ONCA 121. In that case, summary judgment was granted dismissing the plaintiffs’ actions against the Niagara Fallsview Casino Resort and the AGCO. The plaintiffs alleged that the casino had in place a “floating ball rule” that had not been approved by the AGCO, and which made the roulette games played by the plaintiffs illegal. The Court of Appeal found no merit in the claim for negligence against the AGCO. In upholding the decision of the motions judge to grant summary judgment dismissing the claims against the AGCO, the Court held, at paras. 111-112:
…the appellants' claims against the AGCO are similar to the numerous actions brought against statutory regulators, who owe a duty to the public at large, by members of the public who have allegedly been harmed by individuals or organizations whose conduct is overseen by the regulators.
In such cases, it has consistently been held by the Supreme Court of Canada and by this court that statutory regulators' public duties are incompatible with a private duty of care to individual members of the public, that there is no proximity in the relationship between such regulators and members of the public, and that public policy requires an immunization from a duty of care: [citations omitted].
[51] The Court of Appeal held that there is no existing or analogous duty of care owed by the AGCO to those who participate in gaming at casinos. No legal argument was advanced by the plaintiff to distinguish his claim from the claim in Moreira. I see no basis upon which to do so.
[52] Additionally, there are is an absence of evidence before me to establish that the harm suffered by the plaintiff was reasonably foreseeable as a consequence of the AGCO’s conduct. This is because there is nothing in the plaintiff’s pleadings setting out what the ACGO conduct was, or how it was causally linked to the plaintiff’s loss.
[53] On the basis of the material before me, and the applicable legal authorities, I conclude that the AGCO does not owe to the plaintiff any private law duty of care in this case. The plaintiff’s claim must therefore be struck for failing to plead a recognized cause of action as against the AGCO.
[54] The AGCO also seeks to strike the plaintiff’s pleading on the basis of rules 21.01(3)(d) and 25.11. As the AGCO correctly points out, the plaintiff offers bare allegations against the defendant and he pleads no materials facts in respect of what the AGCO is alleged to have done. The existence of a duty of care, a breach of that duty, and the consequential loss are not pleaded as against the AGCO. It is plain and obvious that no cause of action is disclosed.
Conclusion
[55] I have concluded that the motion for summary judgment brought by the OLGC and the casino operators’ facilities should be granted. I have also concluded that the ACGO’s motion to strike the plaintiff’s pleading as against them ought to be granted.
Costs
[56] At the conclusion of the oral hearing, counsel for the defendants submitted their Costs Outlines. Counsel for the OLGC and the casino operators’ facilities sought costs of $51,750.69 from the plaintiff, assessed on a partial indemnity basis. Counsel for the AGCO seeks costs of $2,430.00 from the plaintiff, also on a partial indemnity basis.
[57] Counsel for the successful defendants will have 7 days to make any further submissions in support of their costs in light of these reasons for judgment. Submissions are to be no more than three pages. The plaintiff, Mr. Kalra, shall have 14 days to respond with no more than three pages of submissions. There will be no reply without leave of the court.
Woollcombe J.
Date: August 6, 2015
COURT FILE NO.: CV-14-4450-00
DATE: 2015 08 06
SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN:
Rajesh Kalra
Plaintiff
-and-
Ontario Lottery and Gaming Corporation
Alcohol and Gaming Commission of Ontario
Falls Management Company
Penn National Gaming Inc.
Woodbine Entertainment Group
Defendants
REASONS FOR JUDGMENT
WOOLLCOMBE J.
DATE: August 6, 2015