Aspinall's Club Ltd v Al-Zayat
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lloyd,Lord Justice Sedley |
| Judgment Date | 19 October 2007 |
| Neutral Citation | [2007] EWCA Civ 1001 |
| Date | 19 October 2007 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3 2007/0602 |
[2007] EWCA Civ 1001
[2007] EWHC 362 (Comm)
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
MR JUSTICE DAVID STEEL
Sir Anthony Clarke, Mr
Lord Justice Sedley and
Lord Justice Lloyd
Case No: A3 2007/0602
David Lord (instructed by Quastels Avery Midgen) for the Appellant
Patrick Goodall (instructed by Beachcroft LLP) for the Respondent
Hearing date: 2 October 2007
Judgement
By this appeal the Defendant challenges an order of David Steel J giving summary judgment in favour of the Claimant on a cheque for £2 million drawn by the Defendant, which represents sums staked and lost by the Defendant in the course of gambling at the Club operated by the Claimant on the night of Friday 10 March 2000. The Defendant contends that either at the time the cheque was drawn and handed over to the Claimant, or thereafter, or both, the Claimant infringed the prohibitions in section 16 of the Gaming Act 1968 on the provision of credit for gaming, and that for this reason the sum which would otherwise be due on the cheque is not recoverable. At this stage he contends that he has, at least, a real prospect of succeeding in that defence to the claim, and that therefore the judge was wrong to give judgment under Part 24 against him.
The facts
The Defendant had been a member of the Club since 1994, and had gambled frequently, and on a large scale, since then, as he continued to do until April 2006. In the course of these twelve years he lost over £23 million. His loss on the night of 10 March was the largest that he suffered in a single gaming session.
During that session the Defendant drew four successive cheques of £500,000 each in exchange for gaming tokens. These were referred to as script cheques; another name is house cheques. They were written on blank cheque forms held by the Claimant, so that all details had to be handwritten: the bank on which they were drawn, the relevant branch, the account number, the name of the account holder, as well as the date, the identity of the payee and the amount of the cheque. No doubt the Claimant was only prepared to proceed in this way because it had good reason to suppose, from past dealings, that the Defendant did have an account, with the given number, at the relevant branch of the bank named on the cheque.
In the course of the gaming session the Defendant lost all the £2 million worth of gaming tokens that he had acquired in return for these four cheques. According to his Defence, he requested that the croupier be changed several times during the session, and although he was told on each occasion that there was no other croupier available, at 3.30 am he discovered that other croupiers were available. His case is that he became angry at this discovery, and requested the return of the four script cheques, contending that he ought not to have to pay the £2 million which they represented. That contention on his part (to which, of course, the Claimant did not accede) is identified in the Defence as “the Dispute”. He then alleges that an employee of the Claimant brought to him a pre-printed cheque drawn on an account of his, filled out in the amount of £2 million in favour of the Claimant, but not dated. The Defendant did sign that cheque, and received the four script cheques back in return, but he contends that, before signing it, he pointed out that it was not dated, and said he would only sign it on the understanding that it would not be dated and nothing would be added to it, and it would not be presented, unless the Dispute was resolved. It is alleged that the employee of the Claimant accepted the cheque from him, saying nothing to disagree with the Defendant's assertion as to the basis on which he had signed it, and then returned the four script cheques to him. By implication, it is said, the Claimant thereby agreed to his stipulation as to what should (or rather should not) happen to the cheque.
Those facts are the basis of the Defendant's first line of defence, which is that the Claimant provided credit to him in a way which is inconsistent with section 16 of the 1968 Act, when it accepted the substitute cheque from him and returned the four script cheques to him.
Later on 11 March the Defendant countermanded the cheque, and he also sent a fax to the Claimant, in which he said:
“Please accept this fax as official notification not to present the cheque till justification is made to me about what happened, especially the cheque was presented to me without date as I explained to dereck clearly. Amount will not be paid till the money is justified.”
For its part, on Tuesday 14 March the Claimant caused the cheque to be presented, by which time it bore the date 10 March. It was not paid, because of the Defendant's orders not to pay.
The present claim was brought only three days before the end of the 6 year limitation period for a claim on the cheque. During much of that time the Claimant permitted the Defendant to continue gambling at its club, though always requiring payment in cash or on a third party's account, so as not to do anything which might amount to providing him with credit directly for the purpose of the continued gaming. During this period he lost more than a further £10 million. In February 2002 the Claimant wrote to the Defendant referring to discussions which had taken place a year before about the £2 million debt. Mr Osborne, managing director of the Claimant, said in the letter that at that earlier meeting the Defendant had “asked us to allow you one year, during which time you would continue to play here and would make repayments from winnings”. He said that this had not happened, with no payments, few visits and none recently. He asked for a repayment schedule.
In his witness statement, Mr Osborne referred at paragraph 18.5.1 to the discussions in 2001 and to his letter, and said that the Defendant had continued to gamble at the club and had made winnings, but had not paid any part of the £2 million debt. He went on to say, in paragraph 18.5.2:
“The Club took the view that it was in its interests, in terms of ultimately obtaining payment of the outstanding debt, to seek to maintain contact with [the Defendant] and to allow him to continue gambling at the club after 10 March 2000 in the hope that he would repay the outstanding debt. The decision to permit him to gamble at the club was taken in that light.”
The Defendant in his witness statement denies ever discussing payment of the whole amount of the cheque, accepting only that there were some discussions about his paying half of it. He said in paragraph 31:
“[Mr Osborne] was more keen to ensure that I kept coming to the Club than reaching some agreement in relation to the £2 million. Indeed on a number of occasions our discussions would end with him saying words to the effect of “forget about it and keep coming”.”
The Defence as it stands does not set up a clear ground of illegality based on the events since 10 March 2000, but Mr Lord has put forward a draft Amended Defence in which the point is taken that the Claimant's conduct since 10 March 2000, and in particular the agreement to allow the Defendant to continue gaming at the club, with no steps being taken for the time being to recover the £2 million, amounted to a breach of section 16 of the 1968 Act. In addition, to the extent that the Claimant relies, as an alternative to a claim on the cheque, on a claim on the underlying loan agreement, the Defendant seeks to contend that the loan agreements are null and void under the Gaming Act 1892.
The Gaming Act 1968
The central point in the case turns on part of section 16 of the Gaming Act 1968, as it was in March 2000. The 1968 Act has since been repealed but this does not affect the present proceedings.
“16. Provision of Credit for Gaming
(1) Subject to subsections (2) to (2A) of this section, where gaming to which this Part of this Act applies takes place on premises in respect of which a licence under this Act is for the time being in force, neither the holder of the licence nor any person acting on his behalf or under any arrangement with him shall make any loan or otherwise provide or allow to any person any credit, or release, or discharge on another person's behalf, the whole or part of any debt,
(a) for enabling any person to take part in the gaming, or
(b) in respect of any losses incurred by any person in the gaming.
(2) Neither the holder of the licence nor any person acting on his behalf or under any arrangement with him shall accept a cheque and give in exchange for it cash or tokens for enabling any person to take part in the gaming unless the following conditions are fulfilled, that is to say
(a) the cheque is not a post-dated cheque, and
(b) it is exchanged for cash to an amount equal to the amount for which it is drawn, or is exchanged for tokens at the same rate as would apply if cash, to the amount for which the cheque is drawn, were given in exchange for them;
but, where those conditions are fulfilled, the giving of cash or tokens in exchange for a cheque shall not be taken to contravene subsection (1) of this section.
….
(2A) Neither the holder of a licence under this Act nor any person acting on his behalf or under any arrangement with him shall permit to be redeemed any cheque (not being a cheque which has been dishonoured) accepted in exchange for cash or tokens for enabling any person to take part in gaming to...
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Aspinall's Club Ltd v Al-Zayat
...of Appeal set that judgment aside having concluded that the Defendant had a real prospect of successfully defending the claim (see 2007 EWCA Civ 1001 per Sir Anthony Clarke MR, Sedley LJ and Lloyd LJ.) 4 The Defendant chose not to give evidence at the trial of the action. This meant that on......