C.H.T. Ltd v Ward

JurisdictionEngland & Wales
CourtCourt of Appeal
JudgeLORD JUSTICE DAVIES,LORD JUSTICE SELLERS
Judgment Date07 Nov 1963
Judgment citation (vLex)[1963] EWCA Civ J1107-1

[1963] EWCA Civ J1107-1

In The Supreme Court of Judicature

Court of Appeal

(From Mr. Justice Lawton – Middlesex)

Before:

Lord Justice Sellers

Lord Justice Danckwerts And

Lord Justice Davies

C.H.T. Limited
and
J. Ward (Married Woman)

Mr. MARK LITTMAN, Q.C. and Mr. W.R. REES-DAVIES (instructed by Messrs. Coward, Chance & Co.) appeared on behalf of the Appellants (Plaintiffs).

Mr. LEWIS HAWSER, Q.C. and Mr. A.R. VANDERMEER (instructed by Messrs. Routh, Stacey & Co.) appeared on behalf of the Respondent (Defendant).

LORD JUSTICE DAVIES
1

This is the judgment of the court, including, of course, Lord Justice Danckwerts, who is sitting this morning in another court.

2

The defence was a twofold one. First, it was said that under the Gaming Acts, 1710 and 1835, money knowingly lent for gaming is irrecoverable, even though the gaming is lawful, as, by reason of the Betting and Gaming Act, 1960, that with which this case is concerned admittedly was. Second, it was submitted that the reality of the transaction was not a loan by the plaintiffs to the defendant to enable her to engage in gaming but a payment by the plaintiffs of the defendant's gaming losses; and that by reason of the Gaming Act, 1892, section 1, any promise express or implied by the defendant to repay to the plaintiffs any sum so paid by them was null and void.

3

Both points were argued before the learned judge; but he decided the case solely upon the second one. He expressed no opinion upon the question of the enforceability of loans made for gaming; for, on the view which he took of the case, that point did not arise for decision.

4

No evidence was given at the hearing. The parties agreed a statement of facts, together with a supplemental statement, to which were annexed a copy of the club rules and a copy of the account between the plaintiffs and the defendant.

5

In essence the facts appear tobe these. The defendant, as a member of the club, is entitled to obtain chips on creditfrom the club for the purpose of playing poker thereat. She is then debited with the equivalent value of these chips in the club's books. The chips can, if so desired, be used for the purpose of buying food and drink in the club; but such use is small and incidental; and unquestionably the main purpose of the issue of these chips is gaming, it being obviously more convenient that chips should be used rather than actual cash. By Rule 2 of the club's bye-laws "There shall be weekly settlements of all card accounts and the period of such account shall "be from Tuesday to the following Monday inclusive; a member's "card account shall be rendered to him upon the Tuesday following the Monday concluding the card account week and no member 'fehall play unless and until every prior card account is fully "Settled".

6

At the end of a session a member normally hands over to the cashier any chips in his possession, and his account is then credited with the face value of such chips. A winner may, if he chooses, receive cash from the club instead of having his winnings credited to his account.

7

The account between the parties shows that on a number of occasions between January and June, 1961, the defendant played poker at the club, winning on some occasions and losing on more. Why her account was allowed to run on and why she was permitted to play in default of weekly settlements does not appear. At the end of this period the account shows her to be indebted to the club In the amount claimed, namely £196. 14s. 2d., all of which, except for a sum of £1 called "Big Poker Fine", a kind of late table money, and sums of 30s. Od. table money deducted from the chips issued to her on each occasion, represents poker losses.

8

The total amount of these table monies would appear to be £26. 10s. Od. It may be that the plaintiffs might in any event have been able to recover that sum. But the point was not taken before us or, apparently, before the learned judge, and at no time did the plaintiffs ask for judgment for that amount.

9

It is implicit on the agreed facts of this case - though there is no express statement to that effect - that the club has paid out these losses to the winners, as indeed by the rules of the club they were bound to do.

10

The learned judge in effect took the view that the reality of the position was that the parties agreed that with the chips issued to her the defendant could take part in lawful gaming on the terms that if she lost they would pay her losses up to the amount of the chips issued to her and she would repay them weekly. She did lose and the plaintiffs did pay her losses. And the plaintiffs were seeking in the action to recover these losses from her. This claim, he held, following a decision of Mr, Justice Macnaghten in Woolf v. Freeman (1937 1 All England Reports page 178), was, by reason of the Gaming Act, 1892, not maintainable.

11

The Act of 1892 provides as follows. Section 1: "Any promise, express or implied, to pay any person any sum of money paid by him under or in respect of any contract or agreement rendered null and void by the Gaming Act, 1845…. shall be null and void, and no action shall be brought or maintained to recover any such sum of money".

12

It is admitted that, despite the fact that the poker played at Crockford's was lawful, the actual gaming contracts made on each hand between the poker players were null and void under section 18 of the Gaming Act, 1845.

13

The Act of 1892 was, it appears, passed to undo the effect of the criticised decision of this court in Read v. Anderson (1884) 13 Queen's Bench page 779, where a commission agent was held entitled to recover a lost bet from his principal, despite the 1845 Act.

14

In Tatem v. Reeve (1893 1 Queen's Bench page 44), the Act was applied in a case where a plaintiff who had been no party to the bets paid the defendant's betting losses to the winners at the request of the defendant. It was held that such payments by the plaintiff were payments in respect of betting transactions.

15

I agree", said Lord Chief Justice Coleridge at page 47, "that they were not paid 'under' such a contract or agreement, because there was no contract of betting or gaming between the plaintiff and the defendant; but the money was paid in respect of gaming debts which the defendant owed to the persons to whom the plaintiff paid it, and it was paid in order to discharge these debts".

16

The real question for decision on this part of the case can be formulated as follows:

17

As a part of the arrangement between the parties and in the events which have happened was there a promise express or implied by the defendant to pay to the plaintiffs any sum of money paid by the plaintiffs under or in respect of a gaming contract?

18

The main contention for the plaintiffs, put in various ways, was that the issue of the chips to the defendant was equivalent to a loan of money. The chips, it was said, were private currency. Any losses were paid at the table in such currency, and the defendant's promise to pay the plaintiffs was not a promise to repay any payment made by the plaintiffs to winners but was a promise to return the chips to the plaintiffs and to settle in account for cash any shortfall. And this promise, it is said, arose at the time when each batch of chips was taken by the defendant.

19

It is impossible to accept this analysis of the situation. People do not game in order to win chips. They game in order to win money. The chips are not money or money's-worth. They are mere counters or symbols used for the convenience of all concerned in the gaming. If actual money were lent to the defendant in order to game and the game were played for cash, the defendant would pay her own losses in cash and the plaintiffs would be under no obligation to pay anything to the winners. Conversely, it is to be observed that if the defendant paid actual cash to the plaintiffs on taking delivery of chips, the defendant would be under no obligation thereafter to pay anything to theplaintiffs, though, of course, the plaintiffs would be bound to pay cash to the winners redeem the chips.

20

Mr. Rees-Davies in his interesting exegesis of the Gaming Acts pointed out with force that one of the prime objects aimed at by the Legislature, from the statute of 16 Charles II chapter 7 onwards, was the discouragement or prevention of gaming on credit. And, though the fact is by no means decisive of this case, which depends upon a strict interpretation of the statute of 1892 and its application to the facts, the system in vogue at Crockford's is plainly designed to promote credit gaming.

21

In our judgment the learned judge was right in his conclusion. The system as a whole was one under which the winners were to look to the club for their cash winnings and the losers were to reimburse the club for their losses. Not only was that the system in general, but winners have the right to be paid out in cash at the end of each session, while losers do not have to pay until the weekly settlement date. Moreover, in this particular case it is to be supposed that those who won from the defendant in the first six months of 1961 received their money from the plaintiffs long before the issue of the writ. As Mr. Hawser pertinently observed in argument, "If the plaintiffs did "not pay the winners, who did?".

22

A somewhat separate point was taken by Kr. Littman for the plaintiffs. He argued that if, contrary to his contention, a payment was made by the plaintiffs to the winners, it was not a payment "in respect of" a gaming transaction. This proposition is quite untenable. The whole system was devised in order to facilitate - perfectly lawful - gainings and the payment to the winners by the plaintiffs of the losses of the losers, with the plaintiffs' right to be paid by the losers, was an integral part of the whole system. The payments made by the club were clearly "in respect of"...

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