Hillside (New Media) Ltd v Bjarte Baasland and Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE ANDREW SMITH |
| Judgment Date | 20 December 2010 |
| Neutral Citation | [2010] EWHC 3336 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2009 FOLIO 270 |
| Date | 20 December 2010 |
[2010] EWHC 3336 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Before: Mr Justice Andrew Smith
Case No: 2009 FOLIO 270
Bajul Shah (instructed by S.J. Berwin) for the Claimants
Hearing dates: 10 December 2010
MR JUSTICE ANDREW SMITH:
The claimants in these proceedings, Hillside (New Media) Limited, (“Hillside”), an English company and subsidiary of bet365 Group Limited, apply for summary judgment upon their claim for a negative declaration against the first defendant, Mr Bjarte Baasland, a Norwegian. The wording of the declaration that they now seek, as formulated after exchanges at the hearing, is in these terms:
“The Claimant is not liable to the First Defendant or his assignees or any person claiming through or under him in tort or otherwise, for any loss or damage that the First Defendant may have suffered by reason of or arising out of his activities as a customer of the Claimant between January 2005 and August 2008 and/or placing bets or wagers with the Claimant and/or placing any bets or wagers on the website www.bet365. com”
Hillside and other companies in the group, including the second defendants, Bet 365 International NV (“Bet 365 NV”), a company incorporated in the Netherlands Antilles, and the third defendants, Hillside (Gibraltar) Limited (“Hillside Gibraltar”), a Gibraltar company, provide facilities for online gambling through a website to which I refer as the “bet 365 website”. The website is owned by Hillside and operated by them through servers in England. Hillside's premises and staff operations are also in England. The website is licensed for use by Bet 365 NV and Hillside Gibraltar. The staff operations and servers of Bet 365 NV are, or at least were at the relevant time, in the Netherland Antilles, and those of Hillside Gibraltar are in Gibraltar.
Three kinds of bets can be placed through the bet 365 website: (i) bets on sporting events (“sports bets”); (ii) bets on games of chance, such as poker, blackjack and baccarat (“casino bets”); and (iii) bets on fixed-odds games of chance, such as Keno, Hi-Lo and “Heads or Tails” (“games bets”).
Before 1 September 2007 sports bets and games bets that were placed through the bet 365 website were processed by Hillside, and those by way of casino gambling were processed by Bet 365 NV. When on 1 September 2007 the Gambling Act 2005 came into force, the Bet 365 group re-organised the business. The business of Bet 365 NV was transferred to Hillside Gibraltar under an asset purchase agreement dated 31 August 2007. Thereafter casino gambling and games bets have been processed by Hillside Gibraltar. Hillside continues to process sports bets.
Mr Baasland placed bets through the bet 365 website between 2005 and 2008. He had two accounts. He opened an account for gambling in Norwegian kroners on 20 January 2005 and an account for gambling in US dollars on 26 August 2005. He placed over 5,000 sports bets, and his net loss from them was nearly 15 million kroners and nearly $220,000, in total the equivalent of about £1.5 million. He placed some 220,000 bets upon casino gambling, and his net loss from them was some 11.8 million kroners and nearly $350,000, in total the equivalent of over £1.4 million. Initially he bet through the website from Norway From about August 2005 most of his bets were placed from Germany, although some were placed from Norway and the Czech Republic and, on one occasion, from Denmark.
In a series of emails between 22 and 26 August 2008 to Hillside, Mr Baasland stated that he had gambled away money that friends and family had lent to his parents, apparently for investment, and he needed to repay “30 million”. He pressed Hillside and another on-line gambling business called Centrebet, with whom also apparently he had gambled, to “take responsibility” and contribute to his losses so as to avoid unfavourable publicity. He referred to his “gambling problems”. Hillside and the Bet 365 group paid nothing to Mr Baasland. On 7 November 2008 his Norwegian lawyers, Advokatfirmaet Steenstrup Stordrange DA, (“Steenstrup Stordrange”), wrote to “Bet365” a letter headed “Notice of forthcoming litigation”, and threatened to institute legal proceedings unless their demands were met within 14 days. They asserted a claim in respect of Mr Baasland's “financial loss”, and contended that it was justiciable in the Norwegian courts and governed by Norwegian law. They argued, in brief summary, that there was liability (i) in negligence, on the basis that there “could have [been] effectuated and implemented general control measures, inspections, warnings or probes to locate this type of player”, and (ii) on the basis of “non-statutory rules regarding strict liability” because the damage to Mr Baasland was “constant, typical and extraordinary”. Hillside rejected the claim.
Mr Baasland did not, as far as appears from the material before me, bring proceedings against Hillside in Norway or elsewhere. On 2 March 2009 Hillside issued these proceedings and they were served on Mr Baasland on 30 April 2009 under the Hague Convention. His acknowledgment of service dated 18 May 2009 gave as an address for service the offices of Messrs Andrew Jackson, English solicitors, and indicated his intention to dispute the jurisdiction of this court. He did dispute it but not by any proper application notice, but on 25 May 2009 his Norwegian lawyers sent to the court submissions about the court's jurisdiction, together with supporting documents. The court directed an oral hearing, but Mr Baasland took no steps to arrange one. On 24 February 2010, the court dismissed Mr Baasland's challenge on jurisdiction. Hillside served particulars of claim on Mr Baasland on 14 May 2010, but Mr Baasland has not served a defence. Hillside applied for summary judgment on 10 November 2010. Mr Baasland did not serve evidence in response to it. Shortly before the hearing before me, Messrs Andrew Jackson applied for and obtained an order that they be removed from the record. Mr Baasland did not appear and was not represented at the hearing before me.
I first describe the process whereby gamblers, such as Mr Baasland, can obtain access to the facilities on the bet 365 website and use them to place bets. They must first apply successfully to open an account. The procedure for doing so is described in a statement dated 10 November 2010 made by Mr John Coates, Hillside's Chief Executive Officer.
Mr Baasland opened his accounts by applying for them online. There are versions of the website in different languages, including English and Norwegian. It is not in evidence which version was used by Mr Baasland when he opened his two accounts.
The website requires applicants to provide certain details about themselves, including an address. It appears likely that Mr Baasland provided an address in Norway. The applicant is also obliged to tick a box stating “I accept bet 365's terms, conditions, rules and privacy statement” (to which I shall refer as the “Rules”). When he does so, he can click on a hyperlink to display the Rules, and the Rules are also available through the website's “help” facility.
The current version of the Rules include the following provision:
“All sport wagers made with bet 365 are considered to be placed and received in the UK and all Conditions shall be governed by the laws of England and you irrevocably submit to the exclusive jurisdiction of the courts of England. All gaming with bet 365 is considered to be placed and received in Gibraltar and all Conditions are governed by the laws of Gibraltar and you irrevocably submit to the exclusive jurisdiction of the courts of Gibraltar.”
The expression “gaming” covers casino and games bets.
As I have said, when Mr Baasland opened his accounts in 2005, casino bets were processed by Bet 365 NV in the Netherlands Antilles, and Hillside Gibraltar were not yet handling any bets. The Rules then included a provision which was broadly similar to that which I have set out, but which stated that the laws of the Netherlands Antilles governed casino gambling and provided that the customer submitted to the exclusive jurisdiction of the courts of the Netherlands Antilles in relation to it. The precise wording of the earlier provision is not in evidence. Mr Coates explained that Hillside have been unable to find it.
The Rules also state, and, as I infer, stated when Mr Baasland became a customer, that
i) “By registering the customer is deemed to have accepted and understood all rules, terms and conditions displayed on the website by bet 365”.
ii) Bets are accepted only online or by telephone.
iii) Any bet may be declined in part or whole.
When customers are registered, they are given a telephone number in the United Kingdom that they can call for assistance.
A customer whose application has been accepted can place bets only after money has been deposited through the website into a “wallet” for his account from which stakes are paid. The customer's “wallet” has separate sections, including, for example, a “sports bets” section holding funds for placing sports bets with Hillside and a casino bets section for casino gambling. Money deposited by a customer in the wallet may be used for bets appropriate to the section of the wallet to which it is allocated, or may be transferred by him to another section of the wallet, or may simply be withdrawn by him.
The funds so held are deposited in accounts at a branch of the Royal Bank of Scotland (“RBS”) in Birmingham. As I understand it, funds held in the sports bets sections of the wallets are held in an account in Hillside's name and...
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