Hillside (New Media) Ltd v Baasland [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Andrew Smith J |
| Judgment Date | 20 December 2010 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 20 December 2010 |
Queen's Bench Division (Commercial Court).
Andrew Smith J.
Bajul Shah (instructed by SJ Berwin) for the claimants.
The following cases were referred to in the judgment:
Bacon v Nacional Suiza Cia Seguros Y Reseguros SA [2010] EWHC 2017 (QB).
Calvert v William Hill Credit Ltd [2008] EWHC 454 (Ch).
Dumez France SA v Hessische LandesbankECAS (Case C-220/88) [1990] ECR I-49.
Handelskwekerij GJ Bier BV v Mines de Potasse d'Alsace SAECAS (Case 21/76) [1976] ECR 1735.
Homawoo v GMF Assurance SA [2010] EWHC 1941 (QB).
Lipkin Gorman v Karpnale LtdELR [1991] 2 AC 548.
Marinari v Lloyds Bank plcECAS (Case C-364/93) [1995] ECR I-2719.
Betting — Online gambling — Losses — Liability — Negative declaration — Norwegian defendant sustained large losses on internet gambling — Claimant company not liable for losses — Any non-contractual claim by gambler governed by English law and not by Norwegian law — Loss suffered when funds in online account used for gambling — Chose in action situated in England when reduced in value or exhausted — Debt situated where claimant and other group companies domiciled — Any tort manifestly more closely connected with England than any other country — English law governed contractual arrangements whereby bets placed — Under English law no real prospect of defendant establishing claim either in tort or contract — Claimant entitled to summary judgment — Private International Law (Miscellaneous Provisions) Act 1995, s. 11, 12 — Rome Convention, art. 4 — Regulation 864/2007 (Rome II Regulation), art. 4.
This was an application by the claimant English company, Hillside, for summary judgment on its claim for a negative declaration against the first defendant, B, a Norwegian national.
Hillside was part of the bet365 group. Hillside and other companies in the group, incorporated in the Netherlands Antilles and Gibraltar, provided facilities for online gambling through the bet365 website. On the website gamblers could bet on sporting events and play games of chance and fixed odds games. 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 the Netherlands Antilles company. When on 1 September 2007 the Gambling Act 2005 came into force, the bet365 group re-organised the business. Thereafter casino gambling and games bets had been processed in Gibraltar. Hillside continued to process sports bets. In order to gamble on the website it was necessary to register and open an account. Funds transferred to the online account were held by a bank in England.
B placed bets through the bet365 website between 2005 and 2008. Initially he placed bets 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. He made substantial losses and threatened proceedings in Norway on the basis that bet365 was liable in negligence for allowing him to use the facilities without appropriate warnings, safeguards and protections. No such proceedings were in fact brought.
Hillside then brought proceedings in England for a declaration that it was not liable to B and applied for summary judgment. Hillside submitted that the question whether it was liable to B was governed by English law, and under English law B had no claim against it for his financial losses.
Held, granting Hillside's application for summary judgment:
1. The question which law governed any claim by B in tort was to be determined in accordance with the rules in the Private International Law (Miscellaneous Provisions) Act 1995 and subsequently Regulation (EC) No 864/2007 (the Rome II Regulation). The application of the rules in the 1995 Act and of the regime in the Rome II Regulation both led to the conclusion that any non-contractual claim was governed by English law, and at the least that it was not governed by Norwegian law.
2. When B first transferred funds to his online account, he became a creditor in respect of the funds so deposited. He suffered loss only when he was allowed to use those funds to place unsuccessful bets. At that point the loss that he suffered was that the value of the chose in action represented by the funds in the account was reduced, if not exhausted. That chose in action was situated in England, or possibly in addition in Gibraltar and/or the Netherlands Antilles where the relevant companies were domiciled. What mattered was that there was no basis for an argument that any claim in tort or other non-contractual claim was governed wholly or partly by Norwegian law. In any event, English law would govern the claim in tort because any tort was manifestly more closely connected with England than any other country.
3. In respect of any contractual liability, under art. 4 of the Rome Convention, subject to any express choice of law made by the parties, a contract was generally governed by the law of the country with which it was most closely connected. Hillside was the party whose performance was characteristic of the contract, and the general rule in art. 4 would mean that the law of England governed the overall contract. There was no argument that under the general rule the contract was governed either wholly or in part by the law of Norway. The position was no different before the repeal on 1 September 2007 of s. 18 of the Gaming Act 1845 which rendered any contract between B and Hillside null and void, since that did not mean that B's loss was suffered in Norway rather than in England. Although B had no claim in debt for the sum in his online account, the damage that he suffered from placing losing bets was in England.
4. Under English law there was no real prospect of B establishing a claim either in tort or contract. There was no liability in negligence; nor could B establish a claim in contract because of an implied term in some contract with Hillside that it would protect him or take reasonable steps to do so, or upon any other contractual basis. (Calvert v William Hill Credit LtdUNK[2008] EWHC 454 (Ch) followed.)
Andrew Smith J:
1. 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”.
2. 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.
3. 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”).
4. 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.
5. 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.
6. 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...
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