Tote Investors Ltd v Smoker

JurisdictionEngland & Wales
JudgeTHE MASTER OF THE ROLLS,LORD WILBERFORCE,LORD PEARSON
Judgment Date23 June 1967
Judgment citation (vLex)[1967] EWCA Civ J0623-2
CourtCourt of Appeal (Civil Division)
Date23 June 1967

[1967] EWCA Civ J0623-2

In The Supreme Court of Judicature

Court of Appeal

Civil Division

From His Honour Judge Block

Mayor's and City of London Court.

Before

The Master of The Rolls (Lord Denning)

Lord Wilberforce and

Lord Pearson

Tote Investors Limited
Plaintiffs
Respondents
and
Barbara Mary Smoker
Defendant
Appellant

THE APPELLANT appeared in person.

MR JOHN WILMERS, Q.C. and Mr BRIAN GALPIN (instructed by Messrs Pettit & Westlake) appeared as Counsel for the Respondents.

THE MASTER OF THE ROLLS
1

Miss Smoker has in the past occasionally had a wager on a horse-race. Today she has been taking part in another game of chance or skill the game of litigation. I would like to pay a tribute to the skilful and attractive way in which she has played this game. So much so that I would be disposed to decide in her favour if that could properly be done.

2

Miss Smoker entered into betting transactions with a totalisator. She did it on credit. She laid her bets on horses with Tote Investors Limited. They placed those bets with the Horse Totalisator Board. If she had won, she would have received her share of the winnings. But she lost, and was presented with the bill. The total sum was £23. 13s.8d. She found herself unable to pay.

3

Tote Investors Limited. have brought a claim against Miss Smoker in the Mayor's and City of London Court. She pleads the Gaming Act. She says that the contract was void because Section 18 of the 1845 Act says: "All contracts or agreements whether by parole or in writing by way of gaming or wagering shall be null and void". In considering this point, it is essential to know what was the contract. There is no direct evidence because the case was tried on agreed facts; but so far as I can see, it was a contract by Miss Smoker, through Tote Investors Limited. as intermediaries, with the Horse Totalisator Board. She agreed to put a certain sum of money on a horse. Say it was 10s. The Board agreed that they would collect all the moneys which Miss Smoker and other people had put on the race. They would collect those moneys together and would distribute the total sum to the winners, after deducting their expenses. If Miss Smoker's horse won, she got her share of the winnings. If it lost, she had to pay the 10s.

4

It has been canvassed before us whether there was a contract between groups of "investors", as they are called. Miss Smoker suggested that there might be a contract between the group of persons who put money on the winning horses as againstthe rest who put money on the losing horses. I do not think that there was any such contract between groups. It was a simple contract with Tote Investors Ltd. They contracted in their own name but really on behalf of the Totalisator Board.

5

If I were to interpret Section 18 of the Gaming Act, 1845, without resort to law books, I should have thought that the contrasts which Miss Smoker made with or through Tote Investors were contracts of gaming or wagering. The Shorter Oxford Dictionary defines a wager as: "(1) Something ( esp. a sum of money) laid down and hazarded on the issue of an uncertain event. (2) An agreement or contract under which each of the parties promises to give money or its equivalent to the other according to the issue of an uncertain event". The dictionary defines "gaming" as "gambling". Those definitions fit this transaction. But our law books have given a special meaning to the words "gaming" and "wagering" in this statute. The classic definition was given by Mr Justice Hawkins in Carlill v. Carbolic Smoke Ball Co., 1892, 2 Queen's Bench, p. 490: "According to my view", he said, "a wagering contract is one by which two persons, professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependent upon the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the contracting parties having any other interest in that contract than the sum or stake he will so win or lose, there being no other real consideration for the making of such contract by either of the parties. It is essential to a wagering contract that each party may under it either win or lose, whether he will win or lose being dependent on the issue of the event, and, therefore, remaining uncertain until that issue is known. If either of the parties may win but cannot lose, or may lose but cannot win, it is not a wagering contract". That definition has been approved many times, particularly in Ellesmere v. Wallace, 1929, 2 Chancery, p. 1. I would not myself liketo treat it as a rigid definition or interpret it as a statute, but it does bring out this feature: It is essential that each party may either win or lose. If one party can neither win nor lose, then it is not "gaming" or "wagering". This was accepted in the House of Lords in Attorney-General v. Luncheon and Sports Club, 1929 Appeal Cases, p. 400. The actual decision turned on the special position of a club as a distributing agent. Nevertheless Lord Dunedin said: "Inasmuch as on the determination of the event in question - to wit, whether a certain horse is first or is placed in a race, as the case may be - the club can neither win nor lose, it follows that there is no bet with the only bookmaker alleged".

6

Applying this to the present case, it seems clear that the Totalisator Board can neither win nor lose. All they take out of the fund is their expenses. They are merely organisers who receive all the moneys, in their hands and then pay out the total to those who have succeeded, less expenses. As they neither win nor lose, it follows that it is not a contract of "wagering". Nor is it a contract by way of "gaming". The cases show the word "gaming" adds nothing to the word "wagering". On the authorities I feel compelled to hold that a contract by a backer who puts money on the totalisator is not a contract by way of gaming or wagering.

7

If I had doubts upon this score, they are resolved by the statutes which have been passed to legalise totalisators. It seems to me that Parliament has proceeded on the assumption that bets made with the totalisator are not contracts by way of gaming and wagering. The statute dates from 1934 but I need only take the latest Betting, Gaming and Lotteries Act, 1963, Section 14(3). It says that, where bets are made, the Totalisa tor Board are to deduct their expenses from "the aggregate amount staked": and shall "cause the whole of the remainder of the amount to be distributed among the persons making such of those bets as are winning bets". So the Board are obliged bystatute to pay over to the winners the total amount staked, less expenses. That imports that they must be able to collect the amount staked. If they are legally obliged to pay out, they must be legally entitled to collect in. Section 14(6) says that: "Nothing in this Act shall be construed….as preventing the Totalisator Board from giving credit in any betting transaction". That imports that they can give credit, and consequently that they can recover the sums. There is no point in allowing the Totalisator Board to give credit unless they have a right to recover the sums.

8

The text books proceed on the same...

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7 cases
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    • Ireland
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