Desert Palace Inc (doing business as Caesars Palace) v Poh Soon Kiat

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeChan Seng Onn J
Judgment Date02 September 2008
Neutral Citation[2008] SGHC 144
Citation[2008] SGHC 144
Subject MatterWhether time bar for enforcement of foreign judgments six years or 12 years,Particular causes of action,Test to determine which judgment being enforced in present action,Creditor obtaining foreign judgments to recover debt,Whether present action brought to enforce foreign judgments obtained pursuant to wagering contract prohibited,Creditor commencing present action to enforce foreign judgments,Sections 6(1)(a) and 6(3) Limitation Act (Cap 163, 1996 Rev Ed),Enforcement of foreign judgments,Whether foreign wagering contract valid under foreign law unenforceable,Sections 5(1) and 5(2) Civil Law Act (Cap 43, 1999 Rev Ed),Betting, Gaming and Lotteries,Debtor borrowing moneys in Las Vegas to gamble,Creditor obtaining several foreign judgments to recover same debt,Wagering contracts,Limitation of Actions
Plaintiff CounselFoo Maw Shen and Daryl Ong and Ng Hui Min (Rodyk & Davidson LLP)
Defendant CounselChou Sean Yu and Tan Yee Siong (WongPartnership LLP)
Published date03 September 2008
Date02 September 2008
Docket NumberSuit No 670 of 2007 (Registrar's Appeal Nos 77 and 78 of 2008)

2 September 2008

Chan Seng Onn J :

Introduction

1 This was an appeal against the decision of the Assistant Registrar, Mr Teo Guan Siew (“AR”), dismissing the plaintiff’s application for summary judgment and allowing the defendant’s application to strike out the plaintiff’s statement of claim. I allowed the appeal, set aside the decision of the AR and granted summary judgment. The defendant appealed and I now give my reasons.

Background

2 The plaintiff carried on business as a hotel and casino in Las Vegas, trading under the name of Caesars Palace. The plaintiff’s claim was filed on 19 October 2007 and was for a sum of US$4,378,927.63, being the balance of the sum due to the plaintiff under a judgment of the Superior Court of the State of California for the County of Santa Clara including post-judgment interest and legal costs.

3 The defendant patronised Caesars Palace on various occasions between 1992 and 1998 and he incurred what he alleged were gambling debts. The plaintiff said that the defendant was lent US$2,000,000 and had signed 10 markers or cheques in exchange for gambling chips to enable him to play at the gambling tables. The plaintiff therefore extended credit for gambling to the defendant. The markers or cheques were evidence of his obligation to repay those monies to the plaintiff. If the defendant lost at the gambling tables but paid for the losses, the markers or cheques would be returned to him for destruction. The defendant never paid cash to purchase the gambling chips for gambling. If the defendant had paid cash to purchase the gambling chips, then there would have been no extension of credit by the plaintiff to the defendant to gamble, and in which event, he could return the chips (and any extra chips won at the gambling tables) in exchange for cash. This was an important difference.

4 The plaintiff commenced proceedings in the District Court for Clark County, Nevada, United States of America (“USA”) in Case No. A 390420 to recover the monies lent and obtained default judgment for US$2,000,000 on 29 March 1999 (the “Nevada Judgment”).

5 Subsequently, in proceedings in a sister state in the USA to enforce the Nevada Judgment, the plaintiff also obtained judgment (another default judgment) in Case No. CV 782287 on 2 June 1999 in the Superior Court of the State of California for the County of Santa Clara in the total sum of US$2,453,126.33 (the “First Judgment”).

6 The plaintiff and a co-plaintiff, Sheraton Desert Inn Corporation (“Sheraton”) jointly issued fresh proceedings in the Superior Court of the State of California for the County of Santa Clara in Case No. CV 789130 to set aside the transfer of property by the defendant to a BVI corporation, Surepath Development Limited (“Surepath”), the second defendant. On 11 February 1999, the defendant had executed a deed for the transfer of a one third interest in certain real property in California (the “property”) to Surepath. This transfer was sought to be set aside as being a fraudulent conveyance aimed at frustrating satisfaction of the Nevada Judgment, and a constructive trust was sought to be imposed on Surepath.

7 Judgment was given on 9 November 2001 in default in the plaintiff’s favour (the “Second Judgment”) whereby the transfer was set aside and the property was to be sold in part or full satisfaction pro rata of Sheraton’s judgment and Caesars’ First Judgment, with the defendant being liable for any deficiency on the satisfaction of those judgments. The material part of the Second Judgment that concerned this present action was the following:

The proceeds of sale shall be applied pro-rata toward the Judgments referenced in the previous paragraph [i.e. Sheraton’s judgment and Caesars’ First Judgment] and if there are not sufficient proceeds from the sale to satisfy the Judgments in full, then Defendant SOON KIAT POH shall remain liable for any such deficiency on the Judgments.

8 Following the sale of the property, a total of US$130,119.35 was credited to the plaintiff as against the First Judgment amount and the interest on that sum. The “deficiency” under the Second Judgment stood at US$4,343,306.91. In the present proceedings, the plaintiff sought to enforce the Second Judgment against the defendant for this deficiency remaining unpaid.

9 The defendant raised the following defences in the present proceedings:

(a) The claim for payment of gaming debts incurred under a contract or agreement by way of gaming or wagering was null and void under section 5(1) of the Civil Law Act (“CLA”).

(b) The claim for recovery of a gambling debt which in essence was money won upon a wager was prohibited and unenforceable under section 5(2) of the CLA.

(c) The claim was barred under section 6(1)(a) of the Limitation Act (“LA”) since more than 6 years had passed since the debt accrued. The plaintiff had characterised its claim as essentially an enforcement of the Second Judgment in order to avoid the operative time bar.

10 For convenience, I now set out both section 5 of the CLA and section 6 of the LA.

11 Section 5 of CLA provides as follows:

Agreement by way of gaming or wagering to be null and void

5. —(1) All contracts or agreements, whether by parol or in writing, by way of gaming or wagering shall be null and void.

(2) No action shall be brought or maintained in the court for recovering any sum of money or valuable thing alleged to be won upon any wager or which has been deposited in the hands of any person to abide the event on which any wager has been made.

.....

12 Section 6 of the LA provides that:


6. —(1) Subject to this Act, the following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued:

(a) actions founded on a contract or on tort;

(b) actions to enforce a recognizance;

(c) actions to enforce an award;

(d) actions to recover any sum recoverable by virtue of any written law other than a penalty or forfeiture or sum by way of penalty or forfeiture.

(2)…..

(3) An action upon any judgment shall not be brought after the expiration of 12 years from the date on which the judgment became enforceable and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of 6 years from the date on which the interest became due.

Decision of the AR

13 The AR ruled in favour of the defendant on the ground that the plaintiff’s claim was barred by section 6(1)(a) of the LA, under which no action founded on a contract was to be brought 6 years from the date of accrual of the cause of action. Similarly, an action founded upon an implied contract based on a foreign judgment would be time barred (under section 6(1)(a) of the LA) after 6 years from the date of the foreign judgment. As this was sufficient to dispose of the matter, the AR did not consider the other issues in the claim.

14 The AR stated that a common law action to enforce a foreign judgment would proceed as an action to sue for the judgment debt on the basis of an implied contract by the judgment debtor to pay the judgment debt. See Westacre Investments Inc v Yugoimport –SDPR (also known as Jugoimport-SDPR) [2007] 1 SLR 501. The accrual of the cause of action would generally be the date when the judgment debt (sued upon) came into being.

15 The AR further determined that Singapore Law, as the lex fori, applied to determine what was the judgment debt and when it accrued for the purpose of section 3 (1) of the LA. In the AR’s view, the Second Judgment clearly sought to enforce the judgment debt created by the First Judgment, or in fact the Nevada Judgment before that, and that judgment debt accrued way back in 1999. The AR ruled that notwithstanding that the plaintiff’s claim was clothed in terms of the Second Judgment, in substance it was the judgment debt of 1999 that was sought to be enforced. As such, the action to enforce that judgment debt by way of an implied contract was time barred under section 6(1)(a) of the LA. The AR disregarded the evidence on foreign law.

16 Basically, the AR accepted the defence that more than six years had elapsed since the principal debt accrued in Caesars Palace in Nevada, USA at the end of 1998. In effect, the defendant’s position was that the plaintiff was suing on the original debt he had incurred. The AR accordingly found that the action was time barred in Singapore.

My analysis

17 My analysis would be structured as follows:

First question would be whether or not enforcement of the foreign judgment (be it the Nevada, First or Second Judgment) by way of a common law action was contrary to s 5(2) of the CLA. If it was unenforceable, then the plaintiff’s claim must be dismissed and that would be the end of the matter. But if it was enforceable, then the second question below must be answered.

Second question was whether the time bar for a common law action in Singapore on a foreign judgment (be it the Nevada, First or Second Judgment) was 12 years (pursuant to s 6 (3) of the LA) or 6 years (pursuant to s 6 (1) (a) of the LA) from the date of accrual of the cause of action which would be the date of issuance of the respective foreign judgments. This was a difficult question in the light of the conflicting authorities cited to me. I would pause to deal briefly with the significance of this question in relation to the facts of this case.

18 This present action was filed just 3 weeks before the date of 6 years from the Second Judgment. Hence, any common law action to sue in Singapore on the Second Judgment as an implied contract by the judgment debtor to pay the judgment debt would be within the limitation period of 6 years if the applicable provision was s 6(1)(a) of the LA. It would also be within the limitation period of 12 years if s 6(3) of the LA were to be construed to be applicable not only to an action upon a domestic judgment but also to an action in Singapore upon a foreign judgment. Essentially, no time bar applied in any event in relation to an...

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3 cases
  • Poh Soon Kiat v Desert Palace Inc (trading as Caesars Palace)
    • Singapore
    • Court of Three Judges (Singapore)
    • 8 December 2009
    ...the decision of the High Court judge (“the Judge”) in Registrar's Appeals Nos 77 and 78 of 2008 (see Desert Palace Inc v Poh Soon Kiat [2009] 1 SLR (R) 71 (“the GD”)). The Judge had reversed the decision of the assistant registrar (“the AR”), who had dismissed an application for summary jud......
  • Teh Siew Hua v Tan Kim Chiong
    • Singapore
    • High Court (Singapore)
    • 4 June 2010
    ...of Caesars Palace (CA) (see above at [15]), as well as [63] to [68] of Desert Palace Inc (trading as Caesars Palace) v Poh Soon Kiat [2009] 1 SLR(R) 71 (“Caesars Palace (HC)”) (which was not overruled by the Court of Appeal on this point). On the basis of these authorities, I therefore deci......
  • Hai Jiao 1306 Ltd and others v Yaw Chee Siew
    • Singapore
    • International Commercial Court (Singapore)
    • 13 July 2020
    ...other evidence): see Saeng-Un Udom v Public Prosecutor [2001] 2 SLR(R) 1; Desert Palace Inc (trading as Caesars Palace) v Poh Soon Kiat [2009] 1 SLR(R) 71. The specific alleged breaches of the Letters of As to the alleged breach(es) by the defendant of the best endeavours obligation, it was......

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