Liao Eng Kiat v Burswood Nominees Ltd

• Judge: Belinda Ang Saw Ean J
• Judgment Date: 05 October 2004
• Neutral Citation: [2004] SGCA 45
• Citation: [2004] SGCA 45
• Defendant Counsel: K Shanmugam SC and Andrew Chan (Allen and Gledhill) and Tay Mui Leng Sharon (Donaldson and Burkinshaw)
• Published date: 11 October 2004
• Plaintiff Counsel: Jeanny Ng (Jeanny Ng)
• Date: 05 October 2004
• Docket Number: Civil Appeal No 6 of 2004
• Court: Court of Appeal (Singapore)
• Subject Matter: Whether Singapore courts precluded from recognising foreign judgment on grounds of public policy,Section 3(1) Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed),Foreign judgments,Conflict of Laws,Judgment given in foreign court on dishonoured cheque,Betting, Gaming and Lotteries,Whether claim for money given under loan or money won upon wager,Whether just and convenient for court to enforce foreign judgment in Singapore,Claim upon dishonoured cheque issued to casino,Recognition,Section 5(2) Civil Law Act (Cap 43, 1994 Rev Ed), s 3(2)(f) Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed),Section 5(2) Civil Law Act (Cap 43, 1994 Rev Ed),Transactions abroad

5 October 2004

Yong Pung How CJ (delivering the judgment of the court):

1 This appeal concerned the enforcement of a judgment (the “Australian judgment”), given by the Supreme Court of Western Australia in favour of the respondent casino, Burswood Nominees Ltd (“Burswood”), for its claim on, inter alia, a dishonoured cheque issued by the appellant, Liao Eng Kiat (“Liao”). The Singapore High Court allowed registration of the Australian judgment here. Liao failed to have the registration set aside, and appealed. We dismissed Liao’s appeal and now give our reasons.

Background facts

2 Burswood operated a licensed casino in Perth, Western Australia. Liao was a regular visitor to the Burswood casino. Depending on his turnover at the casino tables, Burswood provided Liao with various perks, such as reimbursement of his airfare and hotel and food expenses.

3 On or around 19 November 1997, Liao flew to Perth and checked into Burswood’s hotel. The next day, he utilised Burswood’s cheque cashing facility (“CCF”) to buy a chip purchase voucher. Essentially, the CCF allowed Liao to issue a personal cheque to the casino in exchange for a voucher of equivalent value. Liao issued a cheque for S$52,900 and was given a voucher of A$50,000 in return. Liao then exchanged this voucher for A$50,000 worth of gambling chips, which he proceeded to lose entirely at the gambling tables.

4 Liao’s personal cheque was dishonoured upon presentation. He did not deny his liability to repay the debt to Burswood, but asked for an extension to settle the outstanding amount.

5 After three years had passed and Liao had failed to make any payment to Burswood, Burswood sued upon the dishonoured cheque in the District Court of Western Australia. On 13 December 2001, after Liao’s failure to enter an appearance, Burswood obtained a default judgment against him for the sum of A$78,331.50 (the “judgment sum”) with costs of A$2,765.28. For purposes of registration, s 142 of the Supreme Court Act 1935 (Western Australia) deems the decision of the District Court of Western Australia to be a judgment of the Supreme Court of Western Australia.

6 In August 2003, Burswood successfully applied for registration of the Australian judgment in the Singapore High Court under the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) (“RECJA”). Two months later, Liao took out an application before an assistant registrar by way of summons in chambers to set aside the registration. He failed and appealed to the High Court, where his appeal was dismissed.

The appeal

Legislation and case law

Legislation

7 Two pieces of legislation were central to this appeal. The first was s 5 of the Civil Law Act (Cap 43, 1994 Rev Ed) (“CLA”), which states:

(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.

8 The second piece of legislation was s 3(2)(f) of the RECJA, which provides:

No judgment shall be ordered to be registered under this section if the judgment was in respect of a cause of action which for reasons of public policy or for some other similar reason could not have been entertained by the registering court.

Case law

9 The case of Star City Pty Ltd v Tan Hong Woon [2002] 2 SLR 22 (“Star City”) was of particular importance in the course of our deliberations. As this judgment will make frequent reference to Star City, it is appropriate to deal with it in some detail at the outset.

10 The facts of Star City are as follows. The plaintiff casino, located in Sydney, had a CCF that worked on largely the same premises as Burswood’s CCF. The defendant in Star City had handed five cheques to the casino in exchange for a chip purchase voucher, which was then changed for gambling chips. The defendant’s cheques were dishonoured for lack of sufficient funds, and the casino sued in the Singapore High Court to recover the money as an unpaid loan made to the defendant. The defendant contended that the transaction was a gaming contract, and that as such, s 5 of the CLA debarred the casino from bringing an action to recover the moneys owed to it.

11 In the High Court, Tan Lee Meng J dismissed the casino’s claim: Star City Pty Ltd v Tan Hong Woon [2001] 3 SLR 206. He observed that s 5(2) of the CLA barred our courts from adjudicating any action to recover money alleged to have been won upon any wager, regardless of whether the gambling took place in Singapore or abroad. After a detailed consideration of the case law, he decided that the action was one for money won upon a wager. Accordingly, s 5(2) of the CLA relieved the court from having to deal with the casino’s claim.

12 For reasons which will be particularised later in this judgment, we agreed with Tan J’s decision after hearing the casino’s appeal.

13 At this juncture, it suffices to note that the facts of the present case differed from those of Star City in one essential aspect. In Star City, the casino brought a fresh claim for the money on the dishonoured cheque in the Singapore courts. In the present case, however, Burswood had already obtained a judgment on the dishonoured cheque in the Australian court, and sought registration of the Australian judgment in Singapore. Registration will not be ordered if the appellant is able to establish any one of the limited number of exceptions in s 3(2) of the RECJA. The principal issue canvassed on appeal was whether s 5(2) of the CLA and s 3(2)(f) of the RECJA precluded registration of the Australian judgment on grounds of public policy. We now lay out our analysis of this issue in three stages.

Stage 1: Characterisation of the claim

14 It is settled law that whilst s 5(1) of the CLA only renders the original wagering or gaming contract null and void, s 5(2) strikes down as unenforceable all other contracts to pay the sum won upon a wager. As we pointed out in Star City, the success of the casino’s claim depended on the characterisation of the transaction in question. If the transaction was characterised as a loan, the action on the loan itself would succeed as long as the loan was valid under its governing law. In contrast, if the court characterised the transaction as an action to recover money won upon a wagering contract, s 5 of the CLA would preclude recovery of the money.

15 In this regard, the trial judge found that the principal judgment sum was a loan given by Burswood to Liao to enable Liao to gamble at the casino. Liao challenged this finding, asserting that the sum claimed by Burswood under the dishonoured cheque was for money won upon a wager.

16 In turn, Burswood sought to obviate this problem by persuading us that we were not free to re-characterise Burswood’s claim. Instead, Burswood said that we should limit ourselves to the causes of action contained in the Australian judgment. In other words, this court should only consider whether the original causes of action based on dishonour of a cheque and breach of the CCF were against Singapore public policy. We had no difficulty dismissing this argument. We were of the opinion that we were entitled to look beyond the technical causes of action before the Australian court to the context in which these causes of action arose when deciding whether s 3(2)(f) should apply to preclude registration of the Australian judgment.

17 Burswood argued that the handing over of the cheque pursuant to the CCF was simply a payment for a voucher. The wager itself only took place when the gambling chips exchanged for the voucher were used at the gambling tables. Liao, on the other hand, drew our attention to the affidavit testimony of a credit manager at Burswood’s casino, Mr Roger Lewis. Mr Lewis testified that the CCF is not a credit facility and that s 21 of the Casino (Burswood Island) Agreement prohibits the giving of loans to patrons. We were of the opinion that Mr Lewis’ characterisation of the CCF was not determinative of its actual characterisation in law. Rather, as we held in Star City at [38], the “overriding test” when determining whether to characterise a claim as a loan or a gaming debt must be “the essence of the transaction itself as determined by the courts of the forum”.

18 Burswood contended that its CCF could be distinguished from the facility offered in Star City because the casino in Star City required that the cheque remain uncashed for ten days, whereas Burswood did not lay down a similar requirement. We were not swayed by this argument. As we noted at [36] of Star City, the requirement that cheques presented under the casino’s CCF remain uncashed for ten days only served as “a deferred form of payment to give gamblers time to ensure that they have sufficient funds to repay their gambling losses in their bank accounts”. This did not change the fact that the CCF’s sole purpose was to enable patrons to gamble on credit, and that chips obtained via the CCF and placed on the gaming tables merely represented the moneys paid in advance by the gamblers to the casino by their cheques. We did not think that the absence of a requirement that Liao’s cheque should remain uncashed for a certain period of time was so significant as to alter the entire nature of the transaction.

19 In reaching our decision that the CCF in Star City was not a loan facility, we noted several features of the CCF, namely that:

(a) the chips were worthless outside the casino;

(b) no moneys were ever advanced by the casino, which merely gave the gambler the right to play at the tables upon presentation of his cheques; and

(c) any moneys lost were made good by the gambler and not the casino.

We observed that these same features were present in Burswood’s CCF, which was further indication that the object of the CCF...