Marina Bay Sands Pte Ltd v Ong Boon Lin Lester

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 26 August 2013
• Neutral Citation: [2013] SGHC 163
• Court: High Court (Singapore)
• Docket Number: Suit No 792 of 2010
• Published date: 10 September 2013
• Year: 2013
• Hearing Date: 01 March 2013,28 February 2013,28 March 2013,27 February 2013
• Plaintiff Counsel: Surenthiraraj s/o Saunthararajah @ S. Suressh, Toh Wei Yi, and Sunil Nair (Harry Elias Partnership LLP)
• Defendant Counsel: Sunil Singh Panoo and Suppiah Krishnamurthi (Dhillon & Partners)
• Subject Matter: Contract,illegality and public policy,statutory illegality,Statutory Interpretation,definitions
• Citation: [2013] SGHC 163

Lai Siu Chiu J: Introduction

In the present action, Marina Bay Sands Pte Ltd (“the Plaintiff”), which operates a casino (“the casino”) at its namesake hotel in Singapore, is claiming that Ong Boon Lin Lester (“the Defendant”) failed to repay a debt owed to the Plaintiff, in breach of a credit agreement that the parties had executed. The Plaintiff claims, inter alia, the sum of $240,868 (“the Principal Amount”) being the principal amount owed by the Defendant together with interest due thereon.

The background

The Defendant first patronised the casino on 1 May 2010. On the same day, the Defendant registered to be a member of Paiza (which was the Plaintiff’s exclusive club for its valued patrons) and enrolled in the Non-Negotiable Chip Rolling Program (“the NNCR programme”), a programme that allowed patrons to earn commissions when losses were incurred by patrons.

On that same day, the Plaintiff opened a deposit account (“the Deposit Account”) for the Defendant and the Defendant allegedly deposited cash amounting to $100,000 into the Deposit Account. This was evidenced by the “Front Money Deposit” slip, which was acknowledged by the Defendant. Subsequently, the Defendant withdrew $100,000 in non-negotiable chips (“NN1 Chips”). These were chips that were issued under the NNCR Programme.

The Defendant submitted the Plaintiff’s Credit Application/Cheque Cashing Application dated 1 May 2010 (“the Credit Application”) applying for a credit facility of $1m. He then executed the Credit/Cheque Cashing Agreement (“the Credit Agreement”) also dated 1 May 2010 with the Plaintiff. The Credit Agreement sets out the terms and conditions by which the Plaintiff would extend credit to the Defendant. The material terms of the Credit Agreement are set out below: Pursuant to cl 8 of the Credit Agreement, the Defendant was to pay to the Plaintiff the amount of the casino chips transferred to him under the Credit Agreement on the Maturity Date (“Maturity Date”), which was 14 days after the date of transfer of the casino chips. Pursuant to cl 5 of the Credit Agreement, if the Defendant had a deposit account with the Plaintiff, the funds in the deposit account would be used before any credit drawdown was permitted. Pursuant to cl 5 of the Credit Agreement, the Defendant was to execute any negotiable instrument(s) requested by the Plaintiff. Pursuant to cl 9 of the Credit Agreement, any amount lent and not paid on the Maturity Date would be subject to interest at the annual rate of 12% beginning from the day after Maturity Date until receipt of the cleared funds. Pursuant to cl 14 of the Credit Agreement, the Defendant was to provide, as security for the issuance of credit, a personal cheque or other form of acceptable negotiable instrument in the amount of casino chips transferred to the Defendant. The Plaintiff was entitled to apply the cheque towards payment and to complete any portion of the cheque that may be missing or left blank, including but not limited to the amount of the outstanding credit balance, the date of the cheque and the bank or account number. Pursuant to cl 12 of the Credit Agreement, the Plaintiff was entitled to all costs of collection, including but not limited to reasonable lawyers’ fees and court costs.

Pursuant to cll 5 and 14 of the Credit Agreement, the Defendant handed to the Plaintiff a cheque issued in the Plaintiff’s favour (“the Defendant’s Cheque”), which was to serve as security for the Plaintiff’s provision of chips on credit to the Defendant.

Although the Defendant applied for a credit limit of $1m, the Plaintiff only approved his credit for $250,000. The Defendant withdrew the entire amount of $250,000 of his credit line when the Plaintiff issued 250,000 NN1 Chips to him. The Defendant signed a promissory note dated 3 May 2010, agreeing to pay the Plaintiff $250,000 on demand. The promissory note included an “Interest Grace Period” of 90 days after the maturity date and stated that interest at the annual rate of 12% would be payable by the Defendant beginning on the day after the expiration of the 90 days. The Defendant was unlucky in his gambling sessions between 1 May 2010 (gaming date 30 April 2010) and 14 May 2010 (gaming date 13 May 2010); he lost not only his deposit of $100,000 but also the credit of $250,000 extended to him by the Plaintiff.

Under the NNCR Programme, the commission due to the Defendant was calculated to be $9,132 on his losses and this amount was credited to the Defendant’s Deposit Account. Pursuant to cl 8 of the Credit Agreement, on the Maturity Date of 16 May 2010, the total sum owing by the Defendant under the Credit Agreement and promissory note amounted to $240,868, after setting off the commission of $9,132.

Between 17 June 2010 and 8 July 2010, the Plaintiff’s Director of International Marketing made several telephone calls to the Defendant requesting payment. However, the Defendant failed to pay. The Plaintiff then presented the Defendant’s Cheque dated 8 July 2010 with the sum payable as $240,868, for payment on 9 July 2010. The Defendant’s Cheque was dishonoured and returned on 12 July 2010.

By way of letters dated 3 August 2010 and 11 August 2010, the Plaintiff again notified the Defendant that the Principal Amount was due and requested the Defendant to make payment.

On 23 September 2010, the Plaintiff’s solicitors sent a letter of demand to the Defendant for the sum of $244,196.08, comprising the Principal Amount, the accrued interest for the period of 15 August 2010 (90 days after the Maturity Date) to 23 September 2010 at the annual rate of 12% pursuant to the terms and conditions of the promissory note, and legal fees incurred by the Plaintiff. The Defendant did not comply with the letter of demand.

Consequently, the Plaintiff commenced this suit claiming the Principal Amount and 12% default contractual interest together with costs pursuant to cl 12 of the Credit Agreement.

The applicable law

The Defendant’s defence to the Plaintiff’s claim essentially was that the Plaintiff’s extension of credit to the Defendant was unenforceable because the Defendant was not a “premium player” (“Premium Player”) according to the Casino Control Act (Cap 33A, 2007 Rev Ed) (“the CCA”) and that the Plaintiff did not comply with all the relevant controls and procedures approved by the Casino Regulatory Authority (“the CRA”). It is therefore helpful at this juncture to set out the statutory regime relevant to the granting of credit by the Plaintiff’s casino to its patrons.

The starting point is that gaming and wagering contracts are null and void by virtue of s 5 of the Civil Law Act (Cap 43, 1999 Rev Ed):

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.

…

However, s 40 of the CCA provided that s 5 of the Civil Law Act did not apply to certain contracts relating to gaming where such contracts were for transactions permitted under s 108 of the CCA:

Certain contracts in relation to gaming valid and enforceable 40. Section 5(1) and (2) of the Civil Law Act (Cap. 43) shall not apply in relation to — (a) any contract entered into with a casino operator or his agent for the playing in the casino of a game that is conducted by or on behalf of the casino operator or his agent, as the case may be, at any time while the casino licence is in force; (b) any contract entered into with a casino operator or his agent for the use of a gaming machine in the casino, at any time while the casino licence is in force; and (c) any contract for any transaction permitted under section 108, at any time while the casino licence is in force.

[emphasis added]

For easy reference, the relevant provisions of s 108 are set out below:

Credit, etc. 108.—(1) Except to the extent that this section or regulations relating to credit allow, no casino operator, licensed junket promoter, agent of a casino operator or casino employee shall, in connection with any gaming in the casino — (a) accept a wager made otherwise than by means of money or chips; (b) lend money or any valuable thing; (c) provide money or chips as part of a transaction involving a credit card; (d) extend any other form of credit; or (e) except with the approval of the Authority, wholly or partly release or discharge a debt.

(2) A casino operator may establish for a person a deposit account to which is to be credited the amount of any deposit to the account comprising — (a) money; (b) a cheque payable to the casino operator; or (c) a traveller’s cheque.

(3) The casino operator may issue to a person who establishes a deposit account and debit to the account chip purchase vouchers, cheques or money, not exceeding in total value the amount standing to the credit of the account at the time of issue of the vouchers, cheques or money.

…

(7) Notwithstanding anything in this section, a casino operator or a licensed junket promoter may provide chips on credit to a person — (a) who is not a citizen or permanent resident of Singapore (as defined in section 116(9)); or (b) who is a premium player,

if the casino operator or licensed junket promoter (as the case may be) and the person satisfy the requirements of any relevant controls and procedures approved by the Authority under section 138.

(8) Any — (a) casino operator who contravenes subsection (1) or (6); or (b) licensed junket promoter, agent of a casino operator or casino employee who contravenes subsection (1),

shall be — (i) liable to disciplinary action, in the case of a casino operator, licensed special employee or licensed junket promoter; or (ii) guilty of an offence, in any other case.

(9) Any person who — (a) provides chips on credit to persons other than as permitted in subsection (7)(a) or (b) shall be deemed to be a moneylender...