Poh Soon Kiat v Desert Palace Inc (trading as Caesars Palace)

• Jurisdiction: Singapore
• Court: Court of Appeal (Singapore)
• Judge: Chan Sek Keong CJ
• Judgment Date: 08 December 2009
• Neutral Citation: [2009] SGCA 60
• Citation: [2009] SGCA 60
• Defendant Counsel: Foo Maw Shen, Daryl Ong and Ng Hui Min (Rodyk & Davidson LLP)
• Plaintiff Counsel: Chou Sean Yu, Loo Ee Lin and Tan Yee Siong (WongPartnership LLP)
• Published date: 04 February 2010
• Docket Number: Civil Appeal No 113 of 2008 (Summonses Nos 5512 of 2008, 1309 of 2009 and 1312 of
• Date: 08 December 2009
• Subject Matter: Limitation of Actions,Statutory Interpretation,Civil Procedure,Conflict of Laws,Contract,Betting, Gaming and Lotteries

8 December 2009 Judgment reserved.

Chan Sek Keong CJ (delivering the judgment of the court):

Introduction

1 This is an appeal against 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 71 (“the GD”)). The Judge had reversed the decision of the assistant registrar (“the AR”), who had dismissed an application for summary judgment by the respondent in this appeal, Desert Palace Inc (“the Respondent”). The Respondent is the plaintiff in the originating suit, ie, Suit No 670 of 2007 (“the Singapore Action”), which is a common law action to enforce in Singapore what we shall hereafter refer to as “the 2001 California Judgment”, viz, the judgment dated 9 November 2001 of the Superior Court of the State of California for the County of Santa Clara (“the Santa Clara Superior Court”).

2 The Judge held that the 2001 California Judgment was enforceable in Singapore by way of a common law action (viz, the Singapore Action), and that such an action was not barred by either s 5 of the Civil Law Act (Cap 43, 1999 Rev Ed) (“the CLA”) or s 6(1) of the Limitation Act (Cap 163, 1996 Rev Ed) (“the LA”).

Background facts

3 The Respondent operates a casino in Las Vegas, Nevada, known as Caesars Palace. The appellant, Poh Soon Kiat (“the Appellant”), was a patron of the casino on various occasions between 1992 and 1998. Sometime during that period, he obtained credit from the Respondent amounting to US$2m in order to gamble. In exchange for the chips to gamble, the Appellant signed ten “markers” (also known as “cheques”) on the understanding that, if he paid up whatever losses he incurred, the markers would be returned to him for destruction. If, however, he failed to redeem the markers, they would be retained as proof of the debt which he owed to the Respondent. The Appellant gambled and lost the US$2m worth of gambling chips, but failed to pay up.

4 In 1999, the Respondent commenced Case No A 390420 in the District Court for Clark County, Nevada, to recover the US$2m owed by the Appellant. On 29 March 1999, the Respondent obtained a default judgment against the Appellant for the sum of US$2m (“the 1999 Nevada Judgment”). On 2 June 1999, in Case No CV 782287 in the Santa Clara Superior Court, the Respondent obtained another default judgment (“the 1999 California Judgment”). This default judgment was based on the 1999 Nevada Judgment, and was for a total sum of US$2,453,126.33 plus post-judgment interest at the statutory rate of 10% per annum.

5 Subsequently, the Respondent discovered that the Appellant had, on 11 February 1999, transferred his one-third share in a property in California (“the Property”) to Surepath Development Limited (“Surepath”), a British Virgin Island company. On 14 April 2000, the Respondent and Sheraton Desert Inn Corporation (“Sheraton”), a casino operator that had also obtained a judgment against the Appellant in 1999 (“the Sheraton Judgment”), commenced Case No CV 789130 in the Santa Clara Superior Court to set aside the Appellant’s transfer of his one-third share in the Property (hereafter referred to as the Appellant’s “interest in the Property” for short) on the ground that it was a fraudulent conveyance under the law of California. On 9 November 2001, judgment in default – ie, the 2001 California Judgment – was granted to the Respondent and Sheraton. Specifically, the 2001 California Judgment stated that:

(a) the transfer of the Appellant’s interest in the Property to Surepath was to be set aside;

(b) the Appellant’s interest in the Property was to be sold and the proceeds applied in part or full satisfaction pro rata of the 1999 California Judgment and the Sheraton Judgment; and

(c) if the sale proceeds were insufficient to satisfy both the 1999 California Judgment and the Sheraton Judgment in full, the Appellant was to remain liable for the shortfall.

A total of US$130,119.35 was recovered from the sale of the Appellant’s interest in the Property and paid pro rata to the Respondent and Sheraton, leaving a balance of over US$4m (inclusive of accrued interest) due and owing to the Respondent.

6 On 19 October 2007, the Respondent commenced the Singapore Action against the Appellant based on the 2001 California Judgment to recover the sum of US$4,378,927.63. On 8 January 2008, the Respondent applied via Summons No 72 of 2008 (“SUM 72/2008”) for summary judgment for the amount claimed.

7 In response, on 15 January 2008, the Appellant filed an application (viz, Summons No 189 of 2008 (“SUM 189/2008”)) for the Singapore Action to be either struck out under O 18 r 19 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) or dismissed pursuant to O 14 r 12 should certain questions of law be determined in his favour. The questions raised for the decision of the court in SUM 189/2008 were as follows:

(a) whether the Respondent’s claim arose out of an agreement by way of gaming or wagering, which agreement was null and void under s 5(1) of the CLA;

(b) whether, in the alternative, the Respondent’s claim was for the recovery of a gambling debt, which claim was unenforceable by reason of s 5(2) of the CLA; and

(c) whether the Respondent’s claim was barred by the limitation period set out in s 6(1) of the LA as more than six years had elapsed since the Respondent’s cause of action accrued.

The decision of the AR

8 The AR dismissed the Respondent’s application for summary judgment (vis-à-vis SUM 72/2008) and struck out the Singapore Action (vis-à-vis SUM 189/2008). He held that the Singapore Action, being a common law action to enforce a foreign judgment, was essentially an action based on “an implied contract by the judgment debtor to pay the judgment debt”^{[note: 1]} (citing the High Court’s decision in Westacre Investments Inc v Yugoimport-SDPR [2007] 1 SLR 501 (“Westacre Investments”) (as an aside, we should mention that this particular ruling of the High Court was affirmed by this court in Westacre Investments Inc v The State-Owned Company Yugoimport SDPR [2009] 2 SLR 166, although the High Court’s decision was ultimately reversed on other grounds)). In the AR’s view, a common law action on a foreign judgment would be time-barred under s 6(1)(a) of the LA after the expiry of six years from the date of accrual of the cause of action, that date being “the date of the judgment in question as that [was] the date when the judgment debt came into being”.^{[note: 2]} The AR held that Singapore law, as the lex fori, was applicable to determine the nature of the Respondent’s claim and when the Respondent’s cause of action accrued for the purposes of the LA. Proceeding on that basis, he concluded:^{[note: 3]}

In my view, Order (iii) [ie, the order in the 2001 California Judgment stating that the Appellant was to remain liable for any shortfall between the sale proceeds of the Appellant’s interest in the Property and the sum due to (inter alia) the Respondent under the 1999 California Judgment (see [5] above)] clearly seeks to enforce the judgment debt created by the first judgment [ie, the 1999 California Judgment] (or in fact the [1999] Nevada [J]udgment before that). And that judgment debt accrued way back in 1999. Notwithstanding [the fact] that the [Respondent’s] claim is clothed in terms of the second judgment [ie, the 2001 California Judgment], in substance it is the judgment debt of 1999 that is sought to be enforced. Therefore, in my view, the action to enforce that judgment debt by way of an implied contract is time-barred under [s]ection 6(1)(a) of the [LA].

9 In view of his decision on limitation, the AR declined to decide the other two questions that had been raised by the Appellant in SUM 189/2008, viz, whether the Singapore Action was based on an agreement by way of gaming or wagering, which agreement was null and void under s 5(1) of the CLA, and whether the Singapore Action was an action to recover a gambling debt, which action could not be brought because of s 5(2) of the CLA (see [7] above).

The decision of the Judge

10 The Respondent appealed via Registrar’s Appeal No 77 of 2008 and Registrar’s Appeal No 78 of 2008 against the AR’s decision in, respectively, SUM 189/2008 and SUM 72/2008. The Judge allowed both appeals and set aside the AR’s decision. He granted summary judgment to the Respondent on the ground that the 2001 California Judgment was “a fresh judgment which imposed an obligation on the [Appellant] to pay the sums specified in that … judgment” (see the GD at [104]). The 2001 California Judgment was, the Judge stated, given by a competent court; the judgment was final and conclusive against the Appellant, and the latter had no defence to the Singapore Action. The Judge also held that an action to enforce a foreign judgment was subject to a limitation period of six years under s 6(1)(a) of the LA (id at [84]), although, in his view, the applicable limitation period should be 12 years under s 6(3) of the LA (id at [82]). Finally, he held that s 5(2) of the CLA did not apply to any action in Singapore on the 2001 California Judgment since this court had decided in Liao Eng Kiat v Burswood Nominees Ltd [2004] 4 SLR 690 (“Burswood Nominees”) that a Commonwealth judgment which was “[i]n substance … [a judgment for] a gambling debt owed to [a] casino” (see the GD at [43]) could be registered under the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) (“the RECJA”) notwithstanding s 5(2) of the CLA (see further [116]–[117] below).

The issues on appeal

11 The Appellant has appealed against the Judge’s decision to grant the Respondent summary judgment in the Singapore Action. In his written submissions to this court, the Appellant’s counsel invited this court to make the following findings:

(a) the limitation period applicable to the Singapore Action was six years under s 6(1)(a) of the LA and not 12 years under s 6(3) thereof;

(b) the Singapore Action was, effectively,...