Resorts World at Sentosa Pte Ltd v Lee Fook Kheun

• Jurisdiction: Singapore
• Judge: Valerie Thean J
• Judgment Date: 31 July 2018
• Neutral Citation: [2018] SGHC 173
• Plaintiff Counsel: N Sreenivasan SC, Shankar s/o Angammah Sevasamy and Lim Min (Straits Law Practice LLC)
• Docket Number: Suit No 152 of 2016 and Summons No 1401 of 2018
• Date: 31 July 2018
• Hearing Date: 30 May 2018,08 April 2018,11 April 2018,02 July 2018,03 April 2018,10 April 2018,04 April 2018,06 April 2018,29 June 2018,09 May 2018,09 April 2018,07 April 2018,05 April 2018
• Subject Matter: Capacity of parties,Incapacity,Contract,Casino Control Act,Betting, gaming and lotteries,Intoxication,Loans,Rescission,Formation,Remedies
• Published date: 04 August 2018
• Defendant Counsel: Palmer Michael Anthony and Reuben Tan Wei Jer (Quahe Woo & Palmer LLC)
• Court: High Court (Singapore)
• Citation: [2018] SGHC 173
• Year: 2018

Valerie Thean J: Introduction

The plaintiff, Resorts World at Sentosa Pte Ltd (“RWS”), is a licensed casino operator.¹ The defendant, Mr Lee Fook Kheun (“Mr Lee”), is a patron to whom RWS extended a credit facility of $5 million on 20 August 2010 (“the Credit Facility”), which subsequently was increased by another $5 million on 22 August 2010. The Credit Facility was fully drawn down. Mr Lee has made partial repayment, and $5,930,595 remains outstanding. RWS claims this amount, together with the interest and costs provided under the agreements. Mr Lee contests this, and counterclaims for the sum he previously paid RWS. For reasons that follow, judgment is ordered for RWS and Mr Lee’s counterclaim is dismissed.

Background

Mr Lee is a 67-year-old Malaysian who was a director and shareholder of various construction companies and is at present largely retired. Since the early 1990s, he has been a close friend and business associate of Mr Lim Kim Chai (“Mr Lim”). Mr Lim was and is in the gaming and gambling industry, and operates junkets to casinos with Mr Low Thiam Herr (“Mr Low”). Mr Lee also became acquainted with Mr Low through Mr Lim. All three men live in Kuala Lumpur. From 2007, the three men travelled together for business and leisure. From time to time, Mr Lee visited casinos as part of a larger group with Mr Lim and Mr Low.

Mr Lee’s first visit to RWS was on 7 July 2010. RWS was newly opened at the time, and he was interested to explore the possibility of opening a Chinese restaurant in RWS that would specialise in seafood dishes and turtle soup.² Mr Lee remembered receiving VIP treatment as part of Mr Lim’s entourage, and enjoying alcohol in the VIP room.³ During the visit, Mr Lee applied to be a member of RWS, and completed a Letter of Authorisation, in which he authorised representatives of RWS to assist him whenever he gamed at its casino (“the Casino”). Mr Lee also obtained a “Platinum” level membership, which enabled him to game in the Casino’s high limit gaming area.⁴ Mr Lee was further enrolled in the Casino Rolling Programme as a premium member, and enjoyed access to the Casino’s premium lounge.⁵

On 20 August 2010, Mr Lee visited the Casino again with Mr Lim and Mr Low.⁶ They were welcomed by Tan Choon Seng (“Mr Tan”), who was assigned by RWS to serve as their relationship manager.⁷ By way of a Credit or Cheque Cashing Facility Request Form signed by Mr Lee (“the Request Form”),⁸ he obtained a facility of $5 million from RWS. On the same day, RWS provided Mr Lee $5 million worth of gambling chips, as evidenced by a credit marker signed by Mr Lee (“the First Credit Marker”).⁹ Both the Request Form and the First Credit Marker are dated 20 August 2010.

Two days later, on 22 August 2010, Mr Lee again accompanied the same group of friends to the Casino. Pursuant to a Credit Line Amendment Request Form signed by Mr Lee, he obtained an increase in his credit facility with RWS to $10 million (“the Amendment Form”).¹⁰ RWS then provided him a further $5 million in chips, as evidenced by a second credit marker (“the Second Credit Marker”), which was signed by Mr Lee.¹¹ Both the Amendment Form and the Second Credit Marker are dated 22 August 2010.

The $10 million credit facility was fully drawn down. Under the terms of the Request Form and the Amendment Form (“the Credit Agreements”), Mr Lee was to make repayment within seven days from the date of the draw down. He did not do so. Several months later, RWS contacted Mr Lee, asking him to repay the sum of $10 million. According to Mr Lee, he insisted that he did not draw down on the Credit Facility or gamble at the Casino, and requested for CCTV footage of him gambling, which RWS did not provide.¹² Despite this, Mr Lee began to make repayments to RWS in instalments.¹³

Subsequently, Mr Lee was contacted by Dato’ Sri Michael Joseph (“Dato’ Sri Joseph”), who was at that time a Senior Vice President of RWS.¹⁴ In or around early 2015, Dato’ Sri Joseph asked to meet Mr Lee, and during that meeting, pressed Mr Lee for repayment.

Mr Lee then prepared 25 post-dated cheques of RM500,000.00 in favour of RWS,¹⁵ as well as a handwritten cover letter dated 8 January 2015 enclosing those cheques (“the Handwritten Letter”).¹⁶ The letter was headed “without prejudice” and read as follows:

Re: Credit Facility

With reference to the above matter, I enclose herewith 24 cheques of RM500,000.00 each dated 25th day of each month commencing from January 2015 as settlement for the credit facility subject to the following conditions:-

(a) that I may request for deferment of about 10 days from 25th day of each month in the event I do not have sufficient fund in the account for clearance of those cheques, (b) you shall return the cheque(s) to me in the event I deposited money into your account in lieu of the payment by cheque, (c) I shall be entitled to some rebate at the end of settlement of the credit facility. The letter was signed off by Mr Lee and acknowledged by Dato’ Sri Joseph with a signature dated 9 January 2015.

On or around the same date, Mr Lee signed a “settlement agreement” dated 8 January 2018 prepared by RWS, acknowledging that he owed $10 million to RWS under the Credit Facility (“the Settlement Agreement”).¹⁷ The salient parts of the Settlement Agreement reads in the following terms:

SETTLEMENT OF OUTSTANDNG UNDER THE CREDIT FACILITY FOR SGD 10,000,000.00 (the “CREDIT FACILITIES”)

I acknowledge that Resorts World at Sentosa Pte. Ltd. (“RWS”) had, at my request, extended a total sum of SGD 10,000,000.00 to myself under the Credit Facilities between the period of 20 Aug 2010 to 22 Aug 2010, and the outstanding currently due and owing by me to RWS under the Credit Facility is SGD 6,878,146.00 (the “Outstanding Debt”)

In consideration of RWS granting to me the indulgence of time to settle the Outstanding Debt, I agree to repay the Outstanding Debt according to the following Payment Schedule and on the terms and conditions set out in this letter (the “Settlement Agreement”):

…

Time shall be of the essence. I agree that, without prejudice to any other rights that RWS may have, in the event of any breach or default of any obligations pursuant to this Settlement Agreement, all balance outstanding amounts shall automatically become due and payable without notice.

[emphasis added]

Mr Lee does not dispute that he signed the Settlement Agreement, but contends that he did so because he feared the embarrassment of a lawsuit. While Dato’ Sri Joseph thought that the Settlement Agreement was signed on 8 January 2015, Mr Lee’s case is that it was signed on 9 January 2015.

Thereafter, Mr Lee continued to make payments to RWS by depositing cash into RWS’s account. His last payment was on 21 August 2015.

Parties’ cases

RWS’s claim is for sums owing under the Credit Agreements, interest and costs. At the time of trial, after partial payment by Mr Lee of $4,067,287 made between 23 August 2010 and 21 August 2015, and the deduction of $2,118 “Genting points” earned by Mr Lee during program play, $5,930,595 of the original $10 million drawn down under the Credit Facility remained outstanding.¹⁸

Mr Lee does not dispute the calculation of the amount claimed as outstanding. His defence comprises primarily two arguments. First, he submits that the Credit Agreements are voidable, because he was intoxicated when he signed them, and did not understand the nature and effect of the transaction he was entering into.¹⁹ He contends that he has successfully rescinded the Credit Agreements.

His second line of defence is that the Credit Agreements are null, void and unenforceable under the Civil Law Act (Cap 43, 1999 Rev Ed) (“CLA”). He argues the exemption provided by s 40(c) of the Casino Control Act (Cap 33A, 2007 Rev Ed) (“CCA”) to s 5 of the CLA is inapplicable because RWS failed to comply with regulations 6(a) and 12 of the Casino Control (Credit) Regulations 2010 (S 53/2010) (“the Regulations”), issued under s 108 of the CCA. Regulation 6 requires a request for credit, which Mr Lee submits that he did not make. Rather, it was Mr Tan, and the Casino’s staff, who had persistently offered him credit, despite his repeated rebuffs.²⁰ Regulation 12 requires the implementation of a credit policy. RWS’s credit policy is set out in its “Casino Credit Policy for Credit & Cheque Cashing Facility”, dated 3 March 2010 (“the Credit Policy”). Paragraph 2.A.1.1 of the Credit Policy states that the credit application must be supported by documents, including a “credit application form”. Mr Lee’s case is that the Credit Policy was breached because the Credit Agreements were “not legitimately completed”, as he was intoxicated, did not request for credit, and a RWS representative had recommended him for credit despite having no basis to do so.²¹ In the circumstances, since the Regulations were not complied with, ss 40(c) and 108 of the CCA do not apply, and the Credit Agreements are void by virtue of s 5 of the CLA.

Arising from these contentions, Mr Lee filed a counterclaim, asking for the return of sums paid to RWS.

RWS’s response is that Mr Lee failed to establish, on a balance of probabilities, that he was intoxicated when he signed the Credit Agreements. In particular, the inconsistencies in his evidence demonstrate his lack of credibility,²² and he did not adduce any evidence to corroborate his account. Furthermore, he did not adduce any objective evidence to show that Mr Tan knew or ought to have known of his state of intoxication.²³ In addition, Mr Lee failed to plead rescission as a remedy, and in any event, the requirements of rescission were not made out.²⁴ Indeed, Mr Lee had on many occasions affirmed his debt to RWS, by, inter alia, making partial payments, entering into the Settlement Agreement, and handing over 25 post-dated cheques made out to RWS.²⁵

Regarding regulations 6 and 12, it is RWS’s...