Star City Pty Ltd (fka Sydney Harbour Casino Pty Ltd) v Tan Hong Woon

• Judgment Date: 25 February 2002
• Date: 25 February 2002
• Docket Number: Civil Appeal No 600093 of
• Court: Court of Appeal (Singapore)

Star City Pty Ltd (formerly known as Sydney Harbour Casino Pty Ltd)

Plaintiff

and

Tan Hong Woon

Defendant

[2002] SGCA 10

Yong Pung How CJ

,

Chao Hick Tin JA

and

Lai Kew Chai J

Civil Appeal No 600093 of 2001

Court of Appeal

Betting, Gaming and Lotteries–Transactions abroad–Whether s 5 (2) Civil Law Act (Cap 43, 1999 Rev Ed) procedural or substantive–Whether action to recover moneys won upon wager in foreign country enforceable–Conflict of Laws–Choice of law–Application of forum statute–Substance and procedure–Forum mandatory law–Characterisation of transaction for purpose of applying statute–Foreign casino claiming unpaid loans made to patron to enable him to gamble–Whether courts could re-characterise foreign transactions–Whether claim action to recover moneys won upon wager–Section 5 (2) Civil Law Act (Cap 43, 1999 Rev Ed)–Contract–Illegality and public policy–Gaming and wagering–Whether foreign gambling contract enforceable–Whether claim on dishonoured cheques enforceable if underlying gambling contract unenforceable–Section 5 (2) Civil Law Act (Cap 43, 1999 Rev Ed)

Star City Pty Ltd (“Star City”) operated a licensed casino in Sydney. In 1998, Tan Hong Woon (“Tan”) signed and handed over to Star City five house cheques, each for the sum of A$50,000, in exchange for chips for gaming at the tables. Tan lost the entire sum of A$250,000. When the house cheques were presented to Tan's bank for payment, they were dishonoured for lack of sufficient funds in his bank account. Subsequently, Tan made good to the casino A$55,160, leaving the sum of A$194,840 unpaid. Star City sought to recover this sum as unpaid loans made to Tan to enable him to gamble at its casino.

The trial judge characterised the action as one for money won upon a wager. He held that s 5 (2) of the Civil Law Act (Cap 43, 1999 Rev Ed) was a procedural section and applied as part of the lex fori to make such action unenforceable.

Star City appealed on the grounds: (a) that s 5 (2) of the Civil Law Act was not procedural in nature; (b) that it was not open to the trial judge to “re-characterise” the moneys as “moneys won upon a wager”; and (c) the cheques were separate and distinct transactions from the underlying contract and therefore the claim on them was good and enforceable.

Held, dismissing the appeal:

(1) Section 5 (2) of the Civil Law Act was a procedural provision which applied to all causes of action enforced in Singapore irrespective of where the gambling transactions took place: at [14].

(2) Singapore courts were entitled to look beyond the foreign characterisation of the transaction to determine its true nature as a matter of principle and policy because s 5 (2) of the Civil Law Act was a forum mandatory provision: at [29] to [32].

(3) Star City's claim against Tan was in essence an action to recover money won upon a wager and was unenforceable under s 5 (2) of the Civil Law Act: at [37] and [38].

(4) Star City could not claim upon the dishonoured cheques as the recovery on the underlying gambling contract was contrary to public policy: at [39].

Browne, In re; Ex parte Martingell [1904] 2 KB 133 (refd)

Bubb v Yelverton (1870) LR 9 Eq 471 (refd)

Chapman v Franklin (1905) 21 TLR 515 (refd)

CHT Ltd v Ward [1965] 2 QB 63; [1963] 3 All ER 835 (refd)

Crockfords Club Ltd v Mehta [1992] 1 WLR 355; [1992] 2 All ER 748 (refd)

Cumming v Mackie 1973 SLT 242; 1973 SC 278 (refd)

G & H Montage GmbH v Irvani [1988] 1 WLR 1285, CA (refd)

G & H Montage GmbH v Irvani [1990] 1 WLR 667; [1990] 2 All ER 225, HL (refd)

Hill v William Hill (Park Lane) Ld [1949] AC 530; [1949] 2 All ER 452 (refd)

Hope v Hope (1857) 8 De G M & G 731; 44 ER 572 (refd)

Hyams v Stuart King (a Firm) [1908] 2 KB 696 (refd)

Las Vegas Hilton Corp v Khoo Teng Hock Sunny [1996] 2 SLR (R) 589; [1997] 1 SLR 341 (distd)

Law v Dearnley [1950] 1 KB 400; [1950] 1 All ER 124 (refd)

Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548; [1992] 4 All ER 512 (refd)

Loh Chee Song v Liew Yong Chian [1998] 1 SLR (R) 297; [1998] 2 SLR 641 (refd)

MacDonald v Green [1951] 1 KB 594; [1950] 2 All ER 1240 (refd)

Monterosso Shipping Co Ltd v International Transport Workers' Federation [1982] 3 All ER 841 (refd)

Poyser v Minors (1881) 7 QBD 329 (refd)

Quarrier v Colston (1842) 1 Ph 147; 41 ER 587 (refd)

Quek Chiau Beng v Phua Swee Pah Jimmy [2000] 3 SLR (R) 761; [2001] 1 SLR 762 (refd)

Saxby v Fulton [1909] 2 KB 208 (refd)

Shoesmith, In re [1938] 2 KB 637 (refd)

Société Anonyme des Grands Establissements de Touquet Paris-Plage v Baumgart (1927) 96 LJKB 789; 136 LT 799 (refd)

Star Cruise Services Ltd v Overseas Union Bank Ltd [1999] 2 SLR (R) 183; [1999] 3 SLR 412 (folld)

Sun Cruises Ltd v Overseas Union Bank Ltd [1999] 2 SLR (R) 611; [1999] 3 SLR 404 (refd)

Woolf v Freeman [1937] 1 All ER 178 (refd)

Civil Law Act (Cap 43, 1999 Rev Ed) s 5 (2) (consd);ss 5, 5 (1), 5 (6)

Interpretation Act (Cap 1, 1999 Rev Ed) s9A

Bills of Exchange Act 1882 (c 61) (UK) ss 72, 72 (2), 72 (3)

Casino Control Act 1992 (Act 15 of 1992) (NSW)

Gaming Act 1845 (c 109) (UK) s18

Gaming Act 1892 (c 9) (UK) s1

Trade Union and Labour Relations Act 1974 (c 52) (UK) s 18

Foo Maw Shen, Ng Wai Hong and Deborah Koh (Ang & Partners) for the appellant

Jason Lim and Tan Kay Khai (Michael Khoo & Partners) for the respondent.

Judgment reserved.

Yong Pung How CJ

(delivering the judgment of the court):

1 This is an appeal brought against a decision of the High Court (reported at [2001] 2 SLR (R) 36) in an action for the recovery of certain debts. The trial judge disallowed the claim by Star City Pty Ltd (“Star City”) to recover what they alleged were unpaid loans granted to the respondent, Mr Tan Hong Woon (“Mr Tan”) for the purpose of gambling, on the basis that this was in fact a gaming contract and irrecoverable under s 5 of the Civil Law Act (Cap 43, 1999 Ed).

Background facts

2 The appellant, Star City operates the only licensed casino under the Casino Control Act 1992 of New South Wales, Australia. This casino is known as Star City Casino and is located in the Sydney suburb of Pyrmont. In accordance with the rules of its licence, Star City Casino has to comply with strict credit controls supervised by the Casino Control Authority of Australia. All gaming transactions within the casino are done with chips, other than slot machines, keno and totalisation betting. There are basically three ways by which a patron can obtain chips for gaming in the casino. The first is by simply exchanging cash for chips at either the counters or the gambling tables; the second will be through a deposit account and the third is through the cheque cashing facility (“CCF”). A patron who has been granted a credit facility hands over a cheque to the casino in exchange for a chip purchase voucher (“CPV”) of an equivalent value. The CPV will then be exchanged for chips for gaming at the tables. If the patron does not have his personal cheques with him, he may request to make use of counter cheques, known as “house cheques”. A house cheque is simply a document printed on a format which has been preapproved by the Casino Control Authority and is recognised by most banks in Australia. The patron after signing the house cheque hands it over to the counter staff in exchange for a CPV and consequently chips for gaming. It is also Star City's standard practice that, before handing over the CPV to the patron, the casino staff will inform the patron that his cheque, if drawn upon an account in Australia, will be available for redemption within ten working days after its acceptance. The patron can redeem his cheque by exchanging it with cash, bank drafts, CPV, chips or via the electronic transfer of funds of an equivalent value. If the cheque is not redeemed within the applicable time period, Star City will then present the cheque for payment. Without the CCF, the patron will not be able to gamble at the casino unless he has enough cash in hand to pay for the gambling chips or has sufficient funds in his cash deposit account.

3 The respondent, Mr Tan, is a seasoned gambler and a regular patron of Star City Casino. Between February 1996 to March 1998, he visited and gambled at the casino on at least 28 occasions and was treated by the casino as a “valued patron”. Mr Tan was also granted the use of the casino's CCF in February 1996. In March 1998, Star City provided Mr Tan and his wife with two complimentary air tickets to Sydney as well as a complimentary suite at their hotel for a few days. Between 26 and 28 March 1998, Mr Tan signed and handed over to Star City five house cheques, each for the sum of A$50,000, in exchange for CPVs and promptly proceeded to lose the entire sum of A$250,000. When these house cheques were presented to Mr Tan's bank for payment, all five were dishonoured for lack of sufficient funds in his bank account. Subsequently Mr Tan made good to the casino A$55,160, leaving the sum of AU$194,840 unpaid. The appellant is now seeking to recover this sum as unpaid loans made to the respondent to enable him to gamble at their casino.

The decision below

4 In a carefully-reasoned judgment, the trial judge examined the effect which s 5 of the Civil Law Act has upon gaming contracts made abroad. He was of the view that s 5 (1) of the Civil Law Act which renders all contracts of gaming or wagering void, has no extraterritorial effect and thus applies only to gaming contracts concluded in Singapore. Therefore, he held that s 5 (1) does not invalidate here the gaming contract which was concluded in New South Wales. However, s 5 (2) of the Civil Law Act is a procedural section and applies as part of the lex fori to make unenforceable in Singapore all actions to recover “money won upon a wager”, regardless of whether or not the wager was concluded in Singapore or elsewhere and whether or not the wagering contract, if made abroad, was lawful at...