The Singapore International Commercial Court (“SICC”) recently struck out a A$43.2 million claim, believed to be perhaps the biggest in the history of gambling, brought by The Star Entertainment QLD Limited (“The Star”) against Dr Wong Yew Choy, a high net-worth individual. In arriving at its decision, the Court clarified the approach Singapore courts would take under s. 5(2) of the Civil Law Act (the “CLA”) as regards actions brought in Singapore for gaming debts incurred overseas.

The team comprising Mr Abraham Vergis and Mr Lim Mingguan from Providence Law Asia LLC successfully represented Dr Wong in the proceedings.

I. Background

Sometime around July 2018, Dr Wong visited The Star Casino in Queensland to play games of baccarat. The Star alleged that over the course of that visit, Dr Wong incurred losses of approximately A$43.2 million. After the visit, The Star then attempted to present for payment a cheque that Dr Wong had, on a separate occasion, provided to The Star Sydney, a different casino (the “Cheque”). The Star commenced proceedings to recover the A$43.2 million after payment on the Cheque was rejected.

Dr Wong, in his defence, countered that there was an agreement that he would not have to pay for any of the alleged losses (the “Agreement”). The Agreement arose from the fact that The Star’s dealers had committed errors during some of the games of baccarat. Further, Dr Wong alleged that he did not authorise The Star to complete or present the Cheque for payment.

Dr Wong also argued that s. 5(2) of the CLA prevented The Star from bringing its action in Singapore for sums allegedly won on wagers made by Dr Wong in Australia. In this regard, s. 5(2) of the CLA provides:

“(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…”

The Star applied for summary judgment, and Dr Wong applied to strike out The Star’s entire action on the basis of s. 5(2) of the CLA. Both applications were heard together by International Judge Jeremy Cooke.

II. The Decision

The Court dismissed The Star’s summary judgment application. The Court found that triable issues arose both as to (a) the existence of the Agreement and thus the alleged debt due; and (b) the validity of the Cheque and whether The Star had authority to complete and present the Cheque.

The Court granted Dr Wong’s striking out application. The Court found that s.5(2) of the CLA was a mandatory provision which applied to all proceedings brought before the Singapore courts, irrespective of where the gaming occurred, and the governing law of the gaming contract. As a result, and applying s. 5(2), the Court held that it could not countenance an action brought in respect of sums allegedly won on wagers in Queensland, Australia.

The central issue which the Court had to determine was whether gaming was contrary to Singapore public policy. In considering this, Newsflash November 2019 This update is for your general information only. It is not intended to be nor should it be regarded as legal advice. the Court considered a number of local authorities relating to s.5(2) of the CLA.

The Star argued that the present state of the law was best represented by the Court of Appeal case of Burswood Nominees Ltd v Liao Eng Kiat [2004] 2 SLR 436 (“Burswood”). In that case, the Court noted that the legislature had allowed for various types of legalized gambling (such as 4-D, TOTO etc) and took the position that gambling per se was not contrary to public interest in Singapore.

However, that position was criticized by the subsequent Court of Appeal case of Poh Soon Kiat v Desert Palace Inc (trading as Caesars Palace) [2010] 1 SLR 1129 (“Desert Palace”), where the Court noted in obiter that the existence of legalized gambling only meant that regulated gambling was not contrary to public policy, and that there was nothing to suggest a departure from the general policy against gambling encapsulated in s. 5(2) of the CLA.

In particular, the Court in Desert Palace noted that although gambling is not illegal at common law, s. 5(2) of the CLA makes all gambling debts, wherever incurred, irrecoverable by an action in Singapore.

The Star argued that the obiter statements in Desert Palace were not binding on the Court, and that the position in Burswood was therefore to be preferred. The Star also argued that it would be contrary to public policy to allow casino patrons to game abroad and return to Singapore to escape liability.

The Court found that while the comments regarding s. 5(2) of the CLA in Desert Palace were obiter, the comments were clearly expressed with full consideration of the public policy which underlaid the CLA. What that meant was that the clear words of s. 5(2) of the CLA must take effect.

The Court further noted that the legislature had created specific exceptions to the application of s. 5(2) of the CLA, but saw it fit not to exempt gaming debts incurred in casinos overseas.

III. Conclusion

Apart from providing clarification on how Singapore courts will treat actions based on gaming debts incurred overseas, this case is also instructive in its application of public policy considerations. In particular, the case makes clear that it is not sufficient to show that public policy permits, or is not contrary to, the activity in question (e.g. regulated gambling). The plaintiff must go further and demonstrate that the policy as implemented, e.g. in the CLA, should be impugned.

This case is also noteworthy for being the first SICC case, helmed by an international judge, to deal with issues of Singapore public policy.