Aspinall's Club Ltd. v Al-Zayat

A cheque given to replace gambling-session cheques is not post-dated merely because it was initially undated and later dated on or after the date of issue. An agreement restricting dating or presentation does not ordinarily prevent the cheque from operating as an unconditional order to pay. A sham exists only where all parties share an intention that the apparent legal rights and obligations should not arise. A gambling debt may also be enforced through the underlying loan, and mere forbearance to sue during the limitation period does not constitute the provision of further credit.

Aspinall’s Club claimed £2 million from a customer who had received gaming tokens in exchange for four £500,000 cheques during a gambling session. The cheques were replaced by an undated £2 million cheque, which was later dated and dishonoured after the defendant countermanded payment.

The defendant alleged breach of an agreement not to date or present the cheque, that the cheque was post-dated, that the transaction was a sham, and that the arrangements involved unlawful credit under the Gaming Act 1968. The claimant applied for summary disposal under CPR 3.4 and CPR 24.2.

1. Application granted. The claimant was entitled to judgment for the sum claimed. The defence disclosed no reasonable grounds and had no realistic prospect of success.
2. The substitute cheque was not post-dated within section 16(2) of the Gaming Act 1968. Under sections 3(4) and 13(2) of the Bills of Exchange Act 1882, an undated, ante-dated or post-dated cheque was not thereby invalid. A cheque dated on or after 10 March was either dated on that day or ante-dated, and an ante-dated cheque could not provide credit.
3. Even assuming an agreement not to date or present the cheque, the cheque remained a valid and unconditional order to pay. Silence did not ordinarily amount to acceptance, and the alleged agreement lacked consideration and certainty. An agreement requiring conduct contrary to section 16 would itself have been illegal and unenforceable.
4. The reasoning in R. v Knightsbridge Crown Court ex parte Marcrest Properties Ltd [1983] 1 W.L.R. 300 concerned repeated acceptance of cheques which the club knew would not be honoured. Those circumstances materially differed from the present case. The substitute cheque was not shown to be a sham. Applying the principle in Snook v London & West Riding Investments [1967] 2 Q.B. 786, a sham required a common intention by all parties that the apparent legal rights and obligations should not arise.
5. Independently, the claimant could enforce the underlying loans. The script cheques represented conditional repayment of loans made through gaming tokens. When the substitute cheque was dishonoured, the loans revived, applying Crockfords Club v Mehta [1992] 1 W.L.R. 355 and Homes v Smith [2000] Lloyd’s Reports (Banking) 139.
6. The claimant’s delay in suing did not provide further credit. The debt had crystallised and remained enforceable throughout the limitation period. Later gambling was funded by cash, debit cards or third-party cheques. The correspondence recorded an intended repayment arrangement but did not establish an enforceable agreement or unlawful credit.