Aspinall's Club Ltd v Al-Zayat

Under section 16 of the Gaming Act 1968, credit means time to pay for gaming losses. It may be provided unilaterally, but the deferral or postponement must be communicated to the punter. Mere forbearance from suing, without postponing the due date, is not credit. Credit allowed to pay earlier gaming losses does not necessarily enable later gaming: that expression refers to credit for purchasing the cash or tokens used to gamble. Unlawful credit under section 16(1)(b) renders the relevant debt unenforceable, but does not itself make otherwise lawful gaming illegal or establish a restitutionary claim for gambling losses.

The claimant casino sued for £2 million represented by a dishonoured cheque arising from the defendant’s gambling losses. The defendant alleged that, after the cheque was dishonoured, the casino unlawfully provided or allowed credit in respect of those losses, contrary to section 16 of the Gaming Act 1968. He also counterclaimed for approximately £10 million lost while he continued gambling.

The court found that the casino agreed in February 2001 to allow the defendant twelve months to repay the £2 million from future winnings. It found no further communicated postponement after February 2002. The central issues were whether the arrangement constituted credit under section 16(1)(b), whether it also enabled participation in gaming under section 16(1)(a), and whether the losses were recoverable in restitution.

1. Claim. The claim on the dishonoured cheque and underlying loan was dismissed. The agreement made in February 2001 deferred the defendant’s liability to repay the £2 million for twelve months. That deferral was communicated to him and therefore constituted credit in respect of losses incurred in gaming, contrary to section 16(1)(b) of the Gaming Act 1968. The resulting debt was unenforceable on the basis explained by the Court of Appeal in the same litigation.
2. Meaning of credit. Credit ordinarily means time to pay, by deferring or postponing the obligation to pay for chips already used or to be used in gambling. An agreement is unnecessary, since credit may be provided unilaterally. Communication is necessary, however. A debtor unaware of any deferral remains obliged to pay on the due date and has not been given or allowed credit.
3. Forbearance. Between March 2000 and February 2001 the casino merely refrained from suing while awaiting proposals for payment. After February 2002 it adopted a commercial strategy of delaying proceedings, but did not postpone the date on which the debt was payable or communicate any further credit. Mere forbearance from suing is therefore not the provision or allowance of credit.
4. Counterclaim. The counterclaim for restitution was dismissed. The phrase “for enabling any person to take part in the gaming” in section 16(1)(a) has the same relevant meaning as in subsections (2), (2ZA) and (2A): it concerns credit for purchasing the cash or tokens with which the person gambles. The twelve-month credit related to the earlier £2 million losses. The defendant purchased later cash or tokens with third-party cheques or debit-card payments. The credit therefore did not enable him to take part in the later gaming.
5. Even if the counterclaim had otherwise arisen, the gaming was not rendered illegal by the unlawful credit. The defendant also failed to establish a relevant mistake, and his payments for tokens were voluntary because gaming contracts were unenforceable. Both claim and counterclaim were dismissed.

• High Court (Commercial Court): summary judgment was previously given to the claimant by David Steel J, [2007] EWHC 362 (Comm).
• Court of Appeal: that judgment was set aside because the defendant had a real prospect of successfully defending the claim, [2007] EWCA Civ 1001.
• High Court (Commercial Court): after trial, the claim and counterclaim were dismissed.