Close v Wilson

The statutory prohibition on gambling contracts does not make every associated payment irrecoverable. Under the Gaming Act 1892, a promise to repay money advanced for betting is void where the money was paid in respect of wagering contracts. That remains so whether the arrangement is characterised as agency, loan or joint venture.

Restitution is distinct from enforcement. Money received as betting winnings on another’s behalf may be recovered. So may money diverted to the recipient’s own purposes, because the claim concerns misuse of the money rather than enforcement of the betting agreement.

In July 2007, Gary Close paid £20,000 to Colin Wilson for betting purposes. Close alleged that the money was advanced on terms requiring its return, with a specified return. Wilson maintained that there was no repayment guarantee and that the money had been lost through unsuccessful betting.

HH Judge Bullimore dismissed Close’s claim in the Barnsley County Court, treating the arrangement as unenforceable under the Gaming Acts 1845 and 1892. The judge did not make definitive findings about the precise terms of the arrangement or the use of all the money.

The appeal concerned whether Close could recover the full sum if repayment had been promised, and whether he could recover any balance used for successful bets or for Wilson’s own purposes.

1. The Court of Appeal, in a judgment given by Toulson LJ and agreed to by Wilson LJ and Arden LJ, allowed the appeal on the second issue, set aside the judgment and ordered a retrial before another judge.

2. The court applied the law in force when the money was advanced. Although Gambling Act 2005 s 335(1) generally removed gambling-related contracts as a bar to enforcement, it had not come into force when the advance was made in July 2007. The relevant provisions were therefore s 18 of the Gaming Act 1845 and s 1 of the Gaming Act 1892.

3. The agreement itself was not a wagering contract within s 18 of the 1845 Act. However, the assumed promise to repay the £20,000 fell within s 1 of the 1892 Act. It was a promise to repay money paid in respect of bets to be placed. This conclusion did not depend on whether the relationship was characterised as agency, loan or an individual joint venture. The authorities concerning agency, wagering payments and loans supported that analysis, including Tatam v Reeve [1893] 1 QB 44, Saffery v Mayer [1901] 1 QB 11, MacDonald v Green [1951] 1 KB 594 and Al Tamimi v Khodari [2009] EWCA Civ 1109.

4. The judge was wrong to treat the use of the entire £20,000 as immaterial. If money was used for successful bets, Close could recover the proceeds under restitutionary principles. If money was used for Wilson’s own purposes, Close could likewise recover it. Such recovery would not enforce the void agreement, but would recover money put to an extraneous use. The factual issue therefore required retrial.

• Court of Appeal (Civil Division): allowed the appeal on the restitution issue, set aside the County Court judgment and ordered a retrial before another judge: [2011] EWCA Civ 5.
• Barnsley County Court: HH Judge Bullimore dismissed the claim on the basis that the betting arrangement was unenforceable under the Gaming Acts 1845 and 1892.