Aspinall's Club Limited v Lester Hui Chun Mo

Incapacity through intoxication is established only where the person did not understand the general nature of the transaction and the other contracting party knew, or ought to have known, of that incapacity. The burden rests on the person asserting incapacity. Drunkenness is a matter of degree, and unwise gambling does not itself establish incapacity.

In assessing whether a casino should have stopped gambling, the relevant question is whether the customer displayed observable signs of intoxication sufficient to engage the casino’s responsible-gambling obligations. The ordinary civil standard of proof applies. A signed blank cheque may be completed within a reasonable time and in accordance with the authority given. Script cheques exchanged for gambling chips may constitute valid negotiable instruments, and the underlying loan obligation survives dishonour unless the cheque was accepted in absolute satisfaction.

Aspinall’s Club Limited claimed payment of £589,724, plus interest, from Lester Hui Chun Mo. The claim relied on a dishonoured personal cheque, sections 47 and 57 of the Bills of Exchange Act, and alternatively on contracts arising from the provision of gambling chips in exchange for script cheques.

Mr Hui alleged that he had become blackout drunk after alcohol was served at the Club. He contended that he lacked capacity to sign the cheques or enter loan agreements, that the Club knew or ought to have known of his condition, and that permitting him to gamble breached the applicable licensing requirements.

The central issues were whether Mr Hui was sufficiently intoxicated to lack contractual capacity, whether that condition was apparent to the Club, whether the regulatory obligations had been breached, and whether the cheque and loan claims were enforceable.

1. Standard of proof. The allegations were serious but the proceedings were not quasi-criminal. The ordinary balance of probabilities applied. The seriousness of the allegations could be relevant to inherent probabilities and the cogency of evidence, but did not alter the standard.
2. Factual findings. Mr Hui had consumed a substantial amount of alcohol, but had significantly exaggerated the amount and had not established that he drank Mao Tai with Mr De Lima. His conduct, betting history, interactions with staff and ability to drive home did not demonstrate that he was at the extreme end of intoxication. The Club’s staff did not know, and had no sufficient reason to know, that he was too intoxicated to gamble.
3. Capacity. The burden was on Mr Hui to establish both lack of capacity and the Club’s knowledge of it. Capacity is transaction-specific and requires an ability to understand the general nature and effect of the transaction. Mr Hui retained capacity to gamble and sign the script cheques. His decisions may have been unwise, but that did not invalidate them.
4. Regulatory obligations. The Club’s policies and licensing requirements required intervention where a customer displayed sufficient signs of intoxication. On the facts, no such observable signs were established. There was therefore no breach requiring Mr Hui to be stopped from gambling.
5. Cheques and loan. The script cheques were valid negotiable instruments. Mr Hui had authorised the Club to complete and present the retained blank cheque, which was completed within the authority given. The cheque was dishonoured, giving the Club an immediate right of recourse and entitlement to the debt and interest under sections 47 and 57 of the Bills of Exchange Act 1882. Alternatively, the Club succeeded on the implied loan agreements arising from the exchange of gambling chips for script cheques.

The claim succeeded. The parties were directed to draw up a draft order.