COURT RULES IN FAVOUR OF HOUSE

COURT RULES IN FAVOUR OF HOUSE

Syafinaz explains a case on the registration of a foreign judgment for gambling debts

BACKGROUND FACTS

On 26 March 2014, Resorts World At Sentosa Pte Ltd (“RWS”) filed a writ of summons and statement of claim against Lim Soo Kok (“Lim”) in the Singapore High Court. After the cause papers had been served by substituted service on Lim and the time prescribed for entering an appearance had lapsed, RWS obtained a judgment in default against Lim on 8 December 2014 (“Singapore Judgment”).

The Singapore Judgment was registered by an order of the High Court of Malaya (“Order for Registration”) on 12 February 2015 under section 4 of the Reciprocal Enforcement of Judgments Act 1958 (“REJA”). The Order for Registration required Lim to pay the sum of RM1,530,212.48 (equivalent to S$572,363.00) with interest and costs to RWS.

The Order for Registration together with the Notice of Registration were personally served on Lim on 6 May 2015.

APPLICATION TO SET ASIDE THE ORDER

Lim filed an application to set aside the Order for Registration on the ground that the enforcement of the Singapore Judgment is contrary to public policy in Malaysia under section 5(1)(a)(v) of REJA as the Singapore Judgment is based on a gambling debt incurred in RWS’s casino in Singapore (“Setting Aside Application”).

On the other hand, RWS contended that the registration of a foreign judgment obtained in relation to a lawful gaming transaction in Singapore is not contrary to public policy under section 5(1)(a)(v) of REJA. RWS also contended that the legal position differed from one where a civil suit is filed in Malaysia to enforce a gaming debt.

The High Court agreed with RWS that a distinction must be drawn between suing on a gaming debt and the registration and enforcement of a valid foreign judgment under REJA. The Judge referred to the case of Jupiters Ltd (Trading as Conrad International Treasury Casino) v Gan Kok Beng & Anor [2008] 7 CLJ 715 where Vincent Ng, J held as follows:

… the applicant had merely applied to register a judgment legally obtained in England pursuant to the Reciprocal Enforcement of Judgments Act 1958, but had not sought to enforce a cause of action founded on a gaming or wagering contract – in which case the Lex Fori of the country where the cause of action is sought to be litigated would have to prevail. Surely, it would be entirely consistent with our public policy for our courts to accord due recognition to any reciprocal agreements between our country and another … In Ritz Hotel Casino, the defendants ought to be precluded from going behind the English judgment by submitting on our public policy. Ritz Hotel Casino and Aspinall Curzon ought to be distinguished from this case as those two cases only concern the registration of foreign judgments that has not only been provided for but sanctioned by statute, which enjoins our courts to allow registration if the papers are in order.”

The learned judge noted that decision of the High Court in The Ritz Hotel Casino Ltd & Anor v Datu Seri Osu Hj Sukam [2005] 3 CLJ 390 to set aside the registration of a foreign judgment for a gambling debt on ground that the registration contradicted Malaysia’s public policy had been overturned by the Court of Appeal.

The High Court then dismissed Lim’s Setting Aside Application on, inter alia, the following grounds:

(1)      RWS was availing itself of the right of reciprocity of registering a valid and lawful judgment of a foreign court as expressly provided under REJA;

(2)      RWS was not filing a civil suit to enforce the gaming debt; and

(3)      When a gaming transaction is lawful in the foreign country from which the judgment originates, the registration and enforcement of the foreign judgment is not against public policy in Malaysia.

Dissatisfied with the decision of the High Court, Lim appealed to the Court of Appeal.

THE COURT OF APPEAL’S DECISION

On 19 January 2017, the Court of Appeal unanimously dismissed Lim’s Appeal. The Court of Appeal held that there was no appealable error and agreed with the finding of the High Court that the registration and enforcement of the Singapore Judgment was not against public policy in Malaysia.

COMMENTARY

The High Court in this case was correct in drawing a distinction between a case where a party commences legal proceedings in Malaysia based on a cause of action that is founded on a gaming debt, as in Jupiters, and one that involves the registration and enforcement of a foreign judgment obtained with respect to a gaming debt under REJA, as in The Aspinall Curzon Ltd v Khoo Teng Hock [1991] 2 MLJ 484.

Jupiters Ltd

In Jupiters Ltd, the plaintiff commenced legal proceedings in Malaysia on six dishonoured cheques issued by the defendant to the plaintiff to settle debts incurred while gambling at a licensed casino operated by the plaintiff in Australia.

As the cause of action arising from the dishonouring of the six cheques was being litigated in Malaysia, the lex fori, i.e. the law of the country in which the action is brought, would be Malaysian law.

The court noted that section 26 of the Civil Law Act 1956 and section 31 of the Contracts Act 1950 stipulate, inter alia, that gaming or wagering agreements are null and void. As the cheques were issued to settle gambling losses owing to the plaintiff, the court held that they were given for no consideration by virtue of those statutory provisions.

Accordingly, the High Court ruled that the plaintiff’s claim against the defendant could not be sustained.

Aspinall Curzon

The defendant in this case appealed against the decision by a senior assistant registrar to register a judgment obtained by the plaintiff in England against him. The defendant said that the money which he owed the plaintiff was in respect of cheques that he had issued for moneys which he had lost while gambling at the plaintiff’s casino.

The defendant contended that the cheques were given for an illegal consideration and the contract was therefore void under section 24 of the Contracts Act 1950. The defendant also argued that the judgment should not be enforced as it was against public policy of Malaysia and cited section 31 of the Contracts Act, section 26 of the Civil Law Act and section 5(1)(a)(v) of REJA in support of this contention.

The plaintiff disputed the defendant’s contention. According to the plaintiff, the defendant had issued the cheques to obtain cash and gaming chips so that he could gamble at the plaintiff’s casino. The plaintiff submitted that even if the judgment was for a gambling debt, the gambling took place in the United Kingdom in a casino licensed under the UK Gambling Act 1968.

The Judge said that the cheques had been issued in exchange for cash and gaming chips for the purposes of gaming at a licensed gaming casino. Therefore, it was not for an unlawful purpose under the laws of England and the enforcement of the UK judgment could not be considered as being contrary to public policy in Malaysia. The defendant’s appeal was dismissed. 

THE LAST ROLL OF THE DICE?

Although Lim has failed on two occasions to set aside the registration of the Singapore Judgment, the matter has not ended. Lim has sought leave to appeal to the Federal Court on the question, “Whether on a true construction of Section 5(1)(a)(v) of the Reciprocal Enforcement of Judgment Act 1958, the enforcement of a foreign judgment based on a gambling debt is contrary to public policy of Malaysia.

Lim’s application for leave is set to be heard in May 2017. If leave is granted, Lim may yet have one last roll of the dice in this game of high stakes.

Writer’s email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Note: The decision of the High Court is reported as Resorts World At Sentosa Pte Ltd v Lim Soo Kok [2017] 1 CLJ 363. The Court of Appeal decision is unreported.

SUBJECT MATTER: CASE COMMENTARY

WRITER'S NAME: SYAFINAZ VANI

WRITER'S PROFILE:

Syafinaz is a Senior Associate in the Dispute Resolution Division of SKRINE. She holds a Bachelor of Laws degree from the University of London and a Master of Laws degree from University College London.

 

 
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