Aspinall's Club Ltd v Al-Zayat

By this appeal the Defendant challenges an order of David Steel J giving summary judgment in favour of the Claimant on a cheque for £2 million drawn by the Defendant, which represents sums staked and lost by the Defendant in the course of gambling at the Club operated by the Claimant on the night of Friday 10 March 2000. The Defendant contends that either at the time the cheque was drawn and handed over to the Claimant, or thereafter, or both, the Claimant infringed the prohibitions in section 16 of the Gaming Act 1968 on the provision of credit for gaming, and that for this reason the sum which would otherwise be due on the cheque is not recoverable. At this stage he contends that he has, at least, a real prospect of succeeding in that defence to the claim, and that therefore the judge was wrong to give judgment under Part 24 against him.

The Defendant had been a member of the Club since 1994, and had gambled frequently, and on a large scale, since then, as he continued to do until April 2006. In the course of these twelve years he lost over £23 million. His loss on the night of 10 March was the largest that he suffered in a single gaming session.

During that session the Defendant drew four successive cheques of £500,000 each in exchange for gaming tokens. These were referred to as script cheques; another name is house cheques. They were written on blank cheque forms held by the Claimant, so that all details had to be handwritten: the bank on which they were drawn, the relevant branch, the account number, the name of the account holder, as well as the date, the identity of the payee and the amount of the cheque. No doubt the Claimant was only prepared to proceed in this way because it had good reason to suppose, from past dealings, that the Defendant did have an account, with the given number, at the relevant branch of the bank named on the cheque.

In the course of the gaming session the Defendant lost all the £2 million worth of gaming tokens that he had acquired in return for these four cheques. According to his Defence, he requested that the croupier be changed several times during the session, and although he was told on each occasion that there was no other croupier available, at 3.30 am he discovered that other croupiers were available. His case is that he became angry at this discovery, and requested the return of the four script cheques, contending that he ought not to have to pay the £2 million which they represented. That contention on his part (to which, of course, the Claimant did not accede) is identified in the Defence as “the Dispute”. He then alleges that an employee of the Claimant brought to him a pre-printed cheque drawn on an account of his, filled out in the amount of £2 million in favour of the Claimant, but not dated. The Defendant did sign that cheque, and received the four script cheques back in return, but he contends that, before signing it, he pointed out that it was not dated, and said he would only sign it on the understanding that it would not be dated and nothing would be added to it, and it would not be presented, unless the Dispute was resolved. It is alleged that the employee of the Claimant accepted the cheque from him, saying nothing to disagree with the Defendant’s assertion as to the basis on which he had signed it, and then returned the four script cheques to him. By implication, it is said, the Claimant thereby agreed to his stipulation as to what should (or rather should not) happen to the cheque.

Those facts are the basis of the Defendant’s first line of defence, which is that the Claimant provided credit to him in a way which is inconsistent with section 16 of the 1968 Act, when it accepted the substitute cheque from him and returned the four script cheques to him.

Later on 11 March the Defendant countermanded the cheque, and he also sent a fax to the Claimant, in which he said:

For its part, on Tuesday 14 March the Claimant caused the cheque to be presented, by which time it bore the date 10 March. It was not paid, because of the Defendant’s orders not to pay.

The present claim was brought only three days before the end of the 6 year limitation period for a claim on the cheque. During much of that time the Claimant permitted the Defendant to continue gambling at its club, though always requiring payment in cash or on a third party’s account, so as not to do anything which might amount to providing him with credit directly for the purpose of the continued gaming. During this period he lost more than a further £10 million. In February 2002 the Claimant wrote to the Defendant referring to discussions which had taken place a year before about the £2 million debt. Mr Osborne, managing director of the Claimant, said in the letter that at that earlier meeting the Defendant had “asked us to allow you one year, during which time you would continue to play here and would make repayments from winnings”. He said that this had not happened, with no payments, few visits and none recently. He asked for a repayment schedule.

In his witness statement, Mr Osborne referred at paragraph 18.5.1 to the discussions in 2001 and to his letter, and said that the Defendant had continued to gamble at the club and had made winnings, but had not paid any part of the £2 million debt. He went on to say, in paragraph 18.5.2:

The Defendant in his witness statement denies ever discussing payment of the whole amount of the cheque, accepting only that there were some discussions about his paying half of it. He said in paragraph 31:

The Defence as it stands does not set up a clear ground of illegality based on the events since 10 March 2000, but Mr Lord has put forward a draft Amended Defence in which the point is taken that the Claimant’s conduct since 10 March 2000, and in particular the agreement to allow the Defendant to continue gaming at the club, with no steps being taken for the time being to recover the £2 million, amounted to a breach of section 16 of the 1968 Act. In addition, to the extent that the Claimant relies, as an alternative to a claim on the cheque, on a claim on the underlying loan agreement, the Defendant seeks to contend that the loan agreements are null and void under the Gaming Act 1892.

The central point in the case turns on part of section 16 of the Gaming Act 1968, as it was in March 2000. The 1968 Act has since been repealed but this does not affect the present proceedings.

That section is within Part II of the Act, which deals, among other things, with gaming on premises licensed under the Act, which was supervised by the Gaming Board for Great Britain. The Part includes a number of provisions of a regulatory nature, limiting who may take part in gaming, what games may be played, what charges may be imposed, and as to the regulatory powers of the Board. Section 23, which is also within Part II, makes contraventions of many of the provisions of the Part an offence:

We heard submissions as to whether section 16 is concerned with civil liability or rather with criminal offences under section 23. The references to older legislation in sub-section (4) make it clear that the section does, among other things, have consequences for civil liability. The 1710 Act (“an Act for the better preventing of excessive and deceitful gaming”) renders void any security given for (among other things) money lent for gaming. The 1835 Act amended this so that such securities are not void but are deemed given for an illegal consideration, so as to protect an innocent endorsee or holder in due course. The 1845 Act, by section 18, renders all contracts by way of gaming or wagering null and void. Section 1 of the 1892 Act, relied on by the Appellant, is as follows:

All of these provisions, therefore, are concerned with civil liability. Section 16 of the 1968 Act in turn, while it certainly does create offences, also excludes from the scope of those offences certain limited transactions by way of credit. It seems to me clear that, in so doing, it validates those transactions in terms of civil rights and obligations; correspondingly a transaction not so validated is illegal, because it is in breach of the prohibition in the section, and this illegality has the normal consequences in terms of civil rights and obligations.

Section 16(1) prohibits the provision of credit by a licence holder in two respects: first for enabling any person to take part in gaming at the licence holder’s premises, and secondly in respect of any losses incurred by any person in such gaming; thus, both before and after the gaming. Moreover the prohibition is not just of the giving of credit; it extends to releasing, or discharging on another’s behalf, the whole or any part of a debt. It is, however, subject to limited exceptions.

Sub-section (2) prohibits the giving of tokens in return for a cheque unless certain conditions are fulfilled, but provides that, if those conditions are fulfilled, then the prohibitions in sub-section (1) are not contravened. The conditions are that the cheque must not be post-dated, and that tokens must be exchanged for it at the same rate as if it were cash. A post-dated cheque is not defined in the Act, but the sense is clear: if the cheque were dated, say, a week after the date on which it was drawn, then credit would in effect be given for that week. It is not suggested that the four script cheques failed to satisfy these conditions.

Subsection (2A) is relevant to the substituted cheque for £2 million. It prohibits the acceptance, in redemption of cheques which had been accepted in exchange for tokens, of a substitute cheque unless certain conditions are satisfied; these include that the substitute cheque must not be post-dated. If the conditions are satisfied, then the return of the original cheque in exchange for the substitute cheque does not infringe sub-section (1).

Subsection (3) is not expressed in the same way. It obliges the licence holder who has accepted a cheque in exchange for tokens, or a substitute cheque, (but not, by virtue of (3A), a redeemed cheque) to cause the cheque to be delivered to a bank for payment or collection no more than two banking days later. The Claimant did so in the present case, as regards the substitute cheque, but we heard some argument as to what the consequences would have been if it had not done so or, as the Defendant said, of its having agreed not to do so.

Section 16 has been considered in several cases shown to us, reported and unreported. In R v Knightsbridge London Crown Court ex parte Marcrest Properties Ltd [1983] 1 W.L.R. 300 the Court of Appeal held that a practice whereby a licence holder repeatedly accepted cheques from persons whose previous cheques had been dishonoured, in circumstances in which the licence holder knew that the new cheques would be dishonoured on first presentation, amounted to a breach of section 16. The court said, at page 308H:

In that case there was a common expectation that the cheques would not be honoured on first presentation. If the drawer of a cheque has reason to believe that the cheque will not be honoured, but does not disclose this to the club, and the club has no other reason to suppose that the cheque will not be met, the drawer’s secret belief would not taint the cheque so that it would not comply with section 16. An extreme example of this is Aziz v Mayfair Casinos Ltd (decided by Hobhouse J, 30 June 1982, reported in The Times 6 July 1992), where the cheques were drawn on a bank which, to the knowledge of the punter but not of the club, did not exist. The judge held that the instruments were cheques and that the non-existence of the bank, unknown to the club, did not make them in breach of section 16.

The issue in Marcrest arose in the context of whether the licence holder was a fit and proper person to be issued with a licence. In Crockfords Club Ltd v Mehta [1992] 1 W.L.R. 355 section 16 was invoked as between parties to the transaction. The Defendant had gambled at Crockfords, using cheques drawn on a company to obtain chips, all of which he lost. The cheques not having been honoured, Crockfords sued the Defendant for repayment of the loan made to him on the issue of the chips, and applied for summary judgment. Henry J held that the cheques had been accepted in conditional repayment of the loan, so that on dishonour of the cheques, the Defendant remained liable on the loan. He then held that, just as section 16(2) and (4) validated the cheques, so they validated the underlying loan. The Court of Appeal in turn agreed with that conclusion. Lloyd LJ said, at page 365F:

Mr Lord based a submission on Lloyd LJ’s words “provided the cheque meets the requirements of subsection (2) and subsection (3), the giving of cash or tokens in exchange for the cheque does not contravene subsection (1)”, to the effect that, if the cheque does not meet those requirements, then the underlying loan is affected by the illegality. Since, on the facts of this case, there was no breach of the section at the stage when the four script cheques were given in exchange for tokens, it is not an exact antithesis of that put forward by Lloyd LJ. It raises a different question: if the underlying loan and the original cheques were validly made and accepted, but later the licence holder commits a separate breach of the section, for example by redeeming the cheques in exchange for a substitute cheque in circumstances which do not comply with section 16(2A), or by giving credit for losses in breach of section 16(1)(b), does that affect the pre-existing liability on the original loan?

We were shown one case in which this point was considered, and it was held not to affect the pre-existing liability: Ladup Ltd v Yazbeck, decided by Mr Patrick Bennett Q.C. as a Deputy High Court Judge in the Queen’s Bench Division, on 14 May 1985. The Defendant had gambled and lost money at the Claimant’s clubs. Some £29,000 was outstanding on cheques drawn by him which had not been honoured. An agreement was reached under which he would pay £13,500 in cash, and would reduce the rest of the balance by stages out of winnings. That was an illegal agreement under section 16, and it was not complied with except as to the £13,500. However, the Deputy Judge held that the admitted illegality of the later agreement did not affect the Claimant’s existing right to reimbursement for the cheques which had been dishonoured. He said:

Mr Goodall for the Claimant in the present case relies on that to say that nothing which happened later can prevent the Claimant from relying on the original four loans of £500,000 each, for which the four script cheques were given as conditional repayment.

The Defendant’s first group of contentions arise from the circumstances in which, according to his evidence, the substitute cheque was signed and handed over to the Claimant, the original script cheques being returned to him thereafter.

First, it is said that the substitute cheque was a postdated cheque, because it was not dated at the time when it was signed. Like the judge, I would reject this argument. It seems to me that a cheque is only a postdated cheque if, when signed and handed over to the payee, it bears a date later than the then current date. If it is then undated, then as a matter of general law the payee is entitled to insert a date thereafter. The fact that it is not dated does not prevent the payee from presenting it for payment immediately. Therefore it does not give the drawer any additional period of credit beyond the short period before prompt presentation.

The Defendant’s next arguments arise from his evidence as to what he said at the time he gave the cheque to the Claimant, having signed it. Mr Lord pointed out that there is no evidence from anyone on behalf of the Claimant who was present at the time, and therefore the Defendant’s evidence as to what he said is not contradicted. The court must proceed on the basis that the Defendant’s evidence of what was said and done may be accepted if the case comes to trial.

The judge rejected these arguments for several reasons. He held that a case based on the alleged agreement would fail for five reasons: (1) the Claimant’s response was, at most, silence, but that cannot (other than in exceptional circumstances) show agreement; (2) there was no consideration for the agreement alleged; (3) the agreement was insufficiently certain to be binding, because there was no way in which the dispute could be resolved, it being no more than a refusal to pay; (4) an agreement in such terms would have been illegal and therefore unenforceable, and is therefore improbable; (5) such an agreement could not be performed without a breach of section 16(3), so that it would have been illegal.

With all respect to the judge, it seems to me that the position is not so clear as he suggested. As for the first point, while it is not suggested that anyone on behalf of the Club expressly agreed (or disagreed) with what the Defendant says he said, what followed his statement, according to his evidence, was not mere silence. The Claimant accepted the substitute cheque and returned the four script cheques to him. It seems to me that it may well be arguable that, if it did so, the Claimant accepted the terms on which the Defendant put the substitute cheque forward. It could have refused to accept the substitute cheque, and have relied instead on the script cheques. The Defendant says that it was the Club that wanted the substitution made. It seems to me that, subject to proof of the facts, an agreement could be implied in these circumstances. The consideration for the agreement would have been the replacement of the script cheques (at the Claimant’s request, so the Defendant says) by a single substitute cheque.

There is more to be said for the proposition that the agreement was too uncertain. Since the agreement would render it very likely (even if not inevitable) that there would be some breach of section 16 in relation to the cheque, even if only of section 16(3), and since the Claimant had the script cheques which were safe from attack at that time, there is no obvious reason why the Claimant should have accepted the substitute cheque on the terms which the Defendant says he imposed, which gave him, in effect, a veto over presentation of the substitute cheque. That, however, is a point on the facts, on which the Defendant’s risk is that he might lose at trial because his evidence might not be accepted. That is not an adequate reason to conclude that this defence has no sufficient prospect of success.

I agree that such an agreement would have been illegal and unenforceable, and that it may well be improbable that such an agreement was come to. Nevertheless, to make the agreement would, arguably, have involved the Claimant in allowing to the Defendant credit in respect of losses incurred by him in gaming at the Claimant’s premises. This last point raises essentially the same point as arises from the Defendant’s second group of arguments, based on later events. I will consider this point in that context.

The judge observed that, even if such an agreement had been entered into, the substitute cheque was a valid and unconditional order to pay, and therefore valid as a cheque, which the bank was bound to pay on presentation, subject to the prior countermand. Mr Goodall showed us Roberts & Co v. Marsh [1915] 1 KB 42 to this effect, which had also been relied on by the judge. It does not seem to me that this case, which did not concern provisions involving illegality, provides an answer in itself to the proposition that an agreement such as the Defendant alleges would have been in breach of section 16(1)(b). If such an agreement was reached, then the substitute cheque would, despite its apparent validity as a cheque, have been one as to which the parties did not have a common intention that it would be paid on first presentation within 2 banking days. It could therefore be seen as a sham, comparable in principle to the cheques under consideration in Marcrest.

In the circumstances described above, Mr Lord on behalf of the Defendant argues that the Claimant allowed credit to the Defendant in respect of his gaming losses, that is to say the £2 million, by encouraging him to continue gaming at the club, in the hope that the club would be paid eventually, and no doubt that it would also gain by the Defendant’s losses on his continued gaming. He points out that section 16 is infringed if credit is allowed, even if this is not pursuant to an agreement. It is therefore no answer to say, as the judge did, that there was no agreement for repayment of the £2 million over a period. Even if there was no such agreement, the Claimant’s own evidence suggests a deliberate policy decision – which on the Defendant’s evidence was, in effect, communicated to him – not to seek to enforce liability on the cheque while the Defendant continued to gamble at the club.

It seems to me that the terms of Mr Osborne’s letter dated 13 February 2002 and of paragraph 18.5.2 of his witness statement provide rather clear evidence that the club did allow him credit for the £2 million. Like the judge I would doubt whether merely not issuing proceedings against the Defendant for recovery of the £2 million for almost 6 years would have been enough, by itself. But that is not this case. The parties had continuing dealings, during which, the Defendant is entitled to contend, the Claimant did give him further credit.

Mr Goodall took issue with this on two grounds: first that, even if credit was given, it was not given in respect of any losses incurred by any person in the gaming, and secondly that, even if it was so given, this did not invalidate the previous valid underlying loans – the same argument as I have mentioned above by reference to Ladup Ltd v Yazbeck.

As for the first point, the question is this. Suppose that, as here, the Defendant gambles at the Claimant’s club, having exchanged valid cheques for tokens, with no breach of section 16, and loses all the tokens. Suppose then that the Defendant substitutes a new cheque for the cheques originally drawn, and does so in circumstances which satisfy section 16(2A), and that the substitute cheque is presented in due time to comply with section 16(3) but it is not honoured on presentation. The Defendant is then liable on the substitute cheque, as well as on the underlying loans, for which the substitute cheque constitutes conditional payment. The underlying loans fall within section 16(1)(a), having been made, before the relevant gaming took place, for enabling the Defendant to take part in the gaming. Is the Defendant’s debt in respect of the substitute cheque a debt “in respect of any losses incurred by any person in the gaming” so as to be within section 16(1)(b)? Apart from the relevance of the continued gaming (to which I will refer later, in paragraph [45]), it would be difficult to argue that this debt arose from credit given for enabling the Defendant to take part in gaming. Thus, unless the debt falls within section 16(1)(b), it would not be caught by the section at all.

If the Claimant’s submission is right, so that the extra credit given was not given in respect of gaming losses, then the scope of section 16(1)(b) would be extremely limited. It would only apply to new credit given after the incurring of the losses, and not to the much more likely case of further credit given by the extension of existing credit previously given to enable the person in question to take part in the gaming. It seems to me that, on the facts of the present case, the Defendant’s liability on the substitute cheque (assuming that otherwise it satisfied section 16) was a debt in respect of losses incurred by the Defendant in the gaming in question. Therefore, if the Claimant provided or allowed further credit, or for that matter released the debt or any part of it, that would fall within section 16(1)(b).

Mr Goodall argued that, on the Defendant’s reasoning, the scope of section 16(1)(b) would be far too wide, because credit might be given which was not related to the gaming, having regard to the words “any losses incurred by any person”. I have no doubt that the generality of those words is deliberate. It is, however, limited by the fact that the losses must have been incurred in gaming at the licensed premises, and the credit must be provided by the licence holder or by someone on his behalf or by arrangement with him. This does not seem to me to be a point of any force for the Claimant.

Mr Goodall also pointed out that conduct in breach of section 16(1) amounts to an offence under section 23, and submitted that on general principles, those involved in gaming need to be able to tell with certainty what conduct does infringe the section and amounts to an offence, and what does not. He argued that it would be difficult to tell whether the section had been infringed if a club left a debt outstanding such as that on a dishonoured cheque: what is it that would amount to giving further credit? I can see that there may be cases where it may not be clear on the facts whether a club has given further credit. In this case, however, the Claimant’s conduct referred to in paragraph 18.5 of Mr Osborne’s witness statement seems plainly capable of amounting to allowing further credit.

The next question is that addressed in Ladup Ltd v Yazbeck, namely whether such a breach of the section, in relation to a debt which was otherwise valid and enforceable (whether one considers the underlying loan or the cheque) affects the validity of that debt. Mr Goodall submitted that the effect of a breach of section 16(1)(b) in these circumstances was that an offence would be committed, which would no doubt be relevant for regulatory purposes, but that it would have no implications as regards civil liability. That is what Mr Bennett Q.C. held in Ladup Ltd v Yazbeck. With respect to him, I find that a surprising proposition. Given that section 16(1) does, in other respects, affect civil liability, and given that this part of the section is dealing (among other things) with exactly the same sort of operation as section 16(1)(a), namely the making of loans and allowing or providing credit, it seems to me that one would expect the consequences of a breach to be similar. The difference urged upon us is that, in this type of case, the club starts with an enforceable debt owed by the gambler, whereas at the earlier stage, under section 16(1)(a), the parties start with no obligations either way. I do not see why the effect of a breach of the section at the later stage should not be to render the credit so afforded illegal and therefore unenforceable thereafter, even if it would otherwise be the extension of credit previously given lawfully, which therefore had at that stage been enforceable. Mr Goodall seeks to rely on the underlying loans as having been lawful, and asks what can have happened to render them unlawful. The answer is that the credit afforded by them, which was necessarily limited in time, in that the cheques which were taken as conditional payment were required to be presented within 2 banking days, has been extended by the giving of further credit. Whether or not by agreement, the transaction has become a longer-term transaction; as such it is prohibited by the section, with the consequence that its enforcement is also affected by the prohibition.

I therefore respectfully disagree with Mr Bennett Q.C.’s view expressed in Ladup Ltd v Yazbeck, and with the judge’s conclusion in the present case. It seems to me that, on the Defendant’s case, the expressed conditions under which he handed over the substitute cheque, if accepted, even implicitly, by the Claimant, would have rendered the transaction in breach of section 16(1)(b) and would have invalidated not only the cheque itself but also, as from that time, the underlying loans.

That case depends, of course, on the findings of fact at the trial. It may be that the Defendant’s account of what was said at that time will not be believed. It is certainly difficult to see, in the clear light of day, why the Claimant should have agreed to it. It would have known that it could not afford to delay presenting the cheque, because of section 16(3). It would also have known that it could not do a deal with the Defendant under which it released all or any part of his liability on the cheque, because that itself would be a breach of section 16(1)(b). It does not follow that something of this kind may not have been said in the course of a heated dispute at the end of a long and late gambling session.

Regardless of the findings in that respect, however, the Defendant also seems to have a well arguable defence under section 16(1)(b) based on the Claimant’s own account of the dealings between them after March 2000, and the evidence in paragraph 18.5 of Mr Osborne’s witness statement. That account appears to describe a process, albeit not by agreement, of giving the Defendant credit in respect of a debt representing gaming losses.

There might be an argument that it also amounted to giving him credit for the purpose of enabling him to partake in further gaming at the Claimant club. He did not use the further credit directly for the purpose of the continued gaming, but it was extended to him in order to encourage him to continue gaming. This would raise a point of more general importance. I prefer not to express any view as to that since it is not necessary to do so for the purposes of this appeal.

Again the application of section 16 to the case depends on how the facts are found at any eventual trial. In this instance, however, the Claimant’s own evidence suggests that there was a breach of section 16(1)(b) after March 2000. In my judgment, if there was, then the effect of section 16 was to render the Defendant’s liabilities on both the £2 million cheque and the underlying loan or loans illegal and therefore unenforceable.

The Defendant also relies on an estoppel defence. I doubt whether this would entitled him to succeed if his other arguments did not provide him with a properly arguable defence. As they do, it is unnecessary to decide whether the estoppel could be a viable defence in itself.

By the Defendant’s proposed Amended Defence he would also rely on the Gaming Act 1892, to which I have referred at paragraph [14] above. In my judgment, the effect of that Act was subject to that of section 16 of the 1968 Act, while that was in force. As the Court of Appeal held in Crockfords v Mehta, section 16 validates not only the security (the cheque) but also the underlying loan, if the requirements of section 16 are met. It invalidates the cheque and the loan if they are not met. Accordingly, where section 16 applied, it was not necessary to consider the 1892 Act. Either the transaction was valid under the 1968 Act, in which case it was also valid for the purposes of the earlier legislation, or not, in which case it was unnecessary to consider the earlier Acts.

For the reasons which I have given above, I respectfully disagree with the judge on his conclusions on the issues arising from the events of 10 March 2000, other than that the substitute cheque was not a postdated cheque. As regards the later events, the Defendant’s case seems to have been put to us in a better developed and more focussed manner than it had been to the judge, as well as by reference to a better formulated statement of case, albeit only in draft. For the reasons which I have expressed above, I consider that those events also provide the Defendant with a defence which has real prospects of success. Accordingly I would allow the appeal.

Piqued at the club’s failure to change a croupier, Mr Al-Zayat, although he was undoubtedly good for the amount, dishonoured a cheque for £2m which he owed Aspinalls for gaming chips. Aspinalls, instead of burning their bridges with Mr Al-Zayat by suing him on his cheque, permitted him for another six years to go on gambling so that he could lose millions more pounds to them. Then, at the last permissible minute, they sued him. This much can be gleaned from each party’s own pleaded case. It reflects no credit on either of them.

Section 16 of the Gaming Act 1968 gave effect to an important object of social and public policy – to ensure that punters gamble only with money that they have, not with money they hope to win or find elsewhere. Recognising, however, the unwisdom of expecting gamblers to carry large sums of money, Parliament included a provision for payment upfront to be made by cheque or by debit card, so long as any such cheque was presented for payment within two banking days. If it was so presented and was then dishonoured, it escaped the long-established bar on suing for gaming debts. This apart, nobody was to be allowed to gamble on credit, and s.23 criminalised any departure on the part of a casino from the statutory regime.

Why then did s.16(1), in addition to forbidding the grant of credit to enable people to gamble, need also to forbid it in respect of gaming losses? So long as punters gambled for cash (or used an acceptable cheque or authorised credit card), there could be no such losses. The principal instance of credit for gaming losses would appear to be where chips are purchased using a bad cheque or one which is dishonoured. But there can be no question of such credit taking the form of delayed presentation of the cheque, since after two banking days it became void by virtue of s.16(3). So there would appear to be substance in Mr Lord’s argument that forbearance to sue on a dishonoured cheque is the paradigm case under s.16(1)(b).

I would nevertheless accept Mr Goodall’s argument that an agreement to forbear from enforcement would itself be unlawful and therefore unenforceable. If so, there is no mileage in Mr Lord’s case, even if it were made out in evidence, that the cheque was accepted on an explicit undertaking not to present it for payment until and unless the dispute about the replacement of the croupier was resolved to Mr Al-Zayat’s satisfaction. But there seems little reality in the suggestion that the dispute was capable of mutual resolution except by Mr Al-Zayat paying the debt in full, since the club could not lawfully forgive any part of it and Mr Al-Zayat alone could decide when he was satisfied.

If it is eventually found, notwithstanding the contrary possibility envisaged by Lord Justice Lloyd, that there was neither an intelligible nor an enforceable agreement not to pursue his gaming debt, all that will remain to Mr Al-Zayat is the argument that the conduct of Aspinalls in extending credit for an extant debt and continued gaming by him disentitles the club to judgment on the cheque. Here, in agreement with Lord Justice Lloyd, I consider that Mr Al-Zayat has a case. The duration of the club’s forbearance to sue is striking, but it may be that this alone is not enough to establish an infringement of s.16. The reason for the forbearance is likely to be more important. If, as Mr Goodall submits and as I would accept, an agreement not to sue on a dishonoured cheque so long as the drawer continues to gamble for cash is unenforceable because unlawful, I find it hard to see why it is any less unlawful if the casino does the same thing unilaterally.

Recognising that this is one of those cases which have everything to do with law and nothing to do with justice, I too would allow the appeal.

I agree that this appeal should be allowed and that the Defendant should be permitted to defend this action at a trial. In particular, I agree with Lloyd LJ and Sedley LJ that the Defendant has an arguable defence that the claimant unlawfully extended credit to him contrary to section 16(1) of the Gaming Act 1968, based on the continued dealings between the parties after 10 March 2000. As to the acceptance of the substitute cheque, I have serious doubts as to whether the Defendant has real, as opposed to fanciful, prospects of success. However, I have ultimately reached the conclusion that, for the reasons given by Lloyd LJ, the Defendant should be allowed to defend the claim in this respect too.