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Landmark High Court Ruling On US Judgment Against Singapore Gambler
December 2008 | Litigation & Arbitration | Litigation Brief

Introduction 

In a recent landmark ruling, the Singapore High Court ordered a Singaporean gambler to repay his gambling debt of S$6.3 million to a Las Vegas casino. The order was made pursuant to a Singapore action to enforce the US judgment obtained by the casino against the gambler.

The decision

Representing the casino, Rodyk partner Foo Maw Shen (together with partner Daryl Ong and associate Ng Hui Min) presented extensive arguments before Justice Chan Seng Onn in Desert Palace Inc (doing business as Caesars Palace) v Poh Soon Kiat [2008] SGHC 144 (the “Caesars Palace case”). In the first Singapore case dealing with this specific issue, the learned Judge confirmed that such foreign judgments (notwithstanding their being founded on a gambling debt) can be validly recognised and enforced under the common law in Singapore.

Prior to this decision, the Singapore courts, in a series of claims by gambling operators against gamblers, had made it clear that a gambling debt was not a loan recoverable by way of a court action in Singapore. In particular, the court in the case of Star City Pty Ltd v Tan Hong Woon [2002] 2 SLR 22 (the “Star City case”) held that while gambling per se is not contrary to the public interest in Singapore,

“…it is contrary to public policy for the courts to be used by casinos to enforce gambling debts disguised in the ‘form’ of loans. Valuable court time and resources that can be better used elsewhere are wasted on the recovery of such unmeritorious claims. The courts of justice must remain out of bounds to claims for moneys won upon wager, however clearly or covertly disguised.”

Following this series of decisions, the Singapore Court of Appeal, in the 2004 case of Liao Eng Kiat v Burswood Nominees [2004] 4 SLR 690 (the “Burswood case”), recognised an Australian judgment obtained by a casino operator for gambling debts against a Singaporean gambler and allowed the Australian judgment to be registered. The registration was made pursuant to the Reciprocal Enforcement of Commonwealth Judgments Act (the “Act”) which allows judgments from commonwealth countries to be registered in Singapore if certain conditions are met.

The court in the Burswood case noted that other nations did not view the recognition of foreign judgments on gambling debts as being against fundamental principles of justice and morality. It further noted that the statement made in the Star City case that gambling per se is not contrary to the public interest in Singapore was bolstered by the fact that Singapore’s societal attitude towards gambling had evolved even further since the Star City case was decided. It is clear that the court took into account the fact that, at that time when the Burswood case was decided, the Singapore government was seriously considering building a casino here. So far as public policy is concerned, the court went further to state that the prevalent conception of good morals in the Singaporean community at large would be against Singaporeans who ran up gambling debts in overseas jurisdictions and sought to evade their responsibility for those debts when judgment had been issued against them.

In the Caesars Palace case, Justice Chan held that the US judgment obtained by the Las Vegas casino to recover the gambling debt from the Singaporean gambler could be validly recognised and enforced by a Singapore court. At the outset, the learned Judge noted that, while he was bound by the series of Singapore cases refusing to enforce gambling debts incurred overseas, there was no decided Singapore case which precluded him from allowing a claim or an action brought in Singapore upon a foreign judgment which was founded upon a gambling debt.

While recognising that the Court of Appeal in the Burswood case allowed the registration of the Australian judgment because of the Act, Justice Chan took the view that there was no sensible reason for distinguishing between the relevant public policy considerations at common law and under statute for enforcement actions based upon a foreign judgment obtained on a gambling debt. Instead, the learned Judge took the view that public policy in Singapore ought not to favour the evasion of foreign judgments by persons who borrowed money abroad for the purpose of gambling abroad and, after having lost those borrowed monies, sought to evade responsibility under a judgment which had been successfully obtained against them in a foreign court.

While such foreign judgments are based on gambling debts that the Singapore court would not enforce (if actions for their recovery were brought in Singapore), the learned Judge opined that foreign court judgments should be accorded the appropriate level of deference and respect. Accordingly, these judgments should be recognised and enforced in Singapore.

Justice Chan concluded that the US judgment in the case before him could be validly recognised and enforced under the common law, notwithstanding that the statutory regime for the recognition and enforcement of foreign judgments (in Singapore) was inapplicable.

The future

Following Justice Chan’s decision, casino operators overseas seeking to recover gambling debts incurred by Singaporean gamblers are likely to obtain judgment against the gamblers in their own jurisdiction and then proceed to enforce the foreign judgment in Singapore. Such judgments can be validly recognised and enforced in Singapore regardless of whether they are obtained in a Commonwealth jurisdiction or otherwise.

The more interesting question is whether this decision and that in the Burswood case have, in effect, undermined the public policy enunciated in the Star City case such that it is now permissible for a foreign casino to bring an action in Singapore to enforce gaming debts. Until the Court of Appeal definitively decides this issue in an appropriate case (and departs from its previous decision in the Star City case), the Star City case remains the authority on such claims.