Credit crunch

Aspinall’s Club Ltd v Al-Zayat [2008] EWHC 2101 (Comm) [2008] ALL ER (D) 13 (Sep)

We reported at 26/LL p120 that Mr Al-Zayat had been given leave to defend and counterclaim in an action based on his dishonoured cheque for £2m gaming losses and that over a period of 12 years, he had lost more than £23m at the claimant’s club. He had countermanded payment of his cheque, because he believed the gambling had not been conducted fairly, but nevertheless he continued to gamble, and lose, at the club after the claimant had agreed to allow him a year in which to repay the £2m and permitted him to continue to play. He did better in court than at the gaming tables when it was held that the granting of credit was in contravention of s16 of the Gaming Act 1968 (as amended), which rendered his liabilities on the dishonoured cheque and the underlying loan illegal and unenforceable. Credit might be provided unilaterally in the sense that a bank might state that it would defer or postpone the obligation to pay. Having regard to the purpose of s16, however, any such unilateral provision of credit must at least be communicated to the punter. When the claimant had assented to the defendant’s request to allow him one year to pay his debt out of winnings of the club, the claimant had deferred or postponed liability to repay and that decision had been communicated to the defendant. That exchange, therefore, amounted to providing or allowing credit contrary to s16(1)(b) and the claim on the cheque and the underlying loan agreement was consequently unenforceable. Accordingly, the claim was dismissed. The defendant’s counterclaim for restitution of sums lost during the period of unlawful credit also failed. Although the credit given to the defendant gave him the opportunity to gamble, this did not fall within s16(1)(a). It did not follow that the provision of credit to pay his losses enabled to the defendant to gamble during that period.