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2025 MarsdenLR 5289
FEDERAL COURT PUTRAJAYA
NORDIN HASSAN, FCJ
DATO TING CHING LEE – Appellant
Versus
TING SIU HUA – Respondent
[Civil Appeal No: 02(f)-27-08-2024(Q)]
Gambling debts are unenforceable under Malaysian law as they violate public policy, and any agreements related to gambling are null and void.
Headnote:(A) Civil Law Act 1956 - Section 26 - Contracts Act 1950 - Sections 24 and 31 - Appeal concerning recovery of gambling debts - The appellant's claim for recovery of credit lines and rolling rebates for gambling at Naga Casino was deemed unenforceable as gambling debts under Malaysian law - The court emphasized that gambling contracts are null and void and against public policy. (Paras 14, 26, 34, 84, 92)
(B) Public Policy - Gambling activities are recognized as injurious to public welfare and the courts will not assist in the recovery of gambling debts. (Paras 84, 88, 92)
Facts of the case:
The appellant, a businessman, sought to recover debts related to gambling activities facilitated by the respondent, a junket operator, who arranged lines of credit for gambling at Naga Casino. The High Court dismissed the defamation claims against the respondent and ruled the counterclaim for recovery of gambling debts was illegal and unenforceable. (Paras 1-12)
Findings of Court:
The High Court's dismissal of the claims was affirmed regarding defamation, but the Court of Appeal erroneously allowed the counterclaim for recovery of gambling debts. The present court restored the High Court's decision. (Paras 16, 95)
Issues: The main issues included whether the credit lines constituted gambling debts and whether the claim was enforceable under Malaysian law. (Paras 22, 38)
Ratio Decidendi: The court found that the credit lines and rolling rebates were for the purpose of gambling and thus constituted unenforceable gambling debts under Malaysian law, reaffirming the principle that gambling contracts are against public policy. (Paras 34, 70)
Result: The appellant's appeal is allowed; the decision of the Court of Appeal is set aside and the High Court's decision is restored.
Key Points: - (!) (!) (!) (!) - (!) (!) (!) (!) - (!) (!) - (!) (!) (!) (!) - (!) (!) (!) - (!) (!) (!) - (!) (!) (!) (!) - (!) (!) - (!) (!) - (!) (!) (!)
What is the legal status of credit lines and rebates granted for gambling—are they enforceable debts or null and void under Malaysian law?
What is the correct approach to determine whether a credit facility tied to gambling constitutes a gambling debt (composite contract) or a genuine loan, and is it enforceable?
What is the impact of public policy on gambling-related contracts and the enforceability of gambling debts under Contracts Act 1950 and Civil Law Act 1956?
Introduction
[1] This is an appeal by Dato Ting Ching Lee, the appellant, against the Court of Appeal's decision to allow the respondent, Ting Siu Hua's counterclaim.
The appellant was the 1st plaintiff and the respondent was the defendant at the High Court . The respondent's counterclaim was for the recovery of monies for two lines of credit totaling USD1.5 million and the advance of rolling rebate for USD193,800.00 for gambling at Naga Casino, Cambodia.
[2] The pertinent and interesting legal issues in the present appeal concern the Malaysian's position on recovering monies related to gambling or wagering and the application of s 26 of the Civil Law Act 1956, and ss 24 and 31 of the Contracts Act 1950. Further, whether the present facts of the case, trigger the application of the said sections in light of the decision by the High Court in Wynn Resorts (Macau) S A v. Poh Yang Hong affirmed by the Court of Appeal and the application for leave to appeal to the Federal Court was dismissed.
[3] On 6 August 2024, the appellant's application for leave to appeal to this Court was granted on one question of law which is as follows:
"In construing whether any claim for monies given in the form of credit amounts to a gambling debt or otherwise, should the approach be the approach adopted by the Singapore Court of Appeal in Star City Pty Ltd (formerly known as Sydney Harbour Casino Pty Ltd) v. Tan Hong Woon [2002] 1 SLR (R) 306, ie to ascertain the overall purpose of the same by considering it in its entirety as a composite contract?"
The Background Facts
[4] The appellant is a businessman from Bintulu, Sarawak, and holds various positions in associations and social bodies in Sarawak.
[5] The respondent is a tour agent and since the year 2000, he was appointed as a promoter or junket by Huang Yu Kiung under the name of Huang Group to bring players to gamble at casinos. As a junket, the respondent was paid by Huang Group on a commission basis which essentially depends on the amount of collection of payments by Huang Group from the players that the respondent brought to gamble at the casinos.
[6] On 1 March 2014, Huang Yu Kiung, as STG Operator, and Naga World Limited signed an STG Operator Incentive Program Agreement ("STG Agreement") to conduct STG business. STG business as defined under cl 1.1 of the Agreement is the business whereby the STG operator's pool of players or group of players is brought to the physical premise of Naga Casino for wagering for benefits as specified in Schedule 7 of the Agreement.
[7] On 24 December 2014, while in Bintulu Sarawak, the respondent received a telephone call from one Ting Sing King inquiring whether he could arrange a gambling trip to Cambodia for his superior, the appellant, and a few others. After having discussed the details including the line of credit to gamble at Naga Casino Cambodia, the respondent arranged the trip for the appellant, Ting Heng Ngoung, Ngu Toh Yi, Lee Chew Sing, and Ting Sing King to Naga Casino Cambodia from 8 January 2015 to 10 January 2015 for gambling at the International Floor, level 6 of Naga Casino, Cambodia.
[8] Upon the request by the appellant, on 8 January 2015 he was granted a line of credit of USD1,000,000.00 to gamble at the Casino, and on 9 January 2015, a line of credit of USD500,000.00 was further given to him. In addition, on 10 January 2015, he was granted a rolling rebate of USD193,800.00. Ting Sing King on the other hand was given a credit line of USD50,000.00 to gamble and at Level 6 International Floor of the Casino, the casino chips were given to the appellant and others to gamble based on the lines of credit granted to them. Exhibits D4, D5, and D6 disclosed that Huang Group granted the lines of credits and the rolling rebate, and the documents were signed by Tan Hui Phin (DW2), the Supervisor of Huang Group at Cambodia in the Naga Casino.
[9] After the gambling trip to Cambodia and upon returning to Sarawak, the appellan
