IN THE SUPREME COURT OF THE Case No CL 157/08
TURKS AND CAICOS ISLANDS
CASABLANCA CASINOS LTD
Hearing: 19 August 2009, 4 September 2009
Written reasons circulated: 14 September 2009
For the Plaintiff: Mr Jonathan Katan - Miller Simons O’Sullivan
For the Defendant: Mr Oliver Smith - Stanfield Green
1. I have before me the Plaintiffs Summons, dated 21st April, 2009 and filed pursuant to Order 14 Supreme Court, Civil Rules 2000, applying for final judgment against the Defendant for the amount claimed in the Statement of claim with interest and costs.
2. The Defendant opposes the application.
3. On 25th November 2008, a letter before action was sent to David Smith.1 In the letter the Plaintiff requested either payment of $530,500 within seven days or, in the alternative, acceptable security for the debt.
4. Proceedings were initiated by a Writ of Summons filed on 11th December 2008. The Plaintiff’s basic claim against David Smith is for (i) the sum of $530,500 being money lent to the Defendant by Casablanca Casinos Ltd by way of markers issued in return for gaming chips and plaques damages and (ii) interest pursuant to Section 101B of the Civil Procedure Ordinance.
5. On 22nd January 2009, the Defendant filed an Acknowledgment of Service, indicating an intention to defend part of the claim.
6. On 27th February 2009, the Defendant filed his undated Defence. Paragraph 2 of the Defence read: “Save in that it is admitted that certain sums are owed, paragraph 2 is denied as to the exact amount and the timeliness of the payment.” The Defendant did not admit any claim for interest and in addition pleaded a general traverse.
7. On 28th April 2009, the Plaintiff filed the Summons for Summary Judgment dated 21st April 2009, which I am considering herein. A hearing date was fixed for 17th June 2009. The filing of the Summons after the filing of the Defence does not preclude the Plaintiffs from applying for summary judgment.2 The Plaintiff filed an affidavit in support sworn by Andrew Mark Stephens on 15th April 2009. There were a number of Markers and a “VIP Marker Tracking Schedule’ exhibited to that affidavit.
8. The hearing on 17th June 2009 was adjourned by consent to a date to be fixed, as Mr Oliver Smith was involved in a trial in another Court. The Plaintiff was given leave to amend its name in the pleadings. The Defendant had requested, in correspondence dated June 16, 2009 to the Plaintiff, an extension of time “to the end of the week” to file his affidavit in response. As a consequence, and by consent, Mr Smith was directed to file his affidavit in reply in the summary judgment proceedings by close of business on 19th June 2009.
1Page 19/20 Exhibits to Plaintiffs’ bundle
2McLardy v Slateum (1890) 24 QBD 504 Pollock B at page 506
9. On 18th June 2009, David Smith filed his first affidavit which was purportedly sworn on 19th June 2009. The Plaintiff did not seek to take any point in regard to this apparent discrepancy. David Smith contended in the affidavit that there was a “genuine factual dispute” as “after reviewing the markers, I deny owing the following amounts” and details of the twelve disputed markers were set out. I note that those markers, when added together, make a total of $470,500, which leaves a balance of only $60,000.3 Although the Defendant had been provided with copies of the markers exhibited to the affidavit of Mr Stephens’ affidavit filed over a month and a half earlier, no specific mention was made in David Smith’s affidavit about contesting the veracity of the signatures set out therein. Mr Oliver Smith contends this was because of the short time that he had to file this affidavit. This is not a particularly meritorious submission, as, firstly, the Defendant had been served with Mr Stephens’ affidavit weeks earlier, secondly, he stated in the affidavit that he had the opportunity to review the markers and, thirdly, due to the fact that it was David Smith who had stated that he only required leave to extend time for filing the affidavit to the directed date.
10. On 12th August 2009, a Notice of hearing of the Summary Judgment Summons set for 19th August 2009 was issued.
11. It is only following service of the Notice and almost two months after the date of the first affidavit that Mr Smith filed his second affidavit and first raised any issue about the signatures on the markers. At paragraph 5 of the affidavit David Smith states: “The basis for my denying owing the amounts as reflected in the itemised list at paragraph 4 herein is that the various signatures reflected on those “Markers” are in fact not my signature.” David Smith does not go on to say or plead that the signatures are forged.
3 David Smith at paragraph 3 of his first affidavit and paragraph 4 of his 2nd affidavit wrongly lists Marker 1631 $20,000 as being for $30,000.
12. On 18th August 2009, the Plaintiff filed affidavits from Tamas Kovacs and Zoltan Kovacs in which they gave details of markers they state were issued to David Smith and signed by themselves and David Smith.
13. On 18th August 2009, the Plaintiff filed the second affidavit of Andrew Stephens which was in reply to David Smith’s affidavit. In that affidavit Mr Stephens refers to a number of exhibited markers. In the affidavit Mr Stephens elaborated in more detail about the procedure adopted when issuing markers to guests to “deal with the Defendant’s situation in detail.” He stated that, “we are extremely careful to ensure that the system is secure to avoid losses to the casino.” In support of his contention that the system is secure Mr Stephens went on to say, “As can be seen from the Markers at AMS1 each is individually numbered - when the casino opened we started at 0001 and each marker issued is the next in sequence. Each marker must have the guest’s name on the face of the marker be signed by the guest in front of the, the pit boss/manager (sic.) who then countersigns the marker and then countersigned again by a cashier. What cannot be clearly seen from the copies exhibited to AMS1 is that not only are the markers signed and dated, they are also time stamped.” It then appears that at this stage that the marker chips are issued by the cashier.
14. On close inspection of the exhibited markers by the Court, after retiring to prepare the reserved judgment, it became clear that the system had to a degree not been adhered to as strictly as Mr Stephens would like the Court to believe. Mr Stephens is correct in his assertion that the stamp on the markers cannot clearly be seen on the photocopies. However, on close inspection, it is clear that the stamped dates on a number of them do not correspond with the hand written dates.
15. The Court, on noticing the apparent discrepancies, wrote to the parties inviting them to either submit written submissions or to fix a date to make oral submission to the Court on this point. The parties chose the latter approach and the Court heard from Counsel on 4th September 2009 when the original markers were shown to the Court. The Court was not inviting the parties to file further evidence but merely to inspect the markers to then address the Court as to whether it had been correct in adducing there to be certain apparent discrepancies.
16. Mr Oliver Smith stated that the Court could have regard to this discrepancy and that it went to the issue of the veracity of signatures, as it put the procedures of the Casino into question. Mr Katan submitted that this was the first time that this had been raised by Mr Smith and that the Court should rely only on the evidence and contentions contained in David Smith’s affidavit and Defence. Mr Katan submitted that, if the Court were to place any weight on these discrepancies, the Plaintiff should be permitted to file a further affidavit, as he would be in a position to explain how this happened and to present further documents that showed the checks and balances that made the adopted system reliable.
17. The Court declined the application to file further evidence. It goes against the nature of Summary Judgment proceedings for the parties to file evidence in the type of detail that one might expect at a trial. The Plaintiff failed to produce any Rule of Court or case authority in support of the application to file additional evidence in Summary judgment proceedings after the close of the parties’ cases. However, the Court indicated that it would exercise its discretion on the application for summary judgment by considering the filed supporting evidence and seeing how the parties’ submissions primarily made on 19th August and pleadings addressed the same.
18. The Plaintiff is the proprietor of the Casablanca Casino. It is contended that the Casino lent $530,500 to David Smith by way of markers issued in return for gaming chips, thus enabling him to partake in gambling games at the Casino. At paragraph 2 of the Statement of Claim, the Plaintiffs set out the total amount they alleged was borrowed on specific dates. The Plaintiff contends that David Smith has failed to pay back the amount borrowed.
19. Mr Stephens, the Director of the Plaintiff, stated in his affidavit that there was only one David Smith who was known to the Casino and he was in fact their biggest player. Mr Stephens stated that David Smith “visited the Casino on a regular basis, perhaps once a week and all members of staff knew who he was.” As a consequence, is submitted that it is “inconceivable that the markers were not signed by Mr Smith or that they were issued to anyone else but him.”
20. Mr Stephens said that prior to David Smith’s assets being “frozen” by the Court there had been no problem with Mr Smith and his account. David Smith would ask them on occasion for information about his credit balance and that would be noted on the markers.4 Mr Katan pointed out figures on some of the signed markers which he contended illustrated the running balance and an acceptance by David Smith of the same. Mr Stephens in his affidavit said that an agreement had been reached that Mr Smith would repay any monies he owed by the end of July 2008. Mr Stephens further stated that they had “numerous conversations about repayment and at no time did he ever suggest that he did not owe the money, only that he could not pay as his accounts were frozen.” Mr Stephens stated that at no time did Mr Smith suggest that he had not signed any of the markers.
21. On November 25, 2008 Miller Simons O’Sullivan, on behalf of the Plaintiff, sent a letter before action to the Defendant setting out details of the alleged debt. In a letter of reply dated 9 December 2008, Stanfield Greene, on behalf of Mr Smith, wrote back stating: “Without acknowledging the amount claimed, the current legal situation in which my client is entombed prevents him from resolving the instant claim.” In a further letter, dated December 11, 2008, Stanfield Greene wrote “My client is requesting that you delay commencing any action until the current matter involving the freezing of his assets is completed. He guarantees at that time to settle the outstanding amount. My client has always in the past settled his debts with your client……..” The Plaintiff, despite the non- admission in the letter of 9th December, relies upon the latter letter as evidence of an acknowledgment from Mr Smith that he owes the sum claimed.
22. On 16th February 2009 Miller Simons O’Sullivan wrote to Stanfield Greene, after a request had been made for an extension of time to file their Defence, stating “One thing that may assist with gaining some co-operation from my client is understanding how much of the claim is admitted and what remains an issue.”
4 Markers 1685, 1753, 1632 and 1633
23. The Defendant thereafter filed what might be termed a rather ‘thinly pleaded’ Defence. It reads like a holding Defence, basically denying liability and making no admission. There was no allegation that the signatures that appeared on the markers were not Mr Smith’s or that they were forged. The only real substance to the Defence was that it said there was a denial as to the exact amount claimed and the timeliness of the payments. Interestingly it appears, from their letter of March 11, 2009, that when Counsel drafted the Defence he was unaware as to what part of the loan was disputed.
24. On 19th June 2009 David Smith drafted a two page affidavit in which he simply denied owing monies on 12 markers. He did not elaborate as to why but simply submitted that there was “a genuine factual dispute as to the underlying claim” and therefore the matter is not suitable for a summary judgment claim. I note that there is no mention in the affidavit that the signatures on the face of the disputed markers were not David Smith’s. In addition, David Smith made no proposal to pay the $60,000 owed on markers which he apparently did not dispute; these payments have still not been made.
25. It is not until David Smith’s second affidavit, which was sworn on 13th August 2009, that he contends: “the basis for denying owing the amounts... is that the various signatures reflected on those markers are in fact my signature.” David Smith does not go on to say whether he contends that they were forged on those markers bearing his name or whether there was an error by the Plaintiff when it contends that the David Smith mentioned on the markers was him. In his affidavit David Smith went on to say that “A defence was filed on my behalf on February 27, 2009 which in essence denies owing the total amount claimed.” This is at best inaccurate, at worst misleading, as in the Defence he does not specifically deny owing $60,000 of the claim.
26. The various disputed markers are identified by Mr Stephens, Tomas Kovacs and Zoltan Kovacs in their respective affidavits. They all confirm that the markers were un-mistakenly issued to and signed by David Smith. Mr Stephens sets out in some detail the procedure for the issuing and processing of markers. As a part of the procedure set out in his affidavit, Mr Stephens mentioned the names of members of staff who would have been involved at different stages with the handling of the said markers. He re-iterated that the markers must be signed in front of the pit- boss/manager who would then countersign and in turn the cashier would again countersign.
27. It is contended that on seventy-one occasions chips were advanced to David Smith, of which fourteen remain unpaid. It is contended that nothing on the face of the various disputed markers vary in any way from the undisputed and paid markers. It is contended that, although the Defendant challenges some of the signatures, he has never denied receiving gambling chips to the value of the amount claimed.
28. What amounts to an unanswerable case under Order 14 and what suffices for leave to defend? The brief answer is that the Plaintiffs must be able to satisfy the court that the Defendant cannot have any bona fide answer to the Amended Statement of Claim. Thus, if David Smith can put forward facts which, if true, would constitute a prima facie defence, the Plaintiffs cannot take advantage of Order 14. Further, and for completeness sake, an arguable point of law may defeat the application. Also, for the purpose of Order 14, the Defendant’s pleadings must be accepted as true except where they are contradicted by his own documents or are palpably false. Evidence of bad faith or of the defence being a sham or of suspicious circumstances surrounding it may negate its acceptance and justify conditional leave to defend. Leave to defend may be granted in the absence of an issue or question in dispute which ought to be tried if it appears to the court that “for some other reason there ought to be a trial.” To express it even more succinctly, Order 14, as has been repeatedly said and applied is for cases where, there being plainly no defence and no other reason for trial, it would be unjust (and abusive of the process of the court) to permit a trial.
29. It seems to be from an examination of the pleadings (even having regard to the unimpressive nature of those filed by David Smith), reading the affidavits and hearing the submissions, that there are issues of fact between the parties. It is still arguable, despite the force of Mr Katan’s submissions which were grounded on the substantial detail of the procedures followed by the Casino when issuing and processing markers, that on the pleadings and evidence before me the Defendant did not sign the disputed markers.
30. Summary judgment should not be entered in this case where there are, at the very least, disputed issues of material fact regarding the genuineness of the signatures. Until this fundamental factual issue is determined, which will require findings of fact in relation to the procedures generally followed and specifically followed in relation to David Smith, and the determination of issues surrounding the credibility of the various witnesses including David Smith, it would not be appropriate to enter judgment.
31. It is significant that there are important questions of credibility that will need to be addressed. It would be wrong for this Court to make findings of fact without considering the credibility of the witnesses where the parties’ testimony about whether these are Mr Smith’s signatures or not is conflicting. A credibility determination and a weighing of the evidence is necessary to enable the Court to make factual findings in this case, and such determination is generally improper in summary judgment proceedings
32. The Plaintiff, although forcefully presenting its case, has not established that there is plainly no defence and I am not satisfied that there is no reasonable doubt that the Plaintiff is entitled to its judgment. Since there is an arguable defence this is not the time for the Court to determine it, as it is not clear that it must fail. Whilst the Plaintiff's case was certainly well argued and highlights forceful contentions, there are issues of fact which could, if accepted by the trial court, raise a possible defence. In order to determine the issue, the court will need to consider the actual course of events and their significance as well as the credibility of witnesses. Both parties may also want to consider whether there is a need for expert evidence.
33. I am satisfied that David Smith has demonstrated that there is a substantial question of fact which ought to be tried and which, if accepted, raises an arguable defence and I refuse the application for summary judgment in relation to the disputed parts of the Plaintiff's claim.
34. I am satisfied that that there is no issue or question in dispute which ought to be tried in relation to marker 1617 for $30,000 and marker 1749 for $30,000. At no time has the Defendant specifically contended that he did not sign these markers, nor has he contended that he had not received the related chips. These markers are not contained in the list of disputed markers set out in David Smith’s two affidavits. As a consequence, I enter judgment for this undisputed part of the claim which amounts to $60,000. I award interest on that sum pursuant to section 101B of the Civil Procedures Ordinance on that sum. The Plaintiff may, of course, proceed with the action as to the rest of the claim.
35. I have not received an application that, if leave to defend was granted, then it should be conditional. Having considered the nature of the Defence’s case, this is a matter in which I would have ordinarily invited the parties to make submissions concerning the imposition of conditions to the granting of leave. It is of course important that I have regard to the principles set out in M v Yorke Motors V Edwards  1 WLR 444 and the principles set out by Lord Diplock therein. However, the Court may take judicial notice of the effect of other ongoing proceedings involving David Smith which are still before it. As a consequence of a restraint order in unrelated proceedings, Mr Smith would be unable to comply with any financial condition, as any monies he has in the jurisdiction or brought into the jurisdiction would have to be restrained. Having regard to the principles set out by Lord Diplock, I must have regard to the fact that it would be impossible for David Smith to comply with any financial condition rather than simply finding it difficult. An impossible condition is tantamount to entering judgment and should not be imposed. I therefore, in the unique surrounding circumstances, grant unconditional leave to defend.
36. Having regard to the circumstances of this case, costs are costs in the cause.
Richard Williams (J)