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Ivey v Genting Casinos (UK) Ltd t/a Crockfords[2017] UKSC 67 is a UK Supreme Court case that reconsidered the test used for determining dishonesty.^[1]

Facts[edit]

Phil Ivey, an American professional poker player, played and won a series of games of Punto Banco—a variant of baccarat—at Crockfords Casino in London, owned by Genting Casinos (UK) Ltd. The casino did not pay out the £7.7m he had won, as they believed Ivey had cheated by using edge sorting. Ivey sued the casino to recover his winnings.

Both Ivey and the casino agreed that the contract contained an implied term forbidding cheating. Ivey's lawyers argued that the appropriate test for whether cheating occurred was the same for contract as it was in section 42 of the Gambling Act 2005, and that cheating necessitated dishonesty, which had not been shown.

At trial, Judge John Mitting held that cheating had occurred and the contract was thus invalid. The Court of Appeal upheld the trial judge's ruling 2–1.

Decision[edit]

The Supreme Court held that Ivey had cheated, and was thus not entitled to the payment sought from Genting Casinos. Lord Hughes considered at length whether the existing test for dishonesty was acceptable, noting that dishonesty in civil contexts is judged objectively. The existing test had been developed in the case R v Ghosh, and required firstly that the act would be considered dishonest by an ordinary, reasonable person, and secondly that the accused would have realised that what they were doing was, by those standards, dishonest. This second component was ruled to be inadequate and only the first part of the earlier test was applied.

Reception[edit]

In the High Court case of DPP v Patterson, Sir Brian Leveson observed that:

Given the terms of the unanimous observations of the Supreme Court expressed by Lord Hughes, who does not shy from asserting that Ghosh does not correctly represent the law, it is difficult to imagine the Court of Appeal preferring Ghosh to Ivey in the future.^[2]

David Ormerod and Karl Laird criticised the direction of the law following Ivey, arguing that the lack of a subjective element will lead to uncertainty and a possible human rights challenge under Article 7, citing a prior challenge to Ghosh.^[3][4]

References[edit]

1. ^'Ivey (Appellant) v Genting Casinos (UK) Ltd t/a Crockfords (Respondent)'. The Supreme Court. Retrieved 2019-06-06.
2. ^[2017] EWHC 2820, at [16].
3. ^R v Pattni [2001] Crim LR 570
4. ^Ormerod, David; Laird, Karl (2018). Smith, Hogan, and Ormerod's Criminal Law (15th ed.). Oxford. p. 881. ISBN9780198807094. OCLC1014163712.

External links[edit]

Supreme Court

Http://www.gentingcasino.co.uk

Citations: [2017] UKSC 67; [2018] AC 391; [2017] 3 WLR 1212; [2018] 2 All ER 406; [2018] 1 Cr App R 12; [2017] Lloyd’s Rep FC 561; [2018] Crim LR 395.

Facts

The claimant was a professional gambler who used a technique called ‘edge-sorting’ to enhance his odds of winning at Punto Banco. He used this technique at the defendant’s casino, and won over £7 million. The defendant refused to pay out the winnings, on the grounds that the claimant had cheated (which was in breach of the contract between the parties). The defendant also argued that what the claimant had done was a criminal offence under section 42 of the Gambling Act 2005. This would make the winnings the proceeds of crime, and therefore irrecoverable in civil proceedings.

Whether the claimant had committed the section 42 offence depended on whether he had been ‘dishonest‘. The definition of ‘honesty’ in criminal law at the time was set by the test in R v Ghosh [1982] EWCA Crim 2. This provided that a defendant was dishonest if 1) he would be considered dishonest by the standards of ordinary, honest people, and 2) he appreciated at the time that ordinary, honest people would consider him dishonest.

Issue(s)

1. Had the claimant cheated?
2. Were the claimant’s actions ‘dishonest’?

Decision

The Supreme Court held in favour of the defendant. The claimant had cheated and therefore was in repudiatory breach of contract. His winnings were not recoverable.

This Case is Authority For…

Cheating

Cheating bears the same meaning in criminal and civil law. It does not necessarily involve dishonesty, though it usually will. No exhaustive definition should be designed by the courts, but the essential element of cheating is a deliberate, non-accidental act designed to give an advantage which is objectively improper given the game/contest and rules. The defendant’s subjective assessment of his actions is not relevant to whether he was cheating.

Dishonesty

Since the case could be dealt with on the basis that the claimant had cheated, there was no need to consider whether he was dishonest. However, the Supreme Court did so anyway. These remarks, while strictly obiter, have widely been accepted as overruling the Ghosh test.

The two-stage test set out in Ghosh should not be considered good law. Instead, the following test should be used to determine whether the defendant is honest:

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1. Determine the defendant’s subjective beliefs or knowledge about the facts;
2. In light of that knowledge or belief, and any other relevant circumstances, determine whether the defendant’s behaviour is dishonest by the standards of ordinary, honest people.

The defendant’s own beliefs about the honesty of his conduct is not relevant.

Other

Lord Hughes gave five reasons for overruling the Ghosh test:

1. The Ghosh test had the effect that the more warped the defendant’s standards of honesty, the less likely he would be considered dishonest;
2. While a subjective element is normally required in criminal law to reflect the defendant’s culpability, there was no need to go as far as Ghosh did. The necessary subjective element could be fulfilled by informing the reasonable person of the facts that the defendant believed or knew.
3. Jurors found the Ghosh test confusing or hard to apply.
4. The Ghosh test caused an unprincipled divergence between the criminal and civil law (where the standard had always been purely objective).
5. Ghosh was based on a misunderstanding of previous authorities, and therefore was wrongly decided as a matter of precedent.