The Star Pty Ltd v Wong

[2018] NSWSC 151

Supreme Court

New South Wales

Medium Neutral Citation:	The Star Pty Ltd v Wong [2018] NSWSC 151
Hearing dates:	20 February 2018
Date of orders:	20 February 2018
Decision date:	21 February 2018
Jurisdiction:	Common Law
Before:	Schmidt J
Decision:	(1) The Plaintiff has leave to proceed pursuant to Rule 11.8AA of the Uniform Civil Procedure Rules 2005 (NSW) against the Defendant. (2)   The Defendant draw a replacement cheque made payable to the Plaintiff in the sum of HKD 30,453,500.00 and give that replacement cheque to the Plaintiff within 14 days. (3)   The Defendant draw a replacement cheque made payable to the Plaintiff in the sum of HKD 12,181,600.00 and give that replacement cheque to the Plaintiff within 14 days. (4)   In default of the Defendant complying with orders 2 and 3, that the Plaintiff have leave to file a Notice of Motion for Default Judgment on Liquidated Claim to seek default judgment in the sum of HKD 42,635,100.00 less any credits due to the Defendant or payments by the Defendant. (5)   The Defendant pay the Plaintiff’s costs as agreed or assessed.
Catchwords:	CHEQUES – casino – order seeking replacement cheques – cheques accidently destroyed – s 115 notices – service and leave to proceed – case established – orders sought made – costs
Legislation Cited:	Casino Control Act 1992 (NSW) Cheques Act 1986 (Cth) Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005 (NSW)
Category:	Principal judgment
Parties:	The Star Pty Ltd (Plaintiff) Wai Chong Wong (Defendant)
Representation:	Solicitors: MCW Lawyers (Plaintiff)
File Number(s):	2017/376834
Publication restriction:	Nil

Judgment

1. The Star seeks orders under the Cheques Act1986 (Cth), requiring Mr Wong, a patron of its Sydney casino, who has not entered an appearance and was not represented at the hearing, to provide it with replacement cheques for two cheques he provided it in October 2016, which were later accidentally lost or destroyed by one of its employees, as well as other orders.

2. Section 74 of the Casino Control Act1992 (NSW) precludes a casino operator such as The Star from extending credit. Section 75 regulates cheques and deposit accounts. It permits casino operators to establish deposit accounts for their patrons, which may be credited with deposits made by money, cheque payable to the operator, or a traveller’s cheque and then to issue to that person chip purchase vouchers, for an equivalent amount: s 75(2). A cheque accepted by a casino operator may be redeemed in exchange for the equivalent in value to the amount of the cheque by various means, including another cheque: s 75(4). The section also specifies time periods within which cheques must be banked.

3. The February 2018 affidavit evidence of Mr Prowse, The Star’s solicitor, establishes that the summons and affidavits he and Mr Aloi, The Star’s Cashier Services manager; Mr Procter, the Assistant Manager VIP Credit & Collections of The Star; Ms Soares, the VIP Credit & Collection Manager of The Star Entertainment Group in Macau; Ms Lee, the International Marketing Officer for The Star Entertainment Group in Macau; and Mr Chou, the Vice President VIP Credit & Collections for The Star Entertainment Group in Hong Kong, had sworn in November and December 2017 were sent to him by prepaid post addressed to Mr Wong at his Macau address in December 2017. That correspondence has not been returned.

The missing cheques

4. The November 2017 affidavit evidence of Mr Aloi establishes The Star’s relevant systems. They involve patrons who are approved for cheque cashing facilities providing cheques in favour of The Star, drawn on their bank, in order to obtain a deposit account. Mr Wong signed an application for such a facility on 24 October 2016 for AUD$5million, there disclosing a Macau home address and a Hong Kong Bank, the Standard Chartered Bank. The amount of his facility was later increased to AUD$7million.

5. On 24 October 2016, Mr Wong also completed a chip purchase voucher for AUD$5million and provided a Standard Bank cheque 936403 for the Hong Kong Dollar equivalent of AUD$5million. The Star’s system was to keep such cheques in the patron’s file, in the Cash Services department, pending settlement of the account. A copy of the purchase voucher was kept in the Revue Audit department, for reconciliation.

6. Later settlement involves the patron either collecting his or her accumulated winnings, or providing funds to cover accumulated losses. In the event that any money is owed to The Star and the patron is present on settlement, its system is that a personal cheque is then provided by the patron for the outstanding amount and the original counter cheque is either shredded or returned to the patron, at the patron’s option. If the patron is not present, the counter cheque and receipts are retained in a safe deposit box and when a personal cheque is completed, the outstanding amount is then banked.

7. It was on 25 October 2016 that Mr Wong filled out a second chip purchase voucher for AUD$2million and provided counter cheque 160099 for funds equivalent to that amount, to an employee who no longer works at The Star, Mr Tasker. Mr Wong was then permitted access to those further funds at the casino.

8. In evidence was a copy of the first cheque, no 936403, but not the second, no 160099. The Star relied on a combination of records which it maintained about that cheque and the evidence of Mr Aloi and Mr Proctor, to establish that this cheque was issued by the Standard Bank in the same form as cheque no 936403.

9. Mr Wong was not present on settlement. His AUD$7million account was reduced by sums he was given credit for, with the result that he then owed The Star AUD$6,139,534.98. Even though Mr Wong provided no personal cheque to pay that amount, it appears that both cheque no 936403 and 160099 were destroyed by Mr Tusker. In December, when one of the cheques could not be located, Mr Tusker told Mr Aloi that he must have shredded it accidentally, thinking that Mr Wong had provided a personal cheque. Neither cheque has been banked by The Star, with the result that the AUD$6,139,534.98 remains unpaid.

The s 115 notices

10. A cheque is defined in s 10 of the Cheques Act to be “an unconditional order in writing” that:

“(a)   is addressed by a person to another person, being a financial institution; and

(b)    is signed by the person giving it; and

(c)    requires the financial institution to pay on demand a sum certain in money.”

11. I am satisfied on the evidence that the two cheques here in question were brought into existence by Mr Wong and that they each fell within this definition.

12. It is s 115 which regulates the replacement of lost or destroyed cheques, including, if necessary by order of this Court. It relevantly provides:

“115    Replacement of lost or destroyed cheque

(1)    Where:

(a)    a cheque (in this section referred to as the original cheque ) is lost or destroyed; and

(b)    the original cheque had not, at the time of its loss or destruction, been presented for payment or discharged;

a person (in this section referred to as the former holder ) who was the holder of, or otherwise lawfully in possession of, the original cheque at the time of its loss or destruction may, by notice in writing given to the drawer of the original cheque, request the drawer to give the former holder a replacement cheque to the same tenor as the original cheque.

(2)    The notice is not effective for the purposes of this section unless it contains sufficient particulars of the original cheque to enable the drawer to:

(a)    identify the original cheque with reasonable certainty; and

(b)    draw a replacement cheque to the same tenor as the original cheque.

(3)    The drawer may, by notice in writing given to the former holder within 14 days after the day on which the notice under subsection (1) is given to the drawer, request the former holder to give the drawer an indemnity in respect of any loss and expenses that the drawer may reasonably incur by reason of the drawing of a replacement cheque to the same tenor as the original cheque, and may also request the former holder to provide adequate security for the indemnity.

(4)    The drawer shall:

(a)    in a case where the drawer requests the former holder, by notice under subsection (3), to give the drawer an indemnity and also to provide security for the indemnity—within 14 days after the day on which the indemnity is given to the drawer or the day on which the security is provided, whichever last occurs;

(b)    in a case where the drawer requests the former holder, by notice under subsection (3), to give the drawer an indemnity, but does not also request the former holder to provide security for the indemnity—within 14 days after the day on which the indemnity is given to the drawer; or

(c)    in any other case—within 14 days after the day on which the notice under subsection (1) is given to the drawer;

draw a replacement cheque to the same tenor as the original cheque and give the replacement cheque to the former holder.

(5)    …

(6)    ...

(7)    …

(8)    Where the drawer or indorser refuses or fails to comply with subsection (4) or (7), as the case requires, the former holder may apply to a court of competent jurisdiction for an order directing:

(a)    the drawer to draw a replacement cheque to the same tenor as the original cheque and give the replacement cheque to the former holder; or

(b)    ...

(9)    Where an application is made to a court of competent jurisdiction for an order of a kind referred to in subsection (8), the court may make the order on such terms and conditions as it considers just and equitable.

(10)    …”

13. There is no provision in the Cheques Act as to how a s 115(1) notice may be given.

14. The affidavits of Mr Procter, Ms Lee and Mr Chou also establish that in August 2017 two notices under s 115 of the Cheques Act were sent by registered post to Mr Wong at his Macau address, one in relation to each of the two cheques, asking that he provide replacements within 14 days. The notices were posted in Macau in August 2017. There has been no response from Mr Wong, even after service of the summons, although in evidence is a copy of a receipt of the registered mail he was sent, dated 25 August 2017, which Mr Wong then signed.

15. On that evidence I am satisfied that Mr Wong has been given a notice which satisfies the requirements of s 115 in respect of both cheques, they each enabling him to identify the original cheques which had been lost or destroyed and to draw a replacement cheque, to the same tenor as the original cheques he had provided The Star in October 2016.

The orders sought must be made

Service and leave to proceed

16. Service of the summons and supporting affidavits, I am satisfied, was effected in accordance with the requirements of Rule 10.6 of the Uniform Civil Procedure Rules 2005 (NSW), which relevantly provides that:

10.6   Service in accordance with agreement between parties

(1)    In any proceedings, any document (including originating process) may be served by one party on another (whether in New South Wales or elsewhere) in accordance with any agreement, acknowledgment or undertaking by which the party to be served is bound.

…

(2)    Service in accordance with subrule (1) is taken for all purposes (including for the purposes of any rule requiring personal service) to constitute sufficient service.”

17. By clause 4 of the cashing facility application form which Mr Wong signed in 2016, Mr Wong agreed that any cheques he presented were subject to the laws in force in this State; that he would submit to the courts of this State; and that any service could be effected upon him by post addressed to the home address he there provided in Macau.

18. Despite service at that address Mr Wong has not appeared to resist the orders which are sought. I am, nevertheless, satisfied that service has been effected upon him in accordance with the agreement which he made with The Star in October 2016. Accordingly, service has been effected in accordance with the Rule.

19. In the circumstances, I am also satisfied that The Star should have leave under Rule 11.8AA to proceed against Mr Wong, even though he has not entered an appearance.

The Star has established its case

20. The evidence of Mr Aloi and Mr Procter, I am also satisfied, establish that Mr Wong provided the two cheques to The Star under the system Mr Aloi described; that the result was that The Star established a deposit account for Mr Wong totalling AUD$7million; that on settlement at the end of his visit to the casino in October 2016, Mr Wong did not provide The Star with a personal cheque to meet the amount which he then still owed it, some AUD$6,139,534.98; that as the result of errors made by employees working for The Star at the casino, the two cheques Mr Wong had provided it were lost or destroyed; that subsequently required notices of their destruction was given to Mr Wong in accordance with s 115 of the Cheques Act; that he has failed to provide replacement cheques; and that despite service of the initiating process and supporting evidence, he has not appeared to resist the making of the orders which The Star seeks.

21. In all of these circumstances I am also satisfied of the Court’s power to order Mr Wong to provide The Star with replacement cheques and that the leave which The Star requires under Rule 11.8AA to proceed against Mr Wong, must be granted.

22. The Star seeks orders not only requiring Mr Wong to issue replacement cheques, but to deal with the possibility of his failure to comply with those orders. It was consistent, it submitted, with the requirements of s 56 of the Civil Procedure Act2005 (NSW) which establishes that the overriding purpose of that Act and of the Court’s Rules is the facilitation of the just, quick and cheap resolution of the real issues in the proceedings, to give it leave to enter judgment allowing for credits Mr Wong has already been given, as well as any other payment he might make to repay the debt he owes The Star, to be taken into account if it has to seek to enter default judgment.

23. I am satisfied that this submission must be accepted.

24. Had Mr Wong complied with the s 115 notices he was given, the replacement cheque or cheques could have been presented by The Star and the debt it is owed by Mr Wong satisfied. The total amount of such a cheque or cheques would, however, have exceeded the amount which Mr Wong owed The Star, that being HKD$42,635,100, an amount equivalent to AUD$7million and thus more than the AUD$6,139,534.98 which Mr Wong now owes to The Star.

25. As The Star accepted, in that event, it would have incurred a debt to Mr Wong, which it could have satisfied, by paying the balance, to him.

26. Section 115(9) permits the Court to make orders on terms and conditions considered to be just and equitable in the circumstances.

27. In these circumstances, I consider that it is just and equitable to order that in the event that Mr Wong does not comply with the Court’s order that he provide The Star with replacement cheques, that it be permitted to enter default judgment in a sum which reflects the amount of Mr Wong’s debt to The Star at that time.

Costs

28. The usual order under the Rules is that costs follow the event: Rule 42.1. In this case that is an order that Mr Wong bear The Star’s costs as agreed or assessed. In the circumstances I have discussed, I am also satisfied that is the appropriate costs order.

Orders

29. For these reasons, I order that:

1. The Plaintiff has leave to proceed pursuant to Rule 11.8AA of the Uniform Civil Procedure Rules 2005 (NSW) against the Defendant.

2. The Defendant draw a replacement cheque made payable to the Plaintiff in the sum of HKD 30,453,500.00 and give that replacement cheque to the Plaintiff within 14 days.

3. The Defendant draw a replacement cheque made payable to the Plaintiff in the sum of HKD 12,181,600.00 and give that replacement cheque to the Plaintiff within 14 days.

4. In default of the Defendant complying with orders 2 and 3, that the Plaintiff have leave to file a Notice of Motion for Default Judgment on Liquidated Claim to seek default judgment in the sum of HKD 42,635,100.00 less any credits due to the Defendant or payments by the Defendant.

5. The Defendant pay the Plaintiff’s costs as agreed or assessed.

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Decision last updated: 22 February 2018