Neutral Citation Number: [2009] EWCA Civ 1109
Case No: A2/2009/0089
IN COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, QUEEN’S BENCH DIVISION
MR JUSTICE BLAIR
LOWER COURT NO: HQ08X01090
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 08/10/2009
Before:

LORD JUSTICE PILL
LORD JUSTICE HOOPER
and
LORD JUSTICE WILSON
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Between:

	FAHAD AL TAMIMI	Appellant	
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	MOHAMAD KHODARI	Respondent	

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Mr Alan Steinfeld QC and Mr Jonathan Russen (instructed by Bircham Dyson Bell LLP) appeared for the Appellant.
Mr Mark Howard QC and Mr Neil Mendoza (instructed by Barker Gillette LLP) appeared for the Respondent.

Hearing date: 28 July 2009
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Judgment
Lord Justice Wilson: 
A: INTRODUCTION
1.	Mr Tamimi, the defendant, appeals against an order made by Mr Justice Blair in the High Court, Queen’s Bench Division, on 18 December 2008. The judge thereby gave judgment in favour of Mr Khodari, the claimant, against the defendant in the sum of £240,500 plus interest and dismissed the defendant’s counterclaim.
2.	Before the judge there was little active dispute between the parties in relation to the relevant facts. Insofar as they were in dispute, the judge preferred the claimant’s version of them; and in this court the defendant does not challenge any of the judge’s findings of primary fact. Instead he presses the following four arguments, to each of which, so he says, the judge wrongly declined to accede:
(a)	Of the sum of £240,500 for which the judge gave judgment, £202,000 was irrecoverable by virtue of s.1 of the Gaming Act 1892.
(b)	Of the said sum of £240,500, £11,000 (of which one half is included in the said sum of £202,000) was irrecoverable by virtue of s.40(1) of the Consumer Credit Act 1974.
(c)	Section 140A of the Consumer Credit Act of 1974 was engaged, with the result that the said sum of £240,500 fell to be reduced by an order under s.140B thereof.
(d)	The claimant was acting towards the defendant in a fiduciary capacity and the defendant’s counterclaim for a direction that, as a fiduciary, the claimant should account to the defendant for all their mutual dealings since December 2002 should have been upheld.
So the four arguments span three branches of the law. On behalf of the defendant Mr Steinfeld QC describes the first argument as the thrust of the appeal and the other three as relatively trivial.
B: THE FACTS
3.	The claimant resides in London and is an associate director of the National Bank of Dubai, attached to its Sloane Street branch. The defendant resides in Saudi Arabia and is a wealthy and well-known businessman. The defendant often visits London for business purposes. Until recently the defendant was a heavy and compulsive gambler, particularly at Les Ambassadeurs Club, behind Park Lane, of which he was a member. There he not only played the tables but often conducted business. The claimant was also a member of the club but did not gamble to any significant extent.
4.	The parties met in 2001, when the claimant, who was then a manager at Riyadh Bank in London, assumed responsibility for an account which the defendant then held there. Later that branch closed and the defendant moved his account elsewhere. In 2005, however, when the claimant began to work for the National Bank of Dubai, the defendant moved his account there and, as before, the claimant assumed managerial responsibility for it. The result was that it was open to the claimant, with the consent of the defendant even if given only orally, to direct transfers out of the defendant’s account.
5.	At the club, if his luck was out, the defendant sometimes found himself urgently in need of more chips with which to attempt to recoup his losses but without immediate access to funds of his own. A practice arose in which, acting in a personal capacity, the claimant would accede to urgent requests on the part of the defendant, made usually by telephone at night or at any rate outside banking hours, to come to the club and to lend him money. The practice began in December 2002 and ended on 8 September 2007.
6.	Occasionally the claimant’s loans to the defendant were in cash, with which – or at least with part of which – the defendant no doubt proceeded to buy chips from the cashier at the club. Usually, however, the loans took the form of chips which the claimant had himself there and then bought from the cashier. In order to make these loans to the defendant, the claimant:
(a)	used cash which he already had in his possession; or
(b)	bought cash from bureaux de change; or
(c)	bought chips from the cashier with one or other of his two personal bank debit cards or with banker’s drafts drawn on one of his personal bank accounts.
It was (and remains) unlawful for licensed casinos to sell chips against credit cards: s.16 Gaming Act 1968 (now replaced by s.81(2) Gambling Act 2005).
7.	During the period of almost five years in which the parties conducted such dealings, the claimant lent to the defendant sums which, so the judge found, totalled in the region of £7,000,000. Individual loans of £50,000 were common and sometimes they were of up to £250,000.
8.	From the beginning the arrangement between them was that the claimant’s loans to the defendant were repayable on demand, together with a fee of 10%. In fact the defendant’s practice was to repay the loans very quickly, typically within a day or two. The arrangement which obtained, and with which until April 2007 the defendant complied, was that, irrespective of the length of time for which each loan remained outstanding, a fee of 10% of it was payable to the claimant in addition to, and at the time of, its repayment.
9.	One of the defendant’s arguments to the judge was that, of the payments of 10%, one half had been procured by misrepresentation on the part of the claimant. The defendant alleged that the claimant had falsely represented to him that 5% of each loan reflected the cost to him of providing it and that accordingly, in agreeing to pay a fee of 10%, he, the defendant, had agreed that profit should accrue to the claimant in respect of each loan at a rate only of 5% rather than of 10%. But the judge found that the claimant had made no representation to the defendant about the cost to himself of providing the loans and thus that the suggested misrepresentation fell away. No appeal is brought against his finding in this respect. The judge also accepted the evidence of an owner of bureaux de change, called on behalf of the claimant, that a fee of 10%, or even more, for short-term loans made in circumstances analogous to the present was fairly normal.
10.	The defendant’s repayments to the claimant, together with 10%, no doubt took various forms. Success at the tables often prompted almost immediate repayment in cash or perhaps even in chips. But, during the two periods when the claimant managed those successive bank accounts, repayment was sometimes made out of them at the claimant’s direction, in particular by banker’s drafts credited to the claimant’s casino account. Before us there was some debate as to the nature of the judge’s findings in this respect. But in my view he made himself sufficiently clear. In referring to the ability of the claimant, “acting on oral instructions”, to issue banker’s drafts against the defendant’s accounts and/or in recording that there had been no suggestion that the claimant ever dishonestly caused payments to be made to him out of the defendant’s accounts, he must, as Mr Steinfeld concedes, have found that the defendant had consented in advance to the claimant’s procuring repayment in that way. The only area of possible ambiguity is whether the defendant’s advance oral consent was given in general, compendious terms or whether, as I consider to be the correct inference from the judgment, the defendant gave an individual consent specific to each repayment out of his accounts.
11.	The arrangement between the parties was based entirely on trust. The defendant did not sign any document recording the loans; nor did the claimant sign any document recording the repayments. The claimant kept some private written records of the transactions; but there was no satisfactory evidence that the defendant did so.
12.	As at 5 April 2007 the defendant’s indebtedness to the claimant was nil. At that time the claimant therefore destroyed such private records of their past transactions as he still kept.
13.	In the period between 6 April and 8 September 2007, following which their relationship broke down, the claimant – so the judge found – made eighteen further loans to the defendant. They totalled £1,125,000 and ranged in size from £5,000 on two occasions to £250,000. Two of the defendant’s legal arguments require us to note that, apart from the two loans of £5,000, all of the loans exceeded £25,000 and that, apart from one of the loans of £5,000 and another loan of £30,000, all of them were made prior to 1 September 2007. The additional profit due in respect of the loans amounted, so the judge found in accordance with the claimant’s evidence, to £109,500, there having been three minor agreed departures from the usual 10% which I need not explain. But, against the total of £1,234,500 which he thus owed, the defendant, between May and August 2007, made nine payments totalling £994,000. The difference is the sum of £240,500 for which the judge gave judgment.
C: SECTION 1 of the GAMING ACT 1892
14.	Section 1 of the Gaming Act 1892 (“the Act of 1892”), together with s.18 of the Gaming Act 1845 to which it relates, has been repealed with effect from 1 September 2007: ss. 334(1)(c) and (d) and 358 Gambling Act 2005 and Art. 2(4) Gambling Act 2005 (Commencement No 6 and Transitional Provisions) Order 2006, SI 2006/3272. But the repeal does not affect recoverability under agreements made before that date: s.334(2). Thus the defendant’s first argument cannot reach the two final loans of £38,500, inclusive of fee, made on 8 September 2007 and relates only to the balance of £202,000. Although he observed that he did not find resolution of the argument easy, the judge ruled that s.1 of the Act of 1892 did not apply to the loans amounting to £202,000.
15.	Section 1 of the Act of 1892 provides as follows:
“Any promise, express or implied, to pay any person any sum of money paid by him under or in respect of any contract or agreement rendered null and void by the Gaming Act 1845 or to pay any sum of money by way of commission, fee, reward, or otherwise in respect of any such contract … shall be null and void, and no action shall be brought or maintained to recover any such sum of money.”
The reference to the Gaming Act 1845 (“the Act of 1845”) is to s.18 thereof, which provides as follows:
“All contracts or agreements, whether by parole or in writing, by way of gaming or wagering, shall be null and void; and no suit shall be brought or maintained in any court of law and equity for recovering any sum of money or valuable thing alleged to be won upon any wager …”
16.	Mr Steinfeld’s argument could not be more clear nor, at first sight, more appealing. The defendant’s promises were, he submits, to pay to the claimant sums of money paid by the claimant “in respect of” contracts by way of gaming (and to pay him related fees) and thus they fall four-square into the category of promises made void by the Act of 1892.
17.	But a more profound appraisal of the Act of 1892 in its context, conducted with the benefit of judicial consideration of it, drives a different conclusion.
18.	At common law gambling contracts were not void and, if the winner extended credit to the loser, he could recover his winnings at law: Saxby v. Fulton [1909] 2 KB 208, per Vaughan Williams LJ at 224. Statutory inroads into this principle, to many of which penal consequences were attached, have always been strictly construed. In urging a wide construction of the Act of 1892, Mr Steinfeld is out of line. It would also be paradoxical to widen construction of it after it has been repealed.
19.	The Act of 1845 was far from being Parliament’s first attempt to control gambling and the purpose behind that Act is clear. By making gambling debts irrecoverable, Parliament intended to inhibit persons from gambling with more than they could readily afford, with – so to speak – more than they had in their pocket. Irrecoverability at law was intended to act as a substantial disincentive to the extension of credit to a gambler.
20.	But the courts’ strict construction of the Act of 1845 illumined the potential for its evasion. In particular this court held by a majority in Read v. Anderson (1884) 13 QBD 779 that, if a losing bet had been made through an agent, the agent who paid the winner could recover from his principal, the loser. So the bookmaker could evade the Act by insisting that the gambler should place his bet through an agent, albeit presumably one also likely to act cooperatively with the bookmaker by making the initial payment out of his own funds.
21.	The main purpose of the Act of 1892 was to reverse the effect of the decision in Read v. Anderson: see Tatam v. Reeve [1893] 1 QB 44, per Wills J at 47. Study of the words of the Act, set out at [15] above, makes that clear: a principal’s implied promise to pay his agent a sum of money paid by the agent under or in respect of the principal’s void gaming contact fits its terminology like a glove.
22.	In Tatam v. Reeve, cited above, it was soon decided, however, that the Act of 1892, in particular in its deployment of the words “in respect of”, went somewhat further than merely to bar the agent’s recovery against his principal; and that if, not having been the loser’s agent in striking the bets, a third party paid the resulting debts at the loser’s request (made in that case on the footing that he had to catch an early train to Henley so did not have time to locate his creditors), the Act precluded their recovery from the loser. The third party’s payments had been made “in respect of”, albeit not “under”, contracts rendered void by the Act of 1845. The earlier decision of this court in Ex p. Pyke, In re Lister (1878) 8 Ch D 754, on substantially the same facts but to the effect that the third party could recover from the loser, must have been abrogated by the Act of 1892: see MacDonald v. Green [1951] 1 KB 594, per Denning LJ at 605.
23.	So far, then, we see the Act of 1892 extending only to the situation of the agent or third party who has paid to the winner the amount of the loser’s debt. But the same situation was discerned to exist in two actions brought by proprietors of gaming clubs against members in respect of their losses. In games of bridge and poker, unlike, say, roulette, players bet against each other rather than against the establishment at which the games are played. In Woolf v. Freeman [1937] 1 All ER 178 the proprietor of a bridge and poker club claimed reimbursement from a member who had insufficient chips with which to pay his losses to a winner, as a result of which, in accordance with his normal practice, the proprietor had himself made the payment. In CHT Ltd v. Ward [1965] 2 QB 63 the claimants, Crockford’s, sold chips on credit on various occasions to the defendant, a member of the club, in order to enable her to play poker and, after crediting chips which she returned to it at the end of play, her account stood at £197 in debit, being therefore the value of the chips which she had had to pay to winners and which, under its rules, Crockford’s had redeemed to the winners for cash. Both actions failed on the basis that the clubs had chosen to pay to the winners the gaming losses incurred by the defendants and were thus precluded by the Act of 1892 from securing reimbursement in respect of them. At the end of its judgment in the Crockford’s case, this court observed, obiter, at 86D:
“… as the law stands, it would seem that, if the true nature of the transaction in the present case were that the plaintiffs had advanced money to the defendant for the purpose of lawful gaming, the plaintiffs would have been entitled to succeed.” (emphasis supplied)
Mr Steinfeld submits that the court’s observation was wrong. Even Mr Howard QC, who appears on behalf of the claimant, concedes that, arguably, it needed some qualification in the light of an earlier decision of this court, to which reference had been made in argument albeit not in the judgment, namely MacDonald v. Green, cited above.
24.	In MacDonald v. Green we find what appears at first sight to be a payment to the loser pursuant to a loan and thus a feature which more nearly approaches the present case. But was it in reality a payment to the loser rather than to the winner? C was the managing director and controlling shareholder of a bookmaker, X, to whom, after Royal Ascot, D owed £4020. C lent him that sum on condition that D would endorse C’s cheque, written as payable to D, in favour of X. X’s servant duly delivered C’s cheque to D, waited while he effected the endorsement and brought the cheque back to X. This court held that the Act of 1892 made C’s loan to D irrecoverable. For it had been an express condition of the loan that it be applied in discharge of the debt. The court contrasted such a situation with that, exemplified in its decision in In re O’Shea Ex p. Lancaster [1911] 2 KB 981, in which the claimant made a loan to the defendant (or, as in O’Shea, guaranteed his overdraft) in the expectation, but not on condition, that the defendant would apply the loan (or deploy the facility created by the guarantee) in discharge of his gambling debts. In his judgment Blair J set out the following words of Denning LJ, at 605-6:
“The distinction is clear enough: a loan which leaves the borrower at liberty to apply the money as he wishes, is not invalidated by the [Act of] 1892, even though it is contemplated by both parties that he will probably pay betting debts with it; but when a loan is hampered by a stipulation that the money is to be used for payment of a betting debt, then no matter whether the stipulation is express or implied or to be inferred from the circumstances, the loan is a payment in respect of the betting debt and is hit by the Act.”
25.	All the authorities cited above reflect payments made, whether pursuant to loans or otherwise, in respect of gambling losses already incurred. But the present case relates to a loan with a view to future gambling. At first sight it lies at some distance from the words of the statute. Mr Steinfeld invites us in effect to read the words so as to provide as follows:
“Any promise, express or implied, to [repay] any person any sum of money [lent] by him under or in respect of any [proposed] contract or agreement rendered null and void by the Gaming Act 1845 … shall be null and void …”
           Such a reading is not impossible; but it is a stretch.
26.	The decision of this court in Saffery v. Mayer [1901] 1 QB 11 is clear authority for Mr Steinfeld’s proposition that the Act of 1892 can preclude reimbursement of monies paid in respect of future gambling. D devised a system for finding winners at the races. V paid £500 to D on the basis that, pursuant to his system, D would place bets with it and that they would share the winnings arising out of them equally between them. But the system failed; the bets were lost. The claim for £250 made against D by V’s trustee in bankruptcy failed. V had been party to the gambling venture and had had an interest in its result, pursuant to which his payment had been made; and, although D had impliedly (and later expressly) promised to bear an equal share of losses, his promise was held to be void in that it was to pay V a sum of money paid by him “in respect of” a contract rendered void by the Act of 1845. All three members of the court stressed that the transaction between V and D was not one of loan.
27.	In the decision of this court in Saxby v. Fulton, cited above, S and B twice went together to Monte Carlo, where S lent a total of £4150 to B in the expectation, which proved correct, that B would spend it at the roulette tables. S’s claim for £4150 against B’s executrix was upheld. Gaming debts were enforceable in Monte Carlo. The attempts of B’s executrix to invoke the Gaming Act 1710 and/or alleged considerations of English public policy proved in vain. Not much attention was given to the Act of 1845 because it clearly lacked extra-territorial effect, nor therefore to the Act of 1892 which was constructed upon it. But Kennedy LJ commented, at 232:
“Reference was made to the more recent statutes of 1845 and 1892; but they relate to actual gaming transactions, and not to claims for repayment of money lent.”
Mr Steinfeld protests that the dictum of Kennedy LJ was too broad. “What,”                                  he asks, “about Tatam v. Reeve?” Mr Steinfeld – as usual – has a point.     Perhaps Kennedy LJ was loosely regarding a payment by a third party to a winner as part of an actual gaming transaction.
28.	At the end of the above excursion I share the conclusion reached, with enviable celerity, by Blair J, namely that the Act of 1892 can in principle preclude recovery of a loan made for the purposes of future betting and that, although MacDonald v. Green, cited above, concerned a loan in respect of  past bets, its principles also inform the circumstances in which a loan in the former category is rendered irrecoverable. Thus, although on any view the claimant’s loans to the defendant were made in order to enable him to gamble, the central issue is whether it was a condition (or stipulation) of the contracts between them that the defendant should apply the loans in that way.
29.	Mr Steinfeld stresses the facts that the loans were made at the club and usually took the form of deliveries of chips. He points to the judge’s reference to the fact that the loans were “required for gambling purposes”. But his argument begs the question: from whom did the requirement come?
30.	I find the answer to the central issue somewhat less difficult than did the judge. The claimant had no interest in the manner in which the defendant deployed the loans. His interest was confined to securing their repayment plus 10% and, more broadly, in fostering the goodwill of an important client of his  bank. Imagine a situation in which the defendant initially applies part of the claimant’s loan to a single number on the roulette table and wins at odds of 36 to one. Does his contract with the claimant require the defendant then to apply the balance of the loan to further gambling and thus not to permit his encashment of the remaining chips lent, together with the chips won, even if, indeed, the probable consequence thereof would be the virtually immediate repayment to the claimant? Mr Steinfeld accepts that the answer has to be negative. But, to press the enquiry further, would the contract require the defendant’s application of any part of the claimant’s loan to gambling if, for example, following a change of mind, the defendant were to wish to apply part of the chips lent by the claimant only to the purchase of refreshments for himself and his associates, to cash the remaining chips and to return to his hotel? The judge found that there was at least one occasion when, out of one of the claimant’s loans, the defendant made a payment to one of his own children; Mr Steinfeld tells us that the judge was referring to evidence that the defendant gave £1500 to his daughter for late-night shopping. Was that payment made in breach of contract? Having heard each party give oral evidence at length, the judge also found, more generally, that their relationship was one in which the claimant did what the defendant told him to do. The suggestion that, however eager for cash, the defendant would have accepted such a condition is in my view almost as fanciful as that the claimant would have demanded it.
31.	It is hard (submits Mr Howard, with whom I agree) to imagine that a loan made in the expectation of its use for gambling purposes would be trammelled by a condition that it be so used unless the lender has either an interest in the outcome of the gambling or (in the case of the proprietors of certain clubs) in the very occurrence of the gambling. At all events I see no reason for us to disturb the judge’s ultimate conclusion that no such condition is to be inferred from the circumstances of the present case. The defence under the Act of 1892 was rightly rejected.
D: SECTION 40 of the CONSUMER CREDIT ACT 1974
32.	Section 40(1) of the Consumer Credit Act 1974 (“the Act of 1974”), as it stood prior to a substitution which came into force only on 6 April 2008, provided that:
“A regulated agreement, other than a non-commercial agreement, if made when the creditor or owner was unlicensed, is enforceable against the debtor or hirer only where the OFT has made an order under this section which applies to the agreement.”
It is common ground not only that the claimant was unlicensed and that the OFT had made no relevant order but also that two of the 18 agreements which were the subject of the claim were “regulated” agreements, namely the two loans of £5000. In that both of them were agreements between an individual, namely the defendant, and the claimant by which the latter provided the debtor with credit, they were “personal credit” agreements within the meaning of s.8(1) of the Act (as that subsection then stood); furthermore, in that they were “personal credit” agreements by which the claimant provided the defendant with credit not exceeding £25,000, they were “consumer credit” agreements within the meaning of s.8(2) of the Act (as that subsection then stood); and, furthermore, in that they were “consumer credit” agreements, they were “regulated” agreements within the definition provided in s.189(1) thereof. Thus, unless the two agreements were “non-commercial agreements”, they were unenforceable against the defendant. Section 189(1) provides that:
“ ‘non-commercial agreement’ means a consumer credit agreement … not made by the creditor … in the course of a business carried on by him;”
The defendant argues that the two loans were made by the claimant in the course of a business carried on by him. Was the judge entitled to infer from the primary facts that the loans were not made by the claimant in the course of a business and thus to reject the argument?
33.	Mr Steinfeld’s argument starts, easily enough, with a reference to s.189(2) of the Act of 1974, which provides as follows:
“A person is not to be treated as carrying on a particular type of business merely because occasionally he enters into transactions belonging to a business of that type.”
On any view the transactions between the parties were more than occasional: they took place regularly for almost five years. The claimant cannot, and does not attempt to, repel the argument by reference to s.189(2). But the subsection does not go on to provide that a person is to be treated as carrying on a business when he enters into transactions belonging to such a business more than occasionally. Thus, on the face of it, the regularity of such transactions is a necessary but not a sufficient condition of the carrying on of a business. So how significant a factor is it?
34.	The high point of Mr Steinfeld’s argument is first to marry the regularity of the transactions between the parties with the profit which enured to the claimant by virtue of the 10% fee and then to invoke a dictum of Hobhouse J in Morgan Grenfell & Co Ltd v. Welwyn Hatfield D.C. (Islington L.B.C., third party) [1995] 1 All ER 1. The two local authorities together entered into a ten-year swap contract. Islington defaulted under its terms and Welwyn claimed restitution of sums paid to Islington thereunder. Coincidentally one of Islington’s defences was that the contract was one of wager, with the result that s.1 of the Act of 1892 precluded recovery. In the event the judge held that the contract was not one of wager; but, additionally, he upheld Welwyn’s reliance on s.63 of the Financial Services Act 1986, which excludes certain fiscal contracts from the reach of the Act of 1892 if entered into by either party “by way of business”. Hobhouse J, at 13d, contrasted a business transaction with “something personal or casual” and said, at 13j:
“As regards the test of the frequency with which the relevant type of transaction is entered into, this can be no more than a guide. Regularly entering into a certain type of transaction for the purpose of profit is a good indication that the party doing so is doing so by way of business.”
35.	So the features of the transactions between the parties must be weighed in order to discern whether, taken as a whole, they entitled the judge to conclude that they were not made in the course of a business carried on by the claimant. In my view the balance sheet reads as follows.
36.	Indicative of a business are the following features:
(a)	the claimant made numerous loans to the defendant;
(b)	they were made over a period of almost five years;
(c)	they totalled in the region of £7,000,000; and
(d)	a substantial profit, reflected in the 10% fee, accrued to the claimant by virtue of them.
37.	Contra-indicative of a business are the following features:
(a)	although occasionally he made loans to two others, almost all the claimant’s loans were made to only one person, namely the defendant;
(b)	the loans were made ad hoc, in response to the defendant’s sudden requests for immediate, temporary assistance;
(c)	the claimant acceded to the requests because he wanted to foster the goodwill of the defendant as an important client of his bank;
(d)	there is nothing to indicate that the claimant would have made loans to persons with whom he was unacquainted;
(e)	neither the loans nor the repayments were recorded in writing between the parties;
(f)	security for repayment was neither tendered nor sought;
(g)	the time for repayment of each loan was never identified;
(h)	the 10% fee was not related to the time for which each loan remained outstanding; and
(i)	the claimant had no business premises, kept no paraphernalia apt to a business and  neither advertised nor otherwise published terms upon which he was prepared to make loans.
38.	In my view a weighing of the rival features, in particular the necessary attribution of substantial weight to the informality surrounding the loans between the parties, fully entitled the judge to infer that the claimant did not make loans in the course of a business. The defence under s.40(1) of the Act of 1974 was rightly rejected.
E: SECTION 140A of the ACT of 1974
39.	Section 140A of the Act of 1974, inserted into the Act with effect from 6 April 2007, being the very day when the first of the 18 loans was made, provides as follows:
“(1) The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement … is unfair to the debtor because of one or more of the following –
(a) any of the terms of the agreement …”
The order sought by the defendant under s.140B was an order under subsection (1)(c) thereof by way of reduction of the fee of (virtually) 10% referable to the 18 loans. It seems to me (and I will assume) that all 18 of the agreements were “credit agreements” as defined by s.140C(1); for, contrary to the parenthetical submissions of both leading counsel, I can find no basis for concluding that either agreements not made in the course of the creditor’s business or agreements for loans exceeding £25,000 are excluded from that definition.
40.	Part of the defendant’s argument that the 10% fee precipitated unfairness in his relationship with the claimant has fallen away as a result of the judge’s finding that the claimant did not represent that half of the fee reflected the cost to himself of providing it. The balance of the argument that the relationship was unfair to the defendant seems to me to be foreclosed by the judge’s finding that the relationship was one in which the claimant did what the defendant told him to do. Furthermore these were unsecured loans to a person resident outside England and Wales; the judge accepted evidence that a fee of 10%, or even more, for loans made in analogous circumstances was fairly normal; and, crucially, there was no evidence that prior to 2007 the defendant had questioned the 10% fee or had sought to make less expensive arrangements for the funding of his gambling. The defence under s.140A of the Act of 1974 was rightly rejected.
F: THE COUNTERCLAIM FOR AN ACCOUNT
41.	The pegs on which the defendant now seeks to hang his counterclaim for an account are the claimant’s status as his bank manager for part of the period in which the loans and repayments were made, thus his control over the defendant’s accounts for that part of the period, and his directions for repayment to himself of some of the loans out of the accounts. The counterclaim was not pleaded on that basis and, although Mr Russen, the pleader, tells us that repayment out of those accounts assumed significance only in oral evidence, he did (with respect to him) make some reference to it in the defence in another context. The defendant seems to have been clutching at whatever straws have been borne by the prevailing wind.
42.	The relationship between a lender and a borrower is not in principle a fiduciary relationship. The relationship between a bank manager and a customer may in certain circumstances acquire a fiduciary character: see Snell’s Equity, 31st ed., 7 – 09,10. But there is no ground for discerning any such acquisition here nor indeed for concluding that the relationship of the parties qua bank manager and customer governed their transactions. On the judge’s findings, the parties did not allow the latter relationship to affect their transactions beyond conferring upon the claimant, in the event of the defendant’s specific consent, an administrative facility to secure repayment (of only some of the loans, be it noted) by a mechanism presumably convenient to both of them. There is no material from which to infer an understanding of subordination of the interests of the claimant to those of the defendant or (in the words of Millett LJ in Bristol and West Building Society v. Mothew [1998] Ch. 1, at 18B) of single-minded loyalty on the part of the former to the latter. The situation was no different from that in which a debtor hands to his creditor his wallet, or lends to him his cash card and equips him with his pin number, in order to enable him to secure repayment. The judge was right to conclude that the relationship between the parties was not fiduciary.
43.	Moreover, as Hooper LJ asked Mr Steinfeld in the course of argument, what would have been the point of the judge’s exercise of his discretion so as to direct an account? Unsurprisingly the defendant has never taken issue with the claimant’s concession that, as at 5 April 2007, all loans had been repaid, even including the 10% fees. Nor has the defendant ever contended, whether to the claimant in person or before the court in these proceedings, that he did, or might have, overpaid the claimant at any point over the years. My view is that the defendant requested an account by the claimant of all sums lent and repaid from December 2002 until April 2007 simply because he knew that, because of the informality of their arrangements, the claimant would be unable to provide it; and that the defendant’s request was therefore a blatant example of attempted forensic harassment. 
G: CONCLUSION
44.	Following four years in which the numerous transactions between the parties appear to have proceeded in a manner entirely satisfactory to both of them, the defendant, for reasons unknown to us and irrelevant, suddenly ceased to make full repayment; turned against the claimant; and, in these proceedings, threw the book at him, or (to be more precise) threw at him three books, in which he purported to find foundation for three defences and a counterclaim. All three books miss their intended target by a long way. This appeal should stand dismissed.
Lord Justice Hooper:
45.	I agree.
Lord Justice Pill:
46.	I agree with the judgment of Wilson LJ on each issue and add words only on the application of Section 1 of the Gaming Act 1892 in situations such as the present.  
47.	I agree with Wilson LJ and Blair J that the principle to be applied is that stated by Denning LJ in MacDonald v Green [1951] 1 KB 594 at 605-6:
“The distinction is clear enough: a loan which leaves the borrower at liberty to apply the money as he wishes, is not invalidated by the Gaming Act, 1892, even though it is contemplated by both parties that he will probably pay betting debts with it; but when a loan is hampered by a stipulation that the money is to be used for payment of a betting debt, then no matter whether the stipulation is express or implied or to be inferred from the circumstances, the loan is a payment is respect of the betting debt and is hit by the Act.”
The circumstances were, however, different from the present in that the loan was made to enable an existing gaming debt to be discharged.  
48.	In this case, the facts, as found by the judge at paragraphs 5 and 6 of his judgment, were that a course of dealing was established between the parties outside the conventional banking relationship of banker and customer.  The course of dealing began in about December 2002 when the two men were at Les Ambassadeurs Club, the claimant having, at the defendant’s request, brought a bankers draft there.  When he had lost that money at the tables, the defendant asked the claimant to lend him more and the claimant agreed, using his debit card to obtain £3,000 worth of chips for the defendant.  Thereafter, the practice consisted of the claimant “personally lending money to the defendant for gambling at his request when he needed it, typically out of banking hours, and at short notice” (paragraph 6).  
49.	The judge concluded, at paragraph 50: 
“I am satisfied that in order to obtain chips for the Defendant, the Claimant used a variety of methods. Sometimes cash would be brought to the cashier at Les Ambassadeurs Club. Sometimes, bankers' drafts drawn on the Claimant's account with Abbey National would be handed over to the cashier in return for chips. Sometimes he would use his debit card in respect of his accounts at Abbey National and Barclays Bank to obtain cash or chips for the Defendant.”
50.	The issue was whether the sums of money were paid “in respect of” a gaming transaction and, as construed by Denning LJ, a finding that it was would require a “stipulation” that the money was to be used for gaming.  
51.	The judge stated that he had not found the issue easy to resolve.  Having assessed each of the parties, who had given evidence over a period of days, he concluded, on balance, that there was no such stipulation.  
52.	I am comfortable with the judge’s conclusion for which he gave cogent reasons.  This was essentially a matter for the judge.  The circumstances in some respects undoubtedly pointed towards a loan in respect of a gaming contract.  On occasions, the claimant actually purchased chips at the club and handed them to the defendant.  Such conduct can be construed as a payment “in respect of” gaming and with a stipulation that the money (converted into chips by the payer himself) was to be used for gaming.  
53.	I do not agree that the possibility that, if the payee wins at odds of 36 to 1 first time and wisely proceeds to cash the balance of his chips, it necessarily follows that the payment, when made, was made without a stipulation that it was to be used for gaming.  The requirement for a stipulation is not inconsistent with subsequent withdrawal from gaming in such a happy situation.  Other such situations could arise.  MacDonald was concerned with a past gaming debt, a clear-cut situation.  Bearing in mind the words of the statute, I do not consider that Denning LJ intended so strict a view of what the stipulation would require when the context is prospective gaming.  
54.	It depends on the circumstances and the judge, having assessed the relationship of the parties and their evidence, was entitled to conclude in this case that there was no stipulation.  I see no basis for reversing his decision.