QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
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Mark Goodram (1) Jon-Ross Watson (2) |
Claimants |
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- and - |
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Camelot UK Lotteries Limited |
Defendant |
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Philip Hinks (instructed by Camelot UK Lotteries Limited Legal Services) for the Defendant
Hearing date: 20 July 2020
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Crown Copyright ©
Senior Master Fontaine :
i) Philip David Neville dated 14 April 2020 ("Neville 1");ii) Stephen Long dated 14 April 2020 ("Long 1");
iii) Sarah Webb dated 14 April 2020 ("Webb 1");
iv) Philip David Neville dated 30 June 2020 ("Neville 2");
v) Philip David Neville dated 16 July 2020 ("Neville 3").
i) Mark Goodram dated 21 June 2020 ("Goodram 1");ii) Marcus Kain dated 29 June 2020 ("Kain 1");
iii) Chloe Dobbs dated 10 July 2020 ("Dobbs 1").
The Claim
The Factual Background
"2. On the 22.04.2020 [sic] Jon-Ross Watson ("JRW") gave me £25 towards the purchase of 5 scratch cards at £10 each; it being agreed with JRW and myself that we would buy 5 scratch cards together and share jointly any winnings; I agreed with JRW that I would purchase the 5 tickets using the card details that someone I met at a Soho brothel gave me when I came to his rescue, since he was trying to pay his bill with a card and that particular establishment only took cash. I paid cash to cover his bill and he gave me the card details in return, thanking me for coming to his rescue and saying to me that I should use the card details to reimburse myself what I had given him in cash to pay his bill at the Soho brothel; I accept that this is a little bit out of the ordinary but this is what happened.
3. On the 22.04.19 in line with the authorisation I had received from the man the Soho brothel to use his card up to the value of (if I recall correctly) hundred pounds (though it might have been £80, though I can't recall exactly now with all that has happened which one of those sums it was) I jointly purchased (jointly with JRW) 5 scratch cards from Waitrose in Clapham High Street. Out of those 5 scratch cards 2 of them won, the first won £10 and the other winning scratch card won £4m.
..
10. I am asked by my lawyer why I overrode the Chip and Pin device at Waitrose so that the transaction was a "cardholder not present" transaction; the answer to this is that after I left the brothel I tried to use the card details at a few local shops, however each of the shops said the cardholder would need to be present (I did not appreciate when the man in the brothel gave me his card details to use to recover my monies from helping him out that I would have this difficulty as I do not have a bank account do not properly understand how they work), it was only when I was in Clapham and told my mate of the situation that he said you can just key into the pad cardholder not present in the keypad and then punch in the details. I fully accept that I knew it was likely that Waitrose would also require the cardholder to be present (from what I was told the earlier shops), and thinking that I had been done over by the guy in the brothel who gave me his card details knowing that I would not be able to use them, I decided that I would try and secretly key in the card details as a 'cardholder not present' transaction so as to get my money back from the cardholder. I appreciate that this looks bad but I can only reiterate that I have the cardholder's full authorisation to use the card details for the purchase."
"6. I explained my role at Camelot and asked him to confirm how he purchased the winning scratchcard. He told me he used the debit card friend who owed him some money. I asked Mr Goodram if he was still in possession of the debit card, and he told me he had since given it back to his friend, who he named as "John" (without providing any surname). I asked if I could speak with "John", and Mr Goodram told me that he had since returned to Bolton. I asked Mr Goodram if he could provide me with any contact details for "John", or his surname. However, he told me he did not know where he lived, and had no other details or information about him……..."
"8. The footage shows two men (namely Mr Goodram and the Second Claimant, John Ross Watson) entering the store, one of whom appears to distract the cashier whilst the other inserts a bankcard into the chip and PIN reader. After a few minutes, the cashier appears to ask one of the men to key a number into the reader; however, he later signs a sales receipt before quickly showing a bankcard to her." [5/3]
That account of the CCTV footage has not been disputed by the Claimants.
"Reference is made to the above transaction. Unfortunately the card issuer has rejected this transaction, as the card details were key entered. They claim that their cardholder did not authorise or participate in the transaction."
"Please find attached a cheque on behalf of my client, which is offered on a 'without admission' and strictly without prejudice basis." [14/5]
The Legal Bases for the Claim and the Defence
"It is an express and or in the alternative an implied term of the contract between the Purchaser of a Camelot sold Scratchcard and Camelot that in the event that the purchaser becomes a Prizewinner, Camelot will pay out to the Prizewinner the sums Scratchcard specifies as the prize." [17/6]
"The Claimants have, on a no admission basis and without prejudice to the Claimant's [sic] primary position, sent to the Defendant a cheque dated 19.07.2019 for the sum of £50 to make good any, if any, issues in respect of the purchase price of the five Scratchcards." [17/8]
"Any person who obtains a Scratchcard or submits a Scratchcard for validation or who claims a Prize in whatever capacity, agrees to be bound by the provisions of any applicable legislation, these Rules, the relevant Game Procedures and any Game Specific Rules that apply, and any information on the relevant Scratchcard, (all as amended from time to time) and any other rules or procedures Camelot may issue in respect of that Game."
Discussion
i) The applicable terms of the Contract between the Claimants and Camelot;ii) Whether Camelot's decision to reject the Claimants' claim to the prize and rescind the contract with the Claimants with regard to the Scratchcard was reasonable;
iii) Whether Camelot is estopped from rejecting the Claimants' claim to the £4m prize by reason of its payment out of £10 by the retailer for the other winning scratch card;
iv) The effect of the payment of £50 by the Claimants' Legal Advisors for the scratchcards in July 2019.
(i) The Applicable Terms of the Contract between the Claimants and Camelot
i) there is no identification of which terms of which licence issued to Camelot are said to be incorporated;ii) there is no express term identified in the Particulars of Claim or the evidence;
iii) there is no basis stated in the Particulars of Claim or the evidence for the implication of such a term.
Incorporation of the Rules into the Contract
"In this day and age when standard terms are frequently to be found on websites I consider that reference to the website is a sufficient incorporation of the warehousing terms to be found on the website."
"55. The party's standard terms could be incorporated into a contract in two principal ways other than where they are expressly agreed to for example by being signed:
(1) they may be on or referred to in a document which is "contractual" that is to say, provided to the other party prior to at the time when the contract is made…; or
(2) …….. [not relevant]
56. But either way, where such terms have not actually been read by the other party or where that party was not aware of their import or effect, the basic principles governing their incorporation are as set out in Chitty Vol. 1 at 12 – 13:
(1) If the person receiving the document did not know there was writing or printing on it, he is not bound;
(2) If he knew that the writing or printing on it contained or referred to conditions, he is bound;
(3) (If the answer to question 1 is Yes but the answer to question 2 is No) that party will be bound by the conditions if the tendering party did what was reasonably sufficient to give the other party notice of the conditions. Note that if this requirement is satisfied it matters not that the party in question was (still) not subjectively aware of them. In the normal course the fact that the document contains terms on its face or clearly refers to them as being on the reverse or being available elsewhere, is likely to be sufficient."
"Camelot's decision about whether or not a Scratchcard is a Winning Scratchcard (or in relation to any other matter or dispute that arises out of the payment or non-payment of Prizes) will be final and binding, provided it is a reasonable decision."
Whether there is an express or implied term of the contract as alleged in Paragraph 19 of the Particulars of Claim
"It is an express and or in the alternative an implied term of the contract between the Purchaser of a Camelot sold scratchcard and Camelot, that in the event that the Purchaser becomes a Prizewinner, Camelot will pay out to the Prizewinner the sum scratchcard specifies as the prize."
i) the alleged implied term would require Camelot to pay a prize to any purchaser of a winning scratchcard even if the scratchcard was purchased using a stolen bank card, or it was purchased by a player who is prohibited to play, e.g. a Camelot employee. It would entirely contradict the contractual discretion that is afforded to Camelot under the Rules to reject a prize claim in specified circumstances. The implication of the alleged term would therefore offend what was expressed by Lord Neuberger in the leading case on implied terms, Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742 at [28], to be the "cardinal rule that no term can be implied into a contract if it contradicts an express term."ii) The implication of the alleged term is precluded by the entire agreement clause in Rule 13.3 which states that the Rules "set out the full extent of Camelot's obligations and liabilities to You in relation to the Games and for the contract between Camelot and You for each Game."
Whether Clause 12.1 of the Rules is unduly onerous
"Camelot's decision about whether or not a Scratchcard Is a Winning Scratchcard (or in relation to any other matter or dispute that arises out of the payment or non-payment of Prizes) will be final and binding, provided that it is a reasonable decision (and subject to Rule 12.4). Without limiting the effect of the previous sentence, following any such decision made by Camelot, Camelot may (at its discretion) reimburse the cost of the Scratchcard or replace the disputed Scratchcard with a Scratchcard for any current Game of the same price."
Rule 12.2 states:
"The remedy in Rule 12.1 will be the Player's sole and exclusive remedy, and any reimbursement or replacement will fully discharge Camelot from any liability in respect of such a dispute ……."
(ii) Whether Camelot's decision to reject the Claimants' claim to the prize was reasonable
i) Camelot acted unreasonably in making a decision when it did not have all the necessary material before to make an informed decision; andii) the decision not to pay was itself unreasonable.
i) Camelot should have waited until the police investigation was concluded before making a decision;ii) Claire Swindell of Camelot advised the Prize Claim Panel that without further clarification as to the facts the Panel was unable to make a final decision, but nevertheless it went ahead and made that decision in the same meeting (Minutes of Prize Claim Panel dated 10 May 2019) [10/14];
iii) the decision not to pay was based on incorrect information that the purchase of the Scratchcard was made with a stolen debit card (Minutes of Prize Claim Panel dated 10 May 2019) [10/13], whereas it had never been asserted by the Bank the debit card been stolen;
iv) Camelot have relied on clause 7.1 (b) in stating that the claim was not made in good faith, which can only be a reference to events following the purchase e.g. the bank confirming that the use of the debit card was not authorised, rather than to events at the time when the claim was made;
i) it is not disputed that the Claimants had a winning £4m scratchcard, nor that the Claimants were the holders of the winning ticket;ii) the cardholder did not report the transaction as fraudulent, but only stated that it was not authorised in response to being contacted by Nat West Bank who had been asked by Camelot to contact the cardholder (email from Sarah Webb) [8/3];
iii) the transaction was only marked as fraudulent when NatWest contacted the cardholder, so that assertion of fraud was reactive and not proactive;
iv) Mr Goodram has been consistent throughout that the card used belonged to a friend who owed him money.
"It is important to keep in mind to considerations which inform the answer to this question. The first is the scope of the limitation imposed on [the defendant] by the implied term. The court is not concerned to apply its own views of what would or would not have been reasonable. Reasonableness the current context is not an objective standard to be applied by the court, but a criterion applied to the decision-making process of the decision-maker. Apart from challenges to the procedural manner in which the decision comes to be made, or challenges to the relevance or irrelevance of considerations which were or were not taken into account,… The test focuses on the outcome of the process; and in order for there to be a breach of the term, the decision-maker must have reached a decision which is so outside the range which any decision-maker could reasonably have reached that it is properly categorised as irrational or perverse….It is a high threshold, as the public law cases make clear"
i) the purchase of the Scratch Card had been made using a debit card although neither of the Claimants had a UK bank account:ii) the Scratch Card was purchased using a bank card that belonged to someone other than the Claimants;
iii) the Claimants were unable to provide Camelot with the identity or whereabouts of the owner of the debit card used;
iv) Waitrose had confirmed in writing to Camelot that the Bank had advised that the purchase of the Scratch Card had been made without the authority or consent of the cardholder;
v) the CCTV evidence received from Waitrose showed the Claimants distracting Waitrose staff whilst tampering with the chip and pin machine prior to making the purchase;
vi) the purchase have been made using a signature marked with "MG" rather than via chip and pin;
vii) the debit card holder was unaware that their card had been used in the purchase;
viii) purchase of the Scratch Card was not signed for by the holder of the debit card or by any authorised signatory for the bank account in question;
ix) the Claimants' account as to how and why authority to use the cardholder's bank details was given to them was not reasonably credible, namely that a complete stranger who owed them money, would write his bank details on a piece of paper as a way of enabling them to recover the money owed;
x) on 26 April 2019 Ms Webb of Waitrose's Profits Protection Department had been informed by a representative of the Fraud Notification Team of NatWest that contact had been made with the account holder of the debit card who had confirmed that the transaction was fraudulent (Webb 1 para 9) [7/3];
xi) the Panel assumed from the circumstances described above that the Scratch Card was purchased with a stolen debit card;
xii) the facts surrounding the purchase of the Scratch Card raised suspicions of fraud which it agreed must be reported to the police.
i) the prize claim has not been successfully validated in line with Camelot's reasonable validation procedures (rule 6.1) [4/9] including where the claim fails to pass Camelot's validation and security tests (rule 6.2 (c));ii) Camelot is not entirely satisfied that the prize claim has been made in good faith (rule 7.1 (b)) [4/10]; or
iii) Camelot believes, on reasonable grounds, that the scratch card holder is not lawfully entitled to claim the prize, or where there is any other reason for Camelot (acting reasonably) to question the scratch card holder's entitlement to the prize (rule 7.1 (c)) [4/9].
(iii)Whether Camelot is estopped from rejecting the Claimants' claim to the £4 million prize by reason of the payment of the £10 prize.
(iv)The effect of the payment of £50 by the Claimants' Legal Advisors for the scratchcards in July 2020
"5. Camelot in banking the Cheque has waived any issue(s) arising from either the initial purchase of the five scratchcards and or the winning scratchcards subsequent presentation to Camelot for payment; in banking the Cheque Camelot are irrevocably bound in contract with my clients and must now honour the winning £4m ticket; put another way, the banking of the Cheque is wholly inconsistent with Camelot claiming that the contract is either void or voidable; see Pellant v Boosey (1862) 31 LJCP 281.
6. In the circumstances Camelot's position is as a matter of law untenable; Camelot have been paid for the winning scratchcards, Camelot do not dispute that my clients have a winning 4 million scratchcard, as a matter of law Camelot now have no defence for not paying out my clients."[24/1-2]
i) there is no basis pleaded in the Particulars of Claim to support a submission that the cashing of the £50 cheque meant that Camelot was unable to rely on the terms of the contract between it and the Claimants;ii) there was no reference in the letter enclosing the cheque to it being intended as payment for the five scratchcards purchased by the Claimants on 22 April 2019;
the arguments advanced as summarised above have no real prospect of success for the following reasons.
i) made and communicated their decision to reject the Claimants' claim to the £4 million prize. They were entitled to make that decision under rule 12.1 of the terms of the contract, provided it was a reasonable decision.ii) given notice to the Claimants to rescind any effective transaction that was entered into to purchase the Scratch Card.
Accordingly the cashing of the cheque had no bearing on the decision that was made by Camelot and communicated to the Claimants on 20 May 2019.
Any other compelling reason why the claim should be disposed of at trial
i) to allow the Claimants the opportunity to obtain details of the cardholder and obtain evidence from him to support the circumstances of Mr Goodram obtaining the details of the cardholder's debit card, and the alleged agreement of the cardholder for him to use those details to reimburse himself for the payment made on behalf of the cardholder;ii) it is inappropriate for a claim involving allegations of fraud to be determined without hearing oral evidence, particularly in circumstances where the criminal trial may demonstrate that the Claimants are not guilty of fraud.
Costs of the Application and the Proceedings
"The Court shall consider in all cases where fixed costs do not arise whether to make a summary assessment. It should do so at the conclusion of a hearing which has lasted not more than one day, in which case the assessment will deal with the costs of the application. If the hearing disposes of the whole claim the Court may make an assessment of the costs of the whole claim."
"When the court should consider whether to make a summary assessment
Whenever the court makes an order about costs which does not provide only for fixed costs to be paid the court should consider whether to make a summary assessment of costs."
The costs of the application
The costs of the proceedings
Discussion
"The court will have regard to all the circumstances deciding whether costs were –
(a) if it is assessing costs on the standard basis –
(i) proportionally and reasonably incurred; or
(ii) proportionate and reasonable in amount,"
- the conduct of the parties
- the amount or value of any money or property involved;
- the importance of the matter to all the parties;
- the particular complexity of the matter of difficulty or novelty of the questions raised;
- the time spent on the case;
- the place where the circumstances in which work or any part of it was done;
- the receiving party's last approved or agreed budget.
"Costs will be proportionate if they bear a reasonable relationship to: (a) the sums in issuing proceedings; (b) the value of any known monetary relief in issuing the proceedings; (c) the complexity of the litigation; (d) any additional work generated by the conduct of the paying party and; (e) any wider factors involved in the proceedings, such as reputational public importance. "
Note 1 Associated Provincial Picture Houses Ltd v Wednesbury Corp. [1948] 1KB 223 at 233-234 [Back]