The Court of Appeal, composed of Chief Justice Silvio Camilleri, Mr Justice Tonio Mallia and Mr Justice Joseph Azzopardi, in the case ‘Maria Mifsud and others v Dragonara Casino Ltd’ (today Stakes Holding Ltd), held, among other things, that a debt from a lottery was legally enforceable.

The facts in this case were as follows.

On July 28, 2005, Maria Mifsud participated in the anniversary lottery at the Dragonara Casino. The first prize was a Smart car, the second prize a BBQ set and the third prize an outdoor wooden table and four chairs. One condition of the lottery was that the winner had to be present to claim the prize.

It resulted that when the lottery was drawn, the winner, Nanette Carbone, did not come forward to claim her prize. In fact, it was decided to draw another ticket and Mifsud was declared the winner of the Smart car. Shortly after, Carbone appeared for her prize and a decision was taken to award the first prize to her. Mifsud protested.

Faced with this situation, she proceeded to file legal proceedings against Dragonara Casino Ltd, now called Stakes Holding Ltd, requesting the court to declare that she had won the first prize (a Smart car) in the anniversary lottery, and to order the Dragonara Casino to deliver the Smart car within a short time limit.

Dragonara Casino submitted that Mifsud’s claims were unfounded as the lottery had been won by Antonia sive Carbone, whose name had been drawn before Mifsud’s. They said that Carbone had been first to claim the prize, and that the first prize had been given to her in the evening when the lottery was drawn.

Dragonara Casino maintained that they had followed the directions granted by the director of Public Lotto which regulated, supervised and controlled the lottery and the distribution of the prizes. The lottery had been drawn and the first prize had been confirmed according to the terms and conditions of the permit to have the lottery.

On September 24, 2010, the First Hall of the Civil Court upheld Mifsud’s requests. The lottery was organised by the Dragonara Casino and authorised by the Public Lotto Department. The conditions issued by the department included to give a free lottery ticket to every customer during the period from May 1, 2005 to July 28, 2005, to award a Smart car (valued at €13,860) as first prize, and that the winner had to be present to claim the prize.

Carbone told the court that owing to the considerable number of people at the casino, she had been prevented from coming forward to claim her prize.

The first court did not find her version to be very credible. It was likely that she was not present at the time of the draw. Nor was it an excuse that the Dragonara Casino had followed the directions of the Public Lotto Department. The function of the Public Lotto was to supervise and not to manage the lottery.

Article 1713 of the Civil Code provides:

“(1) The law grants no action for a gaming debt, or for the payment of a bet;

(2) Nor does it grant any action

(a) for the recovery of any sum lent by any person who knew that such sum was intended for gaming;

(b) for the recovery of any sum lent by any person interested in the game, for the payment of money lost at such game.”

These provisions were of public order and could not be derogated. The court had to apply them ex officio. The fact that the lottery was authorised under the Public Lotto Ordinance did not change its legal status: re (CA) ‘Dr Joseph Cassar noe v Joseph Grech Marguerat (Vol. LI I 416)’ dated June 23,1967. The authorisation of the department of lotteries did not derogate from article 1713 et seq of the Civil Code, and insofar as it was not expressly derogated by law, the debt from gaming was not legally enforceable unless for dolo or fraud. Debts from gaming only gave rise to moral obligations. Re: (PA) ‘Salvatore Grech v Carmelo sive Charles Bennetti (Vol. XLV-11-553)’ dated January 27, 1961.

Article 49 (3) of Chapter 438 provides:

“(3) The provisions of article 1713 of the Civil Code shall not prejudice

(a) the right of a licensee, operator, permit holder or person referred to in sub-article (1) to recover a debt arising from the acceptance of payment of a stake by any of the means of payment referred to in sub-article (1)(a) in accordance with the provisions of the said sub-article (1)(a); or

(b) the right of a winner of a monetary prize under an authorised game or, as the case may be, under a game operated in terms of a permit granted under regulations made under article 78(3), to recover any debt arising from acceptance of payment of such prize by any of the means of payment referred to in sub-article (1)(b).”

Dragonara Casino entered an appeal, calling for its revocation, raising two grievances. It said the gaming debt was not enforceable under article 1713 of the Civil Code.

It was evident that Carbone had not immediately claimed her prize when called

The court felt that in this case article 49 (3) of Chapter 438 applied and not article 1713 of the Civil Code. It said that the test under chapter 438 included prizes having monetary value. It was not the intention of the law to limit it to money prizes. In fact article 2 defined gaming as “gaming for money or prizes with monetary value”.

The court noted further that the relations between the parties did not arise from a debt from gambling or from a bet but from a lottery, and in this respect article 1713 of the Civil Code did not apply, pointed out the court.

Dragonara Casino also claimed wrong appreciation of the facts by the First Hall of the Civil Court.

It was stated that Carbone had won the first prize and that she was still in the building of the casino but was prevented from collecting her prize, in view of the great number of people. The Court of Appeal maintained that it should not disturb the assessment of facts by the first court, save for grave reasons. Re: ‘Phylis Ebejer v Joseph Aquilina’ dated January 10, 1995; and ‘Joseph Cini v George Vella’ dated November 15, 2004.

The Court of Appeal found the assessment of the first court to be correct and fair. It was evident that Carbone had not immediately claimed her prize when called. The first court did not find it credible that she was present in the building at the time. It was more likely that she had left and popped in again after her ticket was drawn.

The court agreed with the first court that the function of the official of the Public Lotto was to supervise the lottery and not to hold or draw the lottery. The court said that the Dragonara Casino had not justified why it did not give the prize to Mifsud (or her heirs), in particular as she had already been declared the winner of the lottery by the time Carbone appeared.

For these reasons, on March 28, 2014, the Court of Appeal gave judgment by dismissing the casino’s appeal and confirming the decision of the First Hall of the Civil Court.

Dr Karl Grech Orr is a partner at Ganado Advocates.