This case concerns a professional gambler, Mr Ivey, who employed the ‘edge-sorting’ technique in order to win a total of £7.7m playing Punto Banco Baccarat. The casino declined to pay him and argued that ‘edge-sorting’ amounted to cheating. His case was that it was not cheating but the deployment of a legitimate advantage. In the lower court the Judge found that he genuinely held this belief.
The Supreme Court reviewed the submissions made on behalf of Mr Ivey and concluded that cheating need not necessarily contain an element of dishonesty. Dishonesty itself, as an element of a criminal charge, is not defined. In this way, dishonesty does not assist in clarifying the definition of cheating.
The Court then turned to the two stage test for dishonesty, as set out in R v Ghosh  QB 1053. That case established that the jury must ask itself whether the conduct is dishonest by the objective standards of ordinary reasonable and honest people. If they find in the affirmative, the jury must then ask whether the defendant must have realised this to be the case. If so, he should be convicted. The Supreme Court then went on to outline six unintended consequences of the Ghosh test with particular focus on the difficulties created by the second limb. This included the result that the more deviant the defendant’s morals are, the more likely that the application of Ghosh would see him acquitted.
The civil test as to dishonesty was established in Barlow Clowes International Ltd v Eurotrust International Ltd  UKPC 37 and the Supreme Court found no reason for the definitions to differ between civil and criminal cases.
The Supreme Court then reviewed the case law preceding Ghosh and found that only one case remotely raised the relevance of the defendant’s own view of the honesty of what he had done. The Supreme Court held that second limb of the Ghosh test did not therefore correctly represent the law and should no longer be given as a direction. The test for dishonesty should be an objective one, as set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan  2 AC 378 and by Lord Hoffman in Barlow Clowes. The latter test is as follows:
‘Although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective. If by ordinary standards a defendant’s mental state would be characterised as dishonest, it is irrelevant that the defendant judges by different standards’.
The jury should therefore first ascertain, subjectively, the actual state of the individual’s knowledge or belief as to the facts. Once this is established, the jury should apply the objective standards of ordinary decent people in order to determine whether the conduct was dishonest.