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LIPKIN GORMAN V. KARPNALE
FACTS Cass was a partner in the appellant firm of solicitors, Lipkin Gorman ("the solicitors"). Cass withdrew PS323,222.14 from the solicitors' bank account. The sum of PS100,313.16 was replaced, recovered or accounted for, but the balance of PS222,908.48 was money which Cass stole from the solicitors and proved to be irrecoverable from him. Cass staked PS561,014.06 at the gaming tables of the Playboy Club, a licensed casino owned and operated by the respondent, Karpnale Ltd. ("the club"). Cass won
PS378,294.06. After making adjustments for certain cheques, the club agreed that the club won and Cass lost overall, in a matter of months, the sum of PS174,745. The parties also agreed that the maximum gross personal resources of Cass amounted to PS20,050 and that at least the sum of PS154,695 won by the club and lost by Cass was derived from money stolen from the solicitors. The club acted innocently throughout and was not aware that the club had received PS154,695 derived from the solicitors until the solicitors claimed restitution. HOLDING LORD TEMPLEMAN Explanation for why a bona fide purchaser for value does not enrich An innocent recipient of stolen money may not be enriched at all; if Cass had paid PS20,000 derived from the solicitors to a car dealer for a motor car priced at PS20,000, the car dealer would not have been enriched. The car dealer would have received PS20,000 for a car worth PS20,000. But an innocent recipient of stolen money will be enriched if the recipient has not given full consideration. If Cass had given PS20,000 of the solicitors' money to a friend as a gift, the friend would have been enriched and unjustly enriched because a donee of stolen money cannot in good conscience rely on the bounty of the thief to deny restitution to the victim of the theft. Did the Club pay consideration?
The club claims that the club gave consideration for the sum of
PS154,695 by allowing Cass to gamble and agreeing to pay his winnings and therefore the club was not enriched or, alternatively, was not unjustly enriched. Argument: The club argues that when Cass paid, for example,
PS5,000 in cash to the cashier or to the croupier, there came into existence a contract which was not a gaming contract. In
consideration for PS5,000 paid by Cass, the club agreed to cash any chips retained, won or otherwise acquired and at any time presented for payment. This was a contract, so it was said, in contemplation of gaming and not a contract by way of gaming. If Cass staked a chip and the croupier accepted the stake and played the game, there came into existence a second contract. Rejected: But in the present case the club retained some of the stolen money. The club cannot as against the solicitors retain the stolen money save by relying on the gaming contracts which, as between the club and Cass, entitled the club to retain the solicitors' money which Cass lost at the gaming table. Those gaming contracts were void. The club remains unjustly enriched to the extent of PS154,695. Another way of analysing the situation is this. When Cass entered the club as a member, the club made to him a revocable offer to gamble with him in the manner and upon the terms dictated by the club. Those terms required Cass to pay his gambling stakes in advance and to allow the club to pay their gambling losses in arrears. The revocable offer by the club was accepted by Cass when he staked a chip and became irrevocable when the croupier accepted the chip as a stake. There was only one contract and that was a gaming contract. Conclusion My conclusion is that the club has no right to retain stolen money received by the club from the thief. Repayment by the club to the victim, limited to the net amount of stolen money which the club retains, will not inflict a net loss on the club as a result of the transactions between the club and the thief. In the present case money stolen from the solicitors by Cass has been paid to and is now retained by the club and ought to be repaid to the solicitors. What is the Unjust Factor? The fact that money was stolen?
When Cass lost and paid PS154,695 to the club as a result of gaming contracts, he made to the club a completed gift of PS154,695. The club received stolen money by way of gift from the thief; the club, being a volunteer, has been unjustly enriched at the expense of the solicitors from whom the money had been stolen and the club must reimburse the solicitors. LORD GOFF Whether the solicitors had legal title to the money is decisive The first ground is concerned with the solicitors' title to the money received by Cass (through Chapman) from the bank. It is to be observed that the present action, like the action in Clarke v. Shee
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