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LIPKIN GORMAN V. KARPNALE FACTS The appellants, Lipkin Gorman ('the solicitors'), are a firm of solicitors. Norman Barry Cass was a partner in the firm from 1978 to 1980. He had the authority of his partners to draw upon the solicitors' client account, on his signature alone. Cass proved to be a compulsive gambler. He gambled regularly at the casino at the Playboy Club ('the club') which was owned by the respondents, though he also gambled elsewhere. Such was his addiction to gambling that he found his own resources insufficient; and so he helped himself to money in the client account. Without his partners' knowledge, between March and November 1980 he misappropriated large sums of money from the client account. At the club, Cass would present cash either at the cash desk or at the gaming tables. At the cash desk, he would be given a so-called 'cheque credit slip' in exchange for cash: he would then exchange the slip for plastic chips of various denominations. If he presented cash at a gaming table, he would be given chips in exchange for the cash. These chips at all times remained the property of the club. Bets were normally made by putting down chips at the gaming table, but cash could be put down at the gaming table and if so would be accepted for bets, without any chips being used. Chips could also be accepted in lieu of cash for refreshments at the club; but their actual use for this purpose at the club appears to have been very rare, and there was no evidence that Cass ever used them for that purpose. Any unused chips, together with chips representing sums won in gaming, could be exchanged either for cash or a 'winnings cheque' drawn on the club's bank. Solicitors claim: The solicitors commenced proceedings against both the respondents and the bank. Their claim against the respondents was for the recovery, on various grounds, of the money taken by Cass from the current account and gambled away at the club. The club's argument was that to the extent that they had paid out the winning bets by Cass they have in good faith changed their position and therefore that the claim must be discounted to that extent. HOLDING LORD GOFF Whether change of position is, or should be, recognised as a defence to claims in restitution is a subject which has been much debated in the books. It is however a matter on which there is a remarkable unanimity of view, the consensus being to the effect
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