This is an extract of our Lipkin Gorman V. Karpnale I document, which we sell as part of our Restitution of Unjust Enrichment BCL Notes collection written by the top tier of Oxford students.
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LIPKIN GORMAN V. KARPNALE FACTS Cass was a partner in the appellant firm of solicitors, Lipkin Gorman. 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. 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. The club was enriched as and when Cass staked and lost to the club money stolen from the solicitors amounting in the aggregate to PS300,000 or more. But the club paid Cass when he won and in the final reckoning the club only retained PS154,695 which was admittedly derived from the solicitors' money. The solicitors can recover the sum of PS154,695 which was retained by the club if they show that in the circumstances the club was unjustly enriched at the expense of the solicitors. HOLDING Lord Templeman In my opinion in a claim for money had and received by a thief, the plaintiff victim must show that money belonging to him was paid by the thief to the defendant and that the defendant was unjustly enriched and remained unjustly enriched. 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. In the present case Cass stole and the club received PS229,908.48 of the solicitors' money. If the club was in the same position as a
donee, the club nevertheless in good faith allowed Cass to gamble with the solicitors' money and paid his winnings from time to time so that when the solicitors' sought restitution, the club only retained PS154,695 derived from the solicitors. The question is whether the club which was enriched by PS154,695 at the date when the solicitors sought restitution was unjustly enriched. 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. The solicitors claim that the club acquired PS154,695 under void contracts and that as between the club and the solicitors from whom the money was derived, the club is in no better position than an innocent donee from the thief, Cass. If a thief deposits stolen money in a building society, the victim is entitled to recover the money from the building society without producing the pass book issued to the thief. As against the victim, the building society cannot pretend that the building society gave good consideration for the acceptance of the deposit. The building society has been unjustly enriched at the expense of the victim. Of course the building society has a defence if the building society innocently pays out the deposit before the building society realises that the deposit was stolen money. 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..... A gambling loss, whenever paid, is a completed voluntary gift from the loser to the winner. But Cass was gambling with the money of the solicitors who have never gambled and never made a voluntary gift to the club. Cass staked with the club money which he had stolen from the solicitors. The solicitors have been content to assume that in addition Cass staked PS20,050 of his own money. Cass also staked money which from time to time he won from the club during the course of his doomed gambling. At the date when the solicitors claimed restitution the club had recovered all its own money and were left with PS174,745 net winnings. The club is entitled to assert and the solicitors cannot disprove that PS20,050 of the net winnings was money which had belonged to Cass. There remained PS154,695 which must have been money stolen from the solicitors. 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
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