Case Summary: Kitover v Galmarley Ltd (t/a Bullionvault.com)

Articles

07/04/2021

Maurice Rifat successfully recovers gold on behalf of a Claimant who had used a forged passport and a false identity to set up the account under which it was held.

In Kitover v Galmarley Ltd (t/a Bullionvault.com) [2021] EWHC 809 (Ch), the case originally started life as a stakeholder claim under CPR 86 brought by Bullionvault, who had discovered that they held an account comprising of almost 4kg of gold in favour of someone who had opened it with a forged passport and a false name.  The Claimant, a US citizen, had presented himself to them as the true account holder, having admitted to opening the account in a false name to avoid anticipated bullion controls that were being threatened in the US in around 2007.

Understandably, Bullionvault were concerned that the Claimant was an imposter and was attempting to unlawfully claim gold of a substantial value.  The Court directed that the stakeholder claim proceed as a claim brought by the Claimant to be heard as a trial in order for him to prove that he was the true account holder.

Alongside the more prosaic arguments in relation to the documentary and other evidence adduced by the Claimant in support of his claim, there was also the issue of whether the doctrine of “illegality” could operate to prevent recovery.

It was argued by Bullionvault.com that the policy against the use of forged instruments to open accounts and possible money laundering, would be enhanced by the Claimant not recovering the gold.  The Court accepted the submission that quite the opposite would be the case.  The only ‘enhancement’ by refusing recovery, would be in the form of either punishment or prevention and these are not objectives to be fulfilled by the Civil Courts.  Both the UK and the US have ample facility in the form of financial regulators and the police to deal with forgery and money laundering.

The Court found that on balance the Claimant was entitled to recover his gold and his claim was not prevented by illegality.  Despite his success he was held liable for the costs of Bullionvault.com for bringing the stakeholder claim, which of course they were obliged to do so by the Claimant having used a fake identity in the first place. His pot of gold at the end of the rainbow was reduced accordingly.

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